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Frequently Asked Questions

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.

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When a state pays a provider at reconciled cost using Certified Public Expenditures 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 reconciled 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 reconciled cost. Due to this payment limitation, states should not include any provider paid at reconciled 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 reconciled cost and confirm by provider use of either a Medicare cost report or Centers for Medicare & Medicaid Services-approved cost report template to identify allowed cost. Further, states must document the ownership status (state owned, non-state government owned, or private) of each provider.

FAQ ID:92436

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What materials does CMS require a state to submit as part of the Upper Payment Limit (UPL) Demonstration submission package?

The submission package consists of the completed templates and any supporting documentation needed to understand the UPL demonstration. This could include the completed Guidance document and supporting documentation (in Microsoft Excel with formulas included, not as a PDF) that is necessary to further explain a state's UPL demonstration, and a summary spreadsheet that aggregates the UPL gap for each of the ownership categories (state government owned, non-state government owned, and private).

FAQ ID:92236

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For our Nursing Facility (NF) Upper Payment Limit (UPL) calculation we separate Medicaid allowable costs into three categories: salaries and benefits, operating costs, and property costs. Based on previous guidance from CMS, we do not apply an inflation factor to the property costs. In looking at the template, it appears the inflation factor is applied to all costs. Is this correct?

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.

FAQ ID:92361

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When 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

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