Required Upper Payment Limit Demonstrations
State Medicaid Director Letter (SMDL) 13-003 (PDF, 98.55 KB) requires states to annually submit Upper Payment Limit (UPL) demonstrations. To assist states in meeting this requirement, the Centers for Medicare & Medicaid Services (CMS) created reporting templates. These templates help standardize data collection and, through the use of embedded formulas, promote efficient reporting by states. Accompanying each template are instructions and a data dictionary that defines reporting variables. States submitting State Plan Amendments (SPAs) and annual UPLs are asked to complete a list of Medicaid Funding Questions.
The Medicaid Funding Questions (PDF, 54.75 KB) are used to identify the source of non-federal funding for payments made under each benefit category.
Authority to collect information using the OMB-approved UPL Templates
The regulations at 42 CFR § 431.16(a) require the state Medicaid agency to submit all reports required by the Health & Human Services (HHS) Secretary (the Secretary). In addition, the regulations at 42 CFR § 431.16(b) specify that the state Medicaid agency must follow the Secretary’s instruction with regard to the form and the content of those reports. The templates are collections of information which have been authorized by the Office of Management and Budget (OMB) and the Secretary. The Paperwork Reduction Act (PRA) process followed by CMS to receive OMB approval of the UPL templates required Secretarial clearance. This clearance, in conjunction with these regulations, require states to submit their UPL demonstrations using the templates. When using these templates, states will continue to have the same flexibilities with regard to demonstrating their UPL. The UPL templates ensure states are demonstrating UPLs in a uniform manner. Standardization of UPL reporting will promote faster processing of UPL demonstrations by CMS and enhance Federal/State fiscal oversight of the Medicaid program.
Timeframe for use of the UPL reporting templates
Beginning in state fiscal year (SFY) 2019, CMS will require states to submit UPL demonstrations using the OMB-approved templates for the following services:
- Inpatient Hospital Services
- Outpatient Hospital Services
- Nursing Facility Services
- Institutions for Mental Disease (IMD)
- Clinic Services
- Intermediate Care Facility for the Individuals with Intellectual Disabilities (ICF/IID)
- Psychiatric Residential Treatment Facility (PRTF)
- Qualified Practitioner Services (for states that pay targeted supplemental payments)
To meet the annual reporting requirement, states have the option to:
- Submit a prospective UPL demonstration at the beginning of the state fiscal year
- Submit a UPL demonstration during the state fiscal year, when modifying a payment methodology
- Submit a retrospective demonstration at the end of the state fiscal year
Previously, states have provided UPL demonstrations only when modifying payment subject to the UPL.
As discussed in SMDL 13-003, the documents below assist states in developing upper payment limit demonstrations that are consistent with the regulations and federal policies. In addition to the OMB approved templates, states must submit any data and narrative description necessary to support their UPL demonstrations.
Materials for UPL Submissions
These newly revised templates will allow states to report all of the UPL methodologies for each service type in one data input tab and the built in conditional formatting will guide states to only report the necessary data fields.
Here is a summary of the UPL Methodology (PDF, 282.53 KB) outlining how the formulas are applied to the UPL templates.
UPL demonstrations must be submitted by the state within each state fiscal year for the services below:
Inpatient Hospital Service
- Inpatient Hospital Services UPL Guidance (PDF, 862.68 KB)
- Inpatient Hospital Services UPL Instructions (PDF, 163.09 KB)
- Inpatient Hospital UPL Template (XLSX, 5.74 MB)
Institutions of Mental Disease
- Institutions of Mental Disease UPL Template (XLSX, 2.09 MB)
Outpatient Hospital Services
- Outpatient Hospital Services UPL Guidance (PDF, 207.69 KB)
- Outpatient Hospital Services UPL Instructions (PDF, 166.55 KB)
- Outpatient Hospital UPL Template (XLSX, 3.17 MB)
Nursing Facility Services
- Nursing Facility Services UPL Guidance (PDF, 870.65 KB)
- Nursing Facility Services UPL Instructions (PDF, 171.8 KB)
- Nursing Facility UPL Template (XLSX, 5.11 MB)
- Clinic Services UPL Guidance (PDF, 913.39 KB)
- Clinic Services UPL Instructions (PDF, 150.68 KB)
- Clinic Services UPL Template (XLSX, 1.87 MB)
Intermediate Care Facility for Individuals with Intellectual Disabilities
- Intermediate Care Facility for Individuals with Intellectual Disabilities UPL Guidance (PDF, 913.86 KB)
- Intermediate Care Facility for Individuals with Intellectual Disabilities UPL Instructions (PDF, 132.82 KB)
- Intermediate Care Facility for Individuals with Intellectual Disabilities UPL Template (XLSX, 2.17 MB)
Psychiatric Residential Treatment Facility
- Psychiatric Residential Treatment Facility UPL Guidance (PDF, 833.87 KB)
- Psychiatric Residential Treatment Facility UPL Instructions (PDF, 154.6 KB)
- Psychiatric Residential Treatment Facility Template (XLSX, 2.04 MB)
Qualified Practitioner Services Average Commercial Rate
- Qualified Practitioner Services Average Commercial Rate Guidance (PDF, 994.37 KB)
- Qualified Practitioner Services Average Commercial Rate Instructions (PDF, 273.27 KB)
- Qualified Practitioner Services Average Commercial Rate Template (XLSX, 1.35 MB)
UPL Trainings on Template Completion. There are three trainings provided for the mapping to the UPL templates including the following:
For questions related to UPL submissions, please see the UPL Demonstrations Questions and Answers. If your question is not addressed within the UPL Demonstration Questions and Answers, please direct your question to the CMS resource mailbox at: MedicaidUPL@cms.hhs.gov.
Federal Financial Participation Limits for Durable Medical Equipment
On December 27, 2017, CMS released a now updated SMDL 18-001 (PDF, 124.56 KB) to provide policy guidance to states on compliance with the statutory limit on available federal financial participation (FFP) for State Medicaid expenditures for Durable Medical Equipment (DME) authorized by section 1903(i)(27) of the Social Security Act (the Act) as established by section 503 of the Consolidated Appropriations Act, 2016 and further amended by section 5002 of the 21st Century Cures Act of 2016. Per the statute, the changes are effective on January 1, 2018. Below are the appendices discussed in the SMDL, offering some additional information related to state compliance options.
For questions related to compliance with the statutory limit on available federal financial participation (FFP) for State Medicaid expenditures for Durable Medical Equipment (DME), please consult the Frequently Asked Questions (FAQ) or direct your question to the CMS resource mailbox at: MedicaidDME@cms.hhs.gov.