The inpatient reimbursement plan for Medicare Part A is based off the payments for operating costs that are related to inpatient stays in hospitals under the Medicare Part A rates. The rates are defined under the payment system as inpatient prospective payments. The rates are configured by using a mathematical configuration of determining the inpatient reimbursement. The rates are configured as a base payment rate, and then divided to split the labor related share and the non-labor share. Once that has been established the labor-related share is modified by the wage index, and also is suited for the area in which the hospital is located. The non-labor share is then modified by the cost of living factor of the area and the base payment rate
