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.
Where inflation is not applied to property costs, please separate out this cost from the Medicare UPL by reporting these amounts in variable 402 - Adjustment to the Medicare UPL.