A numerical procedure to predict the effects of gaseous cavitation in moderately to heavily loaded bearings is developed. The method is an outgrowth of the Elrod algorithm which is simple to use and which automatically implements cavitation boundary conditions at film rupture and reformation. The current procedure makes use of type differencing in the shear induced flow formulation to automatically switch from central to upwind differences, and vice versa, at cavitation boundaries. Comparison is made with the results obtained using Elrod's algorithm for various test cases involving both slider and journal bearings.