---
kind: "section"
citation: "42 C.F.R. § 447.272"
title: "42"
number: "447.272"
heading: "Inpatient services: Application of upper payment limits."
url: "https://uscodex.org/cfr/42/447.272"
---

# §447.272. Inpatient services: Application of upper payment limits.

- (a) **Scope.** This section applies to rates set by the agency to pay for inpatient services furnished by hospitals, NFs, and ICFs/IID within one of the following categories:
  - (1) State government-owned or operated facilities (that is, all facilities that are either owned or operated by the State).
  - (2) Non-State government-owned or operated facilities (that is, all government facilities that are neither owned nor operated by the State).
  - (3) **Privately-owned and operated facilities.**
- (b) **General rules.**
  - (1) Upper payment limit refers to a reasonable estimate of the amount that would be paid for the services furnished by the group of facilities under Medicare payment principles in subchapter B of this chapter.
  - (2) Except as provided for in [paragraph (c)](#c) of this section, aggregate Medicaid payments to a group of facilities within one of the categories described in [paragraph (a)](#a) of this section may not exceed the upper payment limit described in [paragraph (b)(1)](#b-1) of this section.
- (c) **Exceptions—**
  - (1) **Indian Health Services and tribal facilities.** The limitation in [paragraph (b)](#b) of this section does not apply to Indian Health Services facilities and tribal facilities that are funded through the Indian Self-Determination and Education Assistance Act (Pub. L. 93-638).
  - (2) **Disproportionate share hospitals.** The limitation in [paragraph (b)](#b) of this section does not apply to payment adjustments made under section 1923 of the Act that are made under a State plan to hospitals found to serve a disproportionate number of low-income patients with special needs as provided in [section 1902(a)(13)(A)(iv)](/cfr/42/1902.md?p=a-13-A-iv) of the Act. Disproportionate share hospital (DSH) payments are subject to the following limits:
    - (i) **The aggregate DSH limit using the Federal share of the DSH limit under section 1923(f) of the Act.**
    - (ii) **The hospital-specific DSH limit in section 1923(g) of the Act.**
    - (iii) **The aggregate DSH limit for institutions for mental disease (IMDs) under section 1923(h) of the Act.**
- (d) **Compliance dates.** Except as permitted under paragraph (e) of this section, a State must comply with the upper payment limit described in [paragraph (b)](#b) of this section by one of the following dates:
  - (1) **For non-State government owned or operated hospitals,—** March 19, 2002.
  - (2) **For all other facilities—** March 13, 2001.

## Notes

### Amendments

[66 FR 3175, Jan. 12, 2001, as amended at 66 FR 46399, Sept. 5, 2001; 67 FR 2610, Jan. 18, 2002; 72 FR 29834, May 29, 2007; 75 FR 73975, Nov. 30, 2010; 77 FR 31512, May 29, 2012]

### Source

Source: 46 FR 47971, Sept. 30, 1981, unless otherwise noted.

### Authority

Authority: 42 U.S.C. 1302, and 1396r-8, and Pub. L. 111-148.

### Source

Source: 43 FR 45253, Sept. 29, 1978, unless otherwise noted.

### Amendments

[66 FR 3175, Jan. 12, 2001, as amended at 66 FR 46399, Sept. 5, 2001; 67 FR 2610, Jan. 18, 2002; 72 FR 29834, May 29, 2007; 75 FR 73975, Nov. 30, 2010; 77 FR 31512, May 29, 2012]