Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.
Frequently Asked Questions
Now that Upper Payment Limit (UPL) demonstrations are submitted to a central e-mailbox, will the CMS Regional Office still have a role in reviewing UPL demonstrations or will the review be performed by the Central Office?
The Regional Office will continue to review state UPL demonstrations and states will continue to work with the CMS Regional Offices as a first point of contact concerning their UPL demonstrations.
FAQ ID:92256
SHARE URLCan states that pay for inpatient hospital services using Diagnosis Related Grous (DRGs), but historically used a cost-based UPL, continue to use the cost-based Upper Payment Limit (UPL) method?
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.
FAQ ID:92386
SHARE URLHow should cost data reported for a partial year be treated either when one hospital acquires another hospital or a hospital ceases operation?
When a hospital acquires another hospital, the state should use all available data to determine the UPL and work with CMS to assure appropriate reporting. When a hospital ceases operation, the state should not annualize data if it does not cover a 12-month period.
FAQ ID:92391
SHARE URLWhen a state pays a provider at cost during the period covered by the Upper Payment Limit (UPL) demonstration, how should the provider's data be treated?
The UPL limits payment to the Medicare rate or cost. Providers paid at cost may receive no more than their reconciled amount. As a result, states cannot attribute the "UPL room" from other providers to pay additional amounts to any provider paid at cost. Due to this payment limitation, states should not include any provider paid at cost in their UPL demonstrations; however, they must account for these providers. Specifically, states must include with their UPL submissions documentation of those providers paid at cost and, therefore, excluded from the calculation of the UPL.
FAQ ID:92396
SHARE URLCan the Outpatient Hospital (OPH) Services Upper Payment Limit (UPL) demonstration consider Clinical Diagnostic Laboratory (CDL) services?
Section 1903(i)(7) of the Social Security Act specifies a separate UPL for CDL services which limits payment to no more than the Medicare rate on a per test basis. To meet the statutory provision, the UPL for CDL services must be separately demonstrated from the OPH services UPL. States do not have the ability to "borrow room" from the CDL UPL and apply it to the OPH UPL.
FAQ ID:92401
SHARE URLMay a state use all-payer data or the Medicare-specific data from the Medicare Hospital Cost Report (CMS Form 2552) to calculate the cost-to-charge ratios?
Yes, a state may choose between using all-payer data or Medicare-specific data from the Medicare Hospital Cost Report (CMS Form 2552) to determine the cost-to-charge ratios.
FAQ ID:92406
SHARE URLCan CMS provide a list of the revenue codes that are approved to be included in the outpatient hospital Upper Payment Limit (UPL) or conversely the revenue codes that cannot be included?
To date, CMS has not published a list of revenue codes that must be included or excluded from this service category. Medicaid outpatient hospital services are defined at 42 Code of Federal Regulations (CFR) 440.20 and include “preventive, diagnostic, therapeutic, rehabilitative, or palliative services”. In the state plan, states further define those services covered as outpatient hospital services.
FAQ ID:92411
SHARE URLHow is the Psychiatric Residential Treatment Facility (PRTF) Upper Payment Limit (UPL) different from other institutional UPLs?
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.
FAQ ID:92416
SHARE URLIs the state required to report in the Psychiatric Residential Treatment Facility (PRTF) Upper Payment Limit (UPL) template the number of service days for Medicaid beneficiaries?
Yes, the state is required to report the number of Medicaid days. This information is recorded at variable 310 – Medicaid days.
FAQ ID:92421
SHARE URLHow should a state report Upper Payment Limit (UPL) data for out of state providers?
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.
FAQ ID:92426
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