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97 STAT. 154 PUBLIC LAW 98-21—APR. 20, 1983 adjusted DRG prospective payment rate, determined under paragraph (3) for such discharges; and "(ii) on or after October 1, 1985, and before October 1, 1986, is a combined rate consisting of 50 percent of the national adjusted DRG prospective payment rate, and 50 percent of the regional adjusted DRG prospective payment rate, determined under paragraph (3) for such discharges. "(2) The Secretary shall determine a national adjusted DRG pros- pective payment rate, for each inpatient hospital discharge in fiscal year 1984 involving inpatient hospital services of a subsection (d) hospital in the United States, and shall determine a regional adjusted DRG prospective payment rate for such discharges in each region, for which payment may be made under part A of this title. Each such rate shall be determined for hospitals located in urban or rural areas within the United States or within each such region, respectively, as follows: "(A) DETERMINING ALLOWABLE INDIVIDUAL HOSPITAL COSTS FOR BASE PERIOD.—The Secretary shall determine the allowable operating costs per discharge of inpatient hospital services for the hospital for the most recent cost reporting period for which data are available. "(B) UPDATING FOR FISCAL YEAR I984.—The Secretary shall update each amount determined under subparagraph (A) for fiscal year 1984 by— "(i) updating for fiscal year 1983 by the estimated average rate of change of hospital costs industry-wide between the cost reporting period used under such subparagraph and fiscal year 1983 and the most recent case-mix data availa- ble, and "(ii) projecting for fiscal year 1984 by the applicable percentage increase (as defined in subsection (b)(3)(B)) for fiscal year 1984. "(C) STANDARDIZING AMOUNTS.—The Secretary shall standard- ize the amount updated under subparagraph (B) for each hospi- tal by— "(i) excluding an estimate of indirect medical education costs, "(ii) adjusting for variations among hospitals by area in the average hospital wage level, and "(iii) adjusting for variations in case mix among hospitals. "(D) COMPUTING URBAN AND RURAL AVERAGES.—The Secretary shall compute an average of the standardized amounts deter- mined under subparagraph (C) for the United States and for each region— "(i) for all subsection (d) hospitals located in an urban area within the United States or that region, respectively, and "(ii) for all subsection (d) hospitals located in a rural area within the United States or that region, respectively. 'Region." For purposes of this subsection, the term 'region' means one of the nine census divisions, comprising the fifty States and the District of Columbia, established by the Bureau of the Census 'Urban area." for statistical and reporting purposes; the term 'urban area' means an area within a Standard Metropolitan Statistical Area (as defined by the Office of Management and Budget) or within such similar area as the Secretary has recognized under subsec-