CMS Repeals 150% Medicaid
UPL
January 25, 2002 - The Centers for Medicare and Medicaid Services (CMS) Jan. 18 published
a final rule [67
Federal Register 2602] that reduced Medicaid's 150 percent
upper payment limit (UPL) for non-state government owned/operated hospitals
to 100 percent of Medicare payments for comparable services. CMS had
published the proposed rule on Nov. 23, 2001.
The January 2002 rule modifies a January 2001 final rule [66
Federal Register 3148] that set the Medicaid UPL for all
hospitals, except non-state government owned/operated hospitals, at
100 percent of Medicare payments for comparable services. CMS initially
allowed the 150 percent exception for non-state government hospitals
"because of their important role in serving the Medicaid population."
In the most recent rule, CMS explained that the regulatory change was
based largely on studies conducted by the Office of the Inspector General
(OIG) that found that states often do not use the UPL payments to ensure
access for Medicaid beneficiaries.
States that meet specific criteria may qualify for a transition period.
According to CMS, the 2002 rule will affect 31 states and, from FY 2002
through FY 2006, save the federal government about $9 billion in federal
matching funds.
CMS issued the final rule less than 4 weeks after the end of the November
proposed rule comment period. Eliminating the 150 percent UPL was a
high priority for CMS Administrator Thomas Scully who, last year, called
the financing mechanism "the single biggest outrage I have ever
seen in the history of government finance."
The AAMC joined about 200 other organizations and individuals in submitting
comments and concerns to CMS. In addition, the joint House and Senate
conference report to the FY 2002 Labor-HHS Appropriations bill (signed
into law on Jan. 10) expressed extreme concern that "eliminating
the higher payment limit category . . . would be disastrous for all
safety net hospitals, both public and private, that participate in the
Medicaid program." Rep. Nathan Deal (R-Ga.) and Sen. Blanche Lincoln
(D-Ark.) have sponsored legislation that would delay any changes to
the UPL policy.
Information: Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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