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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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Can you explain the difference between a prospective Upper Payment Limit (UPL) and a retrospective UPL?

The difference between a prospective and retrospective UPL is in the relationship between the UPL demonstration period and the date when the UPL is submitted. For a UPL demonstration period of 7/1/2018 to 6/30/2019, a UPL is considered retrospective when it is submitted on or after the start of the demonstration period (on or after 7/1/2018). Using the same UPL demonstration period (7/1/2018 to 6/30/2019), a UPL is considered prospective if it is submitted prior to 7/1/2018.

FAQ ID:92431

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How is the demonstration year defined? For example, if a state has a fiscal year starting on July 1, 2016 and ending on June 30, 2017, is the Upper Payment Limit (UPL) demonstration entered with the SFY 2016/17 State Plan Amendment considered to be a "2016 demonstration" or a "2017 demonstration"?

The UPL demonstration year is defined according to the last year encompassed by the demonstration. For example, a UPL covering the period 07/01/2016 to 06/30/2017 is defined as the 2017 UPL.

FAQ ID:92231

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Can 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

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