October 19, 2001

Report Language on UPL Included in Senate Labor-HHS Appropriations Bill

Report language accompanying the Senate Appropriations Committee-passed FY 2002 Labor-HHS appropriations bill expresses concern with any potential changes to the Medicare Upper Payment Limit (UPL) agreement established in a Jan. 12 final rule. The rule allows states to make Medicaid payments, including Medicaid Disproportionate Share Hospital payments, up to an aggregate upper limit of 150 percent of the amount that Medicare would pay for comparable services to public hospitals that are government owed or operated facilities.

Referencing last year's "Medicare, Medicaid & S-CHIP Benefits Improvement & Protection Act of 2000" which legislated the exception, the report (S. Rpt. 107-84) states, "The Committee is extremely concerned that eliminating the higher payment limit category compromise struck last year would be disastrous for all safety net hospitals, both public and private, that participate in the Medicaid program. Any subsequent modifications should be done only after the administration has had an opportunity to assess the implementation of the new regulations and only in consultation with the States and their Medicaid programs, as well as the other stakeholders."

Centers for Medicare and Medicaid Services Administrator Tom Scully has indicated that he is considering reducing the UPL for public hospitals from 150 percent to 100 percent. The AAMC has been working with other national hospital organizations in opposition to any change.

The report language, while influential, does not carry the force of law.

Information: Lynne L. Davis, AAMC Office of Governmental Relations, 202-828-0526.