--- title: "OPPS, Outpatient Prospective Payment System | MedTech Terms" description: "Medicare's payment system for hospital outpatient services. Plain-English Reimbursement definition for MedTech teams, with examples and related terms." lang: en json-ld: | { "@context": "https://schema.org", "@graph": [ { "@type": "DefinedTerm", "@id": "https://medtechterms.com/terms/opps#term", "name": "Outpatient Prospective Payment System", "alternateName": "OPPS", "description": "OPPS pays hospital outpatient departments via Ambulatory Payment Classifications (APCs) - bundled payment groups for outpatient procedures. 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[Home](/) 2. / 3. [Terms](/terms) 4. / 5. [Reimbursement](/terms?cat=Reimbursement) 6. / 7. Outpatient Prospective Payment System [All terms](/terms) Reimbursement [Hospital Buyer & Reimbursement](/ecosystems/hospital-buyer)OPPS # Outpatient Prospective Payment System Medicare's payment system for hospital outpatient services. Reviewed by [Christian Espinosa, Founder, Blue Goat Cyber](/authors/christian-espinosa) Last reviewed May 5, 2026 ## Definition OPPS pays hospital outpatient departments via Ambulatory Payment Classifications (APCs) - [bundled payment](/terms/bundled-payment) groups for outpatient procedures. ASCs are paid under a parallel ASC payment system tied to OPPS. What the regulation says The Centers for Medicare & Medicaid Services (CMS) administers the Outpatient Prospective Payment System (OPPS), which establishes payment rates for hospital outpatient services and partial hospitalization services in psychiatric hospitals and community mental health centers. The Social Security Act, specifically sections 1833(t) and 1833(a)(2)(E), provides the legal framework for OPPS. CMS updates the OPPS regulations annually, typically through proposed and final rules published in the Federal Register, detailing payment policies and rates. ## What this means in practice Annual OPPS rule sets [APC](/terms/apc) weights, device pass-throughs, and ASC-payable procedure list - a major commercial determinant for outpatient devices. ## Examples - A manufacturer of a novel cardiac diagnostic device for outpatient use ensures the device has sufficient clinical evidence to support a favorable Ambulatory Payment Classification (APC) assignment under OPPS. - A company developing an orthopedic implant specifically for ambulatory surgical centers (ASCs) analyzes the annual OPPS rule to confirm its device is included in procedures payable under the parallel ASC payment system. - A MedTech firm applies for Transitional Pass-Through status for a new surgical instrument, seeking temporary separate payment under OPPS while CMS gathers data for its permanent integration into an Ambulatory Payment Classification (APC). Common pitfalls - • A common pitfall is misunderstanding the impact of APCs on device reimbursement, assuming direct payment for devices rather than bundled payments for procedures. Another mistake is failing to monitor the annual OPPS rule changes, which can significantly affect market access and pricing strategies for outpatient MedTech. Companies sometimes overlook the distinct but parallel payment system for Ambulatory Surgical Centers (ASCs), leading to incomplete reimbursement strategies. - • It is crucial to differentiate between an outpatient service being covered by Medicare and the specific payment methodology under OPPS, as not all covered services are reimbursed via APCs. - • Some MedTech manufacturers incorrectly assume that device pass-through status is permanent, rather than a temporary payment mechanism subject to specific criteria and time limits. - • Misinterpreting the APC assignment for a new device, or assuming a specific APC will apply without understanding the clinical and cost data CMS uses for classification, can lead to inaccurate financial projections. ## Frequently asked questions How do MedTech companies interact with OPPS? MedTech companies primarily interact with OPPS by understanding how their devices are incorporated into Ambulatory Payment Classifications (APCs), monitoring device pass-through opportunities, and assessing the impact of annual rule changes on market access and reimbursement for their outpatient products. What is a 'device pass-through' in OPPS? How does OPPS affect product development? ## Related terms Grouped by theme ### Editor's picks · Hand-selected related concepts [ Reimbursement ASC Site-of-Service Shift Migration of procedures from hospitals to ambulatory surgery centers. ](/terms/asc-shift)[ Reimbursement Transitional Pass-Through Payment(TPT) Supplemental outpatient payment for new device technologies. ](/terms/tpt) ### More in Reimbursement · Same category [ Reimbursement 340B Drug Pricing Program(340B) Federal program providing discounted drugs to safety-net providers. ](/terms/340b)[ Reimbursement Ambulatory Payment Classification(APC) The Medicare grouping system that determines hospital outpatient payment amounts under OPPS, analogous to MS-DRGs for inpatient. ](/terms/apc)[ Reimbursement Budget Impact Model(BIM) Financial model that estimates the total cost consequences of adopting a new technology to a payer's budget over a defined horizon. ](/terms/budget-impact-model)[ Reimbursement Bundled Payment Single payment that covers all services for an episode of care. ](/terms/bundled-payment) Cited by Where this term appears across MedTech Terms. Ecosystems (1) - [Hospital Buyer & Reimbursement](/ecosystems/hospital-buyer) ## Primary references 3 sources Link health: 3 verified · last checked 2026-06-20 CMS· 1 AMA· 1 AdvaMed· 1 1. [1 CMS OPPS Verified CMS · cms.gov ](https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient) 2. [2 AMA CPT Resources Verified AMA · ama-assn.org ](https://www.ama-assn.org/practice-management/cpt) 3. [3 AdvaMed - Payment & Coverage Verified AdvaMed · advamed.org ](https://www.advamed.org/our-work/) Inline markers like \[1\] jump to the matching reference above. Sponsor note ### Need cybersecurity expertise on a connected-device launch? Blue Goat Cyber helps MedTech teams ship connected products that hospital security teams will actually procure. [Book a 30-minute discovery session](https://go.bluegoatcyber.com/meetings/blue-goat-cyber/discovery-session) - No obligation - Expert-led from minute one - NDA available on request MedTech Terms is a community resource sponsored by [Blue Goat Cyber](https://bluegoatcyber.com). Definitions are independent of any vendor. On this term Category Reimbursement Acronym OPPS Sources 3 Updated 5/5/2026 [Compare with another term](/compare?a=opps) Learn in 60 seconds Card Lesson Quiz Medicare's payment system for hospital outpatient services. - · Annual OPPS rule sets APC weights, device pass-throughs, and ASC-payable procedure list - a major commercial determinant for outpatient devices. - · ASCs are paid under a parallel ASC payment system tied to OPPS. Remember this Watch out: A common pitfall is misunderstanding the impact of APCs on device reimbursement, assuming direct payment for devices rather than bundled payments for procedures. Another mistake is failing to monitor the annual OPPS rule changes, which can significantly affect market access and pricing strategies for outpatient MedTech. Companies sometimes overlook the distinct but parallel payment system for Ambulatory Surgical Centers (ASCs), leading to incomplete reimbursement strategies. Related terms - [Transitional Pass-Through Payment(TPT) ](/terms/tpt) - [ASC Site-of-Service Shift ](/terms/asc-shift) You may also need Auto-suggested from Reimbursement and shared keywords. - [Ambulatory Payment Classification(APC) ](/terms/apc) - [Site-Neutral Payment ](/terms/site-neutral-payment) - [MS-DRG(MS-DRG) ](/terms/ms-drg) - [Inpatient Prospective Payment System(IPPS) ](/terms/ipps) - [Bundled Payment ](/terms/bundled-payment) - [Medicare Physician Fee Schedule(MPFS) ](/terms/physician-fee-schedule) [All Reimbursement terms](/terms?cat=Reimbursement) MedTech Terms An authoritative, plain-language reference for the regulatory, quality, cybersecurity, and software terms that shape modern medical devices. 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