"This Public Use File presents the data elements needed to determine Factor 3 for FY 2018 based on an S-10 methodology.  Factor 3 is calculated as UCC defined as bad debt and charity care, as reported in FY 2014 cost reports. "	
	
Methodology for Calculating Factor 3 based on S-10:	
Data Sources:	
1.	FY 2016 IPPS Final Rule Correction Notice
2.	Mergers and Acquisitions list for FYs 2016 and 2017 (7/8/15 and 2/12/16)
3.	List of Sole Community Hospitals provided by CMS projected to be paid on their Hospital-specific Rate for FY 2017 (3/23/16)
4.	Terminated/Tied Out of Medicare List (2/22/16)
5.	CMS-provided 2014 Medicare Cost Reports Worksheet S-10 Data (3/4/16) (December 2015 HCRIS Update)
6.	CMS-provided FY 2017 DSH Eligible List (3/17/16)
	
Double Trim Methodology:	
1.	"Determine cost to charge ratio (CCR) from Worksheet S-10, Column 1, Line 1"
2.	Flag and hold aside hospitals whose CCR is greater than or equal to 1.146
3.	"Calculate the state average CCR for all hospitals not flagged in Step 2 (this includes non-DSH hospitals, i.e, all other hospitals in data source 5)"
	• Each record (including those for hospitals with multiple records in the FY 2014 Medicare Cost Reports) is included in the statewide average calculation
4.	Apply the state average CCR to hospitals flagged in Step 2.
5.	Calculate the natural log of CCR for all hospitals after the trim applied in Step 4
6.	"Determine the mean and standard deviation of the list in Step 5, with all observations equally weighted"
7.	"Flag all hospitals whose natural logged CCR exceeds a threshold of over three standard deviations from the mean, as calculated in Step 6"
8.	Apply the state average CCR to hospitals flagged in Step 7
	
Factor 3 Calculation:	
1.	"Determine list of hospitals to analyze by using all hospitals listed in data sources 2, 4, and 6 which are not in Maryland (provider number '21XXXX')"
	"• For calculation purposes, each cost report record is treated as an individual entity, and a hospital's final Factor 3 is the sum of these records as identified in the PUF"
2.	Apply double trimmed CCRs to this list of hospitals as described above
	UCC Calculation:
3.	Calculate UCC as defined as Charity Care and Non-Medicare Bad Debt:
	"[(Line 1 CCR adjusted by double trim if applicable x charity care S-10 line 20, column 3) – (Payments received for charity care S-10 line 22, Column 3)] + [(Line 1 CCR adjusted by double trim if applicable  x Non-Medicare and non-reimbursable Bad Debt S-10 line 28)]"
	• Missing values of each formula component are treated as zero in this step
	• Negative values of each formula component are left unchanged
	"• Hospitals without a cost to charge ratio reported on S-10, Column 1, Line 1 have a Factor 3 of zero"
4.	Set all negative values for UCC from the calculation in Step 3 to zero
	Exclusions:
5.	Set the UCC value to zero for all hospitals that appear in the Terminated/Tied-Out of Medicare list
6.	Set the UCC value to zero for all Sole Community Hospitals that are projected to be paid on their Hospital-specific Rate for FY 2017
	Mergers and Acquisitions:
7.	"For hospitals on the Mergers and Acquisitions List, a surviving hospital's UCC value is modified to be the sum of its own UCC value plus its corresponding non-surviving hospital's UCC"
8.	Set all terminated/tied out hospitals' UCC value to zero
	Factor 3 for DSH Eligible Hospitals:
9.	"Determine list of hospitals who are eligible for DSH (flagged ""YES"") in the DSH Eligible List who are also not Sole Community Hospitals as determined in Step 6."
10.	Calculate the sum of the UCC values as they stand after Step 8 for DSH-eligible hospitals as determined in Step 9.
11.	"For each hospital in Step 9, calculate Factor 3 to be its proportion of this sum"
	Factor 3 for Non-DSH Eligible Hospitals
12.	"For each hospital flagged under the ""Exclusions"" section, calculate Factor 3 to be its value over the sum as determined in Step 10."
