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    OpenPayerPolicy UpdatesReimbursement/Payment PolicyUtah Medicaid Outpatient UPL Update | OpenPayer
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    CurrentUtah MedicaidPolicy 25-001626-0010

    UPL Calculation Overview

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    This policy governs Utah Medicaid outpatient hospital upper payment limit calculations, including hospital-specific cost-to-charge ratios, Medicaid charges and payments, trending, spending gaps, and special treatment for critical access hospitals.

    Policy Summary
    PayerUtah Medicaid
    PolicyUPL Calculation Overview
    Policy CodePolicy 25-001626-0010
    Change TypeUtilization trend revised to 14.2% for State Fiscal Year 2027
    Effective DateJuly 1, 2026
    Next Review DateNot scheduled
    Key ActionExclude claims with third-party liability from UPL calculations.
    SourceLink
    POLICY UPDATE CHANGES

    The utilization trend for State Fiscal Year 2027 was updated to 14.2 percent.

    14.2%SFY 2027 utilization trend
    101% of costCritical access hospital basis
    2Independently calculated UPL categories
    ExcludedThird-party liability claims

    Outpatient Hospital UPL Calculation Rules

    Outpatient Hospital UPL Calculation Rules

    The Medicaid outpatient hospital upper payment limit (UPL) is calculated separately for state hospitals and non-state government-owned hospitals using hospital-specific Medicare outpatient cost-to-charge ratios applied to Medicaid outpatient charges. Each UPL is reduced by applicable Medicaid outpatient payments to determine the available spending room (gap).

    UPL calculation requirements

    • Hospital classification

      • Calculate the Medicaid UPL independently for state hospitals.
      • Calculate the Medicaid UPL independently for non-state government-owned hospitals.

    • Cost and charge methodology

      • Apply each hospital's specific Medicare outpatient cost-to-charge ratio to Medicaid outpatient charges.
    Policy Summary
    PayerUtah Medicaid
    PolicyUPL Calculation Overview
    Policy CodePolicy 25-001626-0010
    Change TypeUtilization trend revised to 14.2% for State Fiscal Year 2027
    Effective DateJuly 1, 2026
    Next Review DateNot scheduled
    Key ActionExclude claims with third-party liability from UPL calculations.
    SourceLink
    On This Page
    Outpatient Hospital UPL Calculation RulesCalculation Inputs and FormsUPL Calculation RequirementsUPL Calculation Terms

    OpenPayer is powered by Trek Health's payer performance platform. Trek continuously ingests, validates, and normalizes Transparency in Coverage data alongside payer policies and other commercial payer data to create a structured payer intelligence foundation. OpenPayer uses this foundation to deliver personalized search results, dynamically generated policy pages, and tailored policy monitoring based on each user's payers, specialties, billing codes, and areas of interest. The same intelligence powers broader payer performance workflows, including reimbursement benchmarking, contract evaluation, payer negotiations, and financial decision-making.

  1. For critical access hospitals, calculate costs at 101 percent of cost, with applicable inflation and utilization adjustments added as described below.

  2. UPL spending room

    • Offset each Medicaid UPL by the hospital's Medicaid outpatient payments to determine the available spending room (gap) applicable to that UPL.

  3. Claims included and excluded

    • Use paid hospital outpatient claims for services in a recent period, as available when the calculation is made.
    • Exclude claims with third-party liability from the calculation.

  4. Hospital reporting period

    • Include hospitals with fiscal year ends occurring during the applicable state fiscal year.

  5. Trending to the applicable spending year

    • Trend the base year used to determine each Medicaid UPL to the applicable spending year using an inflation trend and a utilization trend.
    • Calculate the annual inflation trend using the consumer price index for "Outpatient Hospital Services" published by the U.S. Department of Labor, U.S. Bureau of Labor Statistics, available in the December before the start of each state fiscal year, compared with the previous December.
    • Calculate the utilization trend using historical Utah Medicaid outpatient hospital services data.
    • For State Fiscal Year 20267, the utilization trend is stated as -5.314.2 percent in the source.

  6. Medicare cost-to-charge ratio source data

    • For Medicare cost report form 2552-96, use costs from Worksheet D, Part V, Columns 9, 9.01, 9.02, and 9.03, line 104.
    • For Medicare cost report form 2552-10, use costs from Worksheet D, Part V, Columns 5, 6, and 7, line 202.
    • For Medicare cost report form 2552-96, use charges from Worksheet D, Part V, Columns 5, 5.01, 5.02, and 5.03, line 104.
    • For Medicare cost report form 2552-10, use charges from Worksheet D, Part V, Columns 2, 3, and 4, line 202.
    • If Medicare amends the cost report structure, use the corresponding Medicare Cost Report data in place of the elements specified above.

    7. Calculation Inputs and Forms

    Medicare cost report formsmixed
    2552-96Medicare cost report form referenced for Worksheet D, Part V, line 104 cost and charge data.
    2552-10Medicare cost report form referenced for Worksheet D, Part V, line 202 cost and charge data.
    State Fiscal Year 2027 utilization trend
    State Fiscal Year2027
    Utilization trend14.2 percent
    ApplicationUsed to trend the base year to the applicable spending year
    Critical access hospital cost basis
    Hospital typeCritical access hospitals
    Calculation basis101 percent of cost
    Additional adjustmentAdd any appropriate inflation and utilization trends

    UPL Calculation Requirements

    Billing Rule

    Exclude third-party liability claims

    Exclude claims with third-party liability from the Medicaid outpatient hospital upper payment limit calculations.

    Documentation Required

    Use paid outpatient claim data

    Use paid hospital outpatient claims from services in a recent period and as available at the time the calculation is made as the Medicaid charges and payments data source.

    Billing Rule

    Apply UPL trend and critical access hospital rules

    Trend the base year to the applicable spending year using the required inflation and utilization trends. For critical access hospitals, calculate costs at 101 percent of cost and add any appropriate inflation and utilization.

    UPL Calculation Terms

    Available spending room (gap)
    TermAvailable spending room (gap)
    CalculationThe amount remaining after Medicaid outpatient payments are offset against the applicable Medicaid upper payment limit
    ApplicationDetermined for each Medicaid upper payment limit
    Medicare cost-to-charge ratio
    SourceMedicare cost report costs and charges
    CalculationCosts are divided by charges to calculate the Medicare outpatient cost-to-charge ratio
    ApplicationApplied to Medicaid outpatient charges
    Updated report structureUse corresponding Medicare cost report data if Medicare amends the cost report structure
    Inflation trend
    FrequencyAnnual average
    IndexConsumer price index for Outpatient Hospital Services
    PublisherU.S. Department of Labor, U.S. Bureau of Labor Statistics
    Comparison periodDecember prior to the start of each state fiscal year compared with the previous December
    Utilization trend
    MeasureUtilization trend
    Data sourceHistorical Utah Medicaid outpatient hospital services data
    PurposeTrend the base year to the applicable spending year