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The video tutorial discusses the Ambulatory Payment Classification system used by Medicare for outpatient facility reimbursement. APCs are part of the outpatient prospective payment system and reimburse hospitals for ambulatory facility charges, including infrastructure, tools, drugs, and more. Medicare uses a prospective payment system to dictate prices and package most components of a service together for one lump sum payment. This system is similar to MS-DRGs for inpatient services, but for outpatient facilities.