Health Care Reimbursement

Resources that explain the various aspects of health care reimbursement and help researchers find sources of information on payment rates

Common Acronyms

Some common acronyms used in health care services reimbursement.

APC (Ambulatory Procedure Classification): OPPS uses this to classify procedures. Each APC incorporates HCPCS codes considered to have similar resource consumption and similar clinical attributes

CPT (Common Procedure Terminology): Similar purpose as HSPCS, but used for billing to other payers besides Medicare (especially commercial insurers).

  • Procedure coding system from AMA, for physicians
  • It's the basis for Medicare's coding system 
  • Commercial insurers may accept/consider CPT codes NOT included in the HCPCS codes; e.g., HCPCS does not include the code for an office visit to follow up on a surgical procedure or hospital stay (99024), but commercial insurers may consider making separate payment for such a visit
  • Relative importance of the distinctions between CPT and HCPCS (and therefore commercial insurance and Medicare) depends on whether the typical patient for a certain kind of procedure is likely to be a Medicare patient (as with prostate surgery) or not (as with a vasectomy or normal delivery).

DRG (Diagnosis-Related Groups or “Diagnostic-Related Groups”): Inpatient payment is based on these

HCPCS (Healthcare Common Procedure Coding System): The officially recognized procedure codes, with the finest level of detail and specificity that is recognized

IRP (inexpensive and routinely purchased): The cost of a piece of durable medical equipment (DME) does not exceed $150

OPPS (Outpatient Prospective Payment System): For hospital outpatient departments

PFS: Medicare’s physician fee schedule

Important Regulatory Agencies

Center for Medicare and Medicaid Services (CMS).  Administers the Medicare program, coordinates with state Medicaid programs, develops regulations for all aspects of Medicare and Medicaid, conducts and reports on research into the cost effectiveness of treatment strategies, determines coverage, sets prices, etc.

Food and Drug Administration (FDA).  Issues approvals, recommendations, research, and other information about which devices, drugs, and foods are safe and effective.  Its rulings and advisory statements typically inform insurance coverage decisions.  NOTE ESPECIALLY THE APPROVALS AND CLEARANCES TAB.

United States Patent and Trademark Office (USPTO).  Publicly accessible database of all patent applications and decisions.  The Johns Hopkins community also has access to two proprietary patent searching databases:

Classification and Coding Systems