Upper Payment Limit FAQs
Unlike the UPLs for other Medicaid institutional payments, which rely on an aggregate approach by ownership category (private, state owned, non state government owned) to ensure Medicaid payments are consistent with efficiency and economy, the PRTF UPL is calculated for each facility. Specifically, the UPL relies on 42 CFR 447.325 which states that Medicaid agencies “may pay the customary charges of the provider but must not pay more than the prevailing charges in the locality for comparable services under comparable circumstances." The plain language meaning of this requirement is that a state may pay a PRTF no more than it charges for covered Medicaid services provided to Medicaid recipients.
The UPL data for out of state providers does not need to be included in the UPL demonstration. If the state has provider level data then it may include it in the demonstration within the private ownership category of providers.
Yes, the state is required to report the number of Medicaid days. This information is recorded at variable 310 – Medicaid days.