Glossary · Updated Jul 6, 2026

OPPS Cap (Site-of-Service Payment Limit)

The OPPS cap limits the Physician Fee Schedule non-facility payment for certain procedures to what Medicare's Hospital Outpatient Prospective Payment System (OPPS) would pay for the same service, when that OPPS amount is lower. It applies only to specific, CMS-designated procedures — not to the fee schedule generally.

Why it exists

Section 5102(b) of the Deficit Reduction Act of 2005 directed CMS to cap payment for certain practice-expense-dominant procedures — ones where equipment or facility costs make up most of the cost — so that performing them in a physician office is never paid more than performing them in a hospital outpatient department. Without the cap, the office practice expense RVU could exceed the OPPS-equivalent amount and create an incentive to shift procedures out of facilities.

How it is applied

CMS publishes a precomputed, locality-specific capped price per code (and modifier) for both facility and non-facility settings. That figure is already the final payable amount after CMS's own cap formula — not an RVU-scale adjustment — so a rate engine applies it as a straight floor against the standard PFS calculation: if the OPPS-equivalent price is lower than the computed amount, the lower price is paid instead.

Not every code has one

Only the specific procedures CMS designates as OPPS-cap-eligible have a capped price on file. A code with no OPPS cap entry is priced entirely by the standard PFS formula, unaffected by this limit.

Frequently asked

Does the OPPS cap change a code's RVUs?

No. The RVUs and GPCIs are unchanged; the cap only limits the final computed amount for eligible codes when the OPPS-equivalent price is lower.

Does the cap apply to facility rates too?

CMS publishes separate capped prices for facility and non-facility settings, and a rate lookup applies whichever matches the requested setting.

Practice expense RVU Facility vs non-facility How Medicare pays

Sources

Written from primary CMS sources — see how we source, compute, and verify everything on this site.