What best differentiates DRGs from APCs?

• A. APC is inpatient prospective payment.
• B. DRG is outpatient prospective payment.
• C. DRG is inpatient prospective payment; APC is outpatient prospective payment; both determine payment class.
• D. DRG and APC are for pharmacy billing.

Answer: (C)

The main idea is the setting and how payment is determined. DRGs apply to inpatient hospital stays and group a patient’s entire admission into a diagnosis-based category that sets a single payment for the whole stay. APCs apply to outpatient encounters and group individual services and procedures performed during outpatient visits to establish payments for those services. Both systems are prospective payment classifications, meaning reimbursement is fixed in advance based on the assigned group rather than on charges. Pharmacy billing isn’t what these classifications govern.