In response to rapidly growing Medicare expenditures for outpatient services and large co-payments being made by Medicare beneficiaries, Congress mandated that the Centers for Medicare and Medicaid Services (CMS) develop a Hospital Outpatient Prospective Payment System (HOPPS) and reduce beneficiary co-payments. This payment system, implemented August 1, 2000, is used by CMS to reimburse for hospital outpatient services.

Ambulatory Payment Classifications (APCs) are CMS' grouping system developed for facility reimbursement for hospital outpatient services. All covered outpatient services to an APC group. Each group of procedure (i.e., codes) within an APC is supposed to be "similar clinically and with regard to resource consumption." For questions on HOPPS contact