Outpatient Prospective Payment System (OPPS)

The Outpatient Prospective Payment System (OPPS) is Medicare’s payment methodology for reimbursing hospitals and outpatient facilities for services provided to Medicare beneficiaries on an outpatient basis. Under OPPS, Medicare pays hospitals and other providers predetermined rates for covered outpatient services based on the Ambulatory Payment Classification (APC) system, which assigns payment rates to specific procedures and services. These rates are intended to cover the costs associated with delivering outpatient care, including supplies, equipment, and overhead expenses. OPPS promotes transparency and efficiency in healthcare billing by standardizing payment rates for outpatient services, facilitating access to care for Medicare beneficiaries, and promoting cost containment within the Medicare program.