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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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Are states only required to conduct Upper Payment Limit (UPL) demonstrations for services with approved state plan supplemental payment methodologies?

No, an upper payment limit demonstration considers all Medicaid payments (base and supplemental). States must conduct UPL demonstrations for the applicable services described in State Medicaid Director Letter (SMDL) 13-003 regardless of whether a state makes supplemental payments under the Medicaid state plan for the services.

FAQ ID:92191

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Should the period of time covered by the Upper Payment Limit (UPL) demonstration be tied to the state's fiscal year?

No, CMS does not require any particular starting point within the fiscal year for the UPL demonstrations. This allows states the flexibility to develop UPL demonstrations that are tied to the provider payment periods described in the state plan payment methodologies for each service. For instance, if a state submits a state plan amendment to update provider payments as of October 1 of each year, the state would document that the SPA changes comply with the UPL for the period 10/1 - 9/30 of that payment year. The UPL must represent the entire payment year. Since UPL demonstrations usually rely on historic data that is projected into a payment year, this is consistent with past practices.

FAQ ID:92226

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