CMS Pub. 100-04, ch. 3, § 20.1.2.2

For discharges prior to August 8, 2003, Statewide average CCRs are used in those instances

in which a hospital’s operating or capital CCRs fall above or below reasonable parameters.

CMS sets forth these parameters and the Statewide average CCRs in each year’s annual

notice of prospective payment rates.

For discharges occurring on or after August 8, 2003, the Medicare contractor may use a

Statewide average CCR if it is unable to determine an accurate operating or capital CCR for

a hospital in one of the following circumstances:

1. New hospitals that have not yet submitted their first Medicare cost report. (For this

purpose, a new hospital is defined as an entity that has not accepted assignment of an

existing hospital’s provider agreement in accordance with 42 CFR 489.18.)

2. Hospitals whose operating or capital CCR is in excess of 3 standard deviations above

the corresponding national geometric mean. This mean is recalculated annually by

CMS and published in the annual notice of prospective payment rates issued in

accordance with § 412.8(b) of the CFR.

3. Other hospitals which accurate data with which to calculate either an operating or

capital CCR (or both) are not available.

However, the policies of §20.1.2.1 part C and part E can be applied as an alternative to the

Statewide average.

For those hospitals assigned the Statewide average operating and/or capital CCRs, these

CCRs must be updated every October 1 based on the latest Statewide average CCRs

published in each year’s annual notice of prospective payment rates until the hospital is

assigned a CCR based on the latest tentative or final settled cost report or a CCR based on

the policies of §20.1.2.1 part C of this manual.

A hospital is not assigned the Statewide average CCR if its CCR falls below 3 standard

deviations from the national mean CCR. In such a case, the hospital’s actual operating or

capital CCR is used.