Which component of the OPPS assigns payment rates based on procedure grouping?

Under the Medicare Outpatient Prospective Payment System (OPPS), hospital outpatient services are paid based on Ambulatory Payment Classifications (APCs). APCs are the mechanism that groups clinically similar services and procedures—typically identified through CPT/HCPCS reporting—into payment categories with established relative resource costs. CPT codes identify what service was performed, but CPT itself is not the OPPS payment grouping methodology; OPPS takes the coded line items and maps many of them into APC groupings (with packaging rules, status indicators, and modifier impacts) to determine the payment rate. DRGs are used for inpatient prospective payment and do not apply to OPPS outpatient claims in the same way. The Physician Fee Schedule applies to professional services (physician/clinician billing) rather than the hospital facility component paid under OPPS. From an outpatient CDI lens, accurate, specific documentation supports correct CPT/HCPCS selection, modifier use, units, and medical necessity linkages—ensuring services map to the correct APC and are not inappropriately bundled, denied, or downcoded during review. This protects payment accuracy and compliance by aligning the clinical story with the reported outpatient services.