Upper Payment Limit FAQs

Yes, states may use UPL methodologies that are different from their payment methodologies. For example, a state may pay for inpatient hospital services using a Medicaid APR-DRG methodology, but use a cost methodology to compute the Medicare upper payment limit for its UPL demonstration.

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.