APC Success in Montana

In 2002, Montana Medicaid became one of the first Medicaid programs to decide to implement an outpatient prospective payment system (OPPS) for hospital care, based on Medicare Ambulatory Payment Classification (APC) groups. Montana chose ACS to design the new method and to implement it in the MMIS, because it knew that ACS had intimate familiarity with its claims data and detailed knowledge of program rules and the Montana hospital industry.

The design work was done by a small team that included specialists in payment method development as well as MMIS programmers. When needed, the team drew on the expertise of their ACS colleagues, including a health information administrator, a technical writer, provider relations specialists, and additional MMIS programmers. The same programmers then implemented the new method in the MMIS.

The project successfully met several challenges, including tailoring a Medicare method to the needs of a Medicaid program, constantly shifting Medicare rules, incomplete APC documentation, and creating extensive simulations of impacts on hospitals and the Medicaid budget. APCs were implemented August 1, 2003, on schedule and on budget. State staff praised ACS for one of the smoothest implementations of a major change they had ever seen, and hospitals have welcomed the new method.