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Step 5Compute operating and capital outlier threshold (CMS applies a geographic adjustment to the operating and capital outlier threshold to account for local cost variation): Operating CCR to Total CCR = (Operating CCR)/(Operating CCR + Capital CCR) Operating Outlier Threshold = [Fixed Loss Threshold ((Labor-Related Portion CBSA Wage Index) + Nonlabor-Related portion)] Operating CCR to Total CCR + Federal Payment with IME, DSH + Uncompensated Care Payment + supplemental payment for eligible IHS/Tribal hospitals and Puerto Rico hospitals + New Technology Add-On Payment Amount Capital CCR to Total CCR = (Capital CCR)/(Operating CCR + Capital CCR) Capital Outlier Threshold = (Fixed Loss Threshold Geographic Adjustment Factor Capital CCR to Total CCR) + Federal Payment with IME and DSH Step 6Compute operating and capital outlier payments: Marginal Cost Factor = 0.80 or 0.90 (depending on the MS-DRG) Operating Outlier Payment = (Operating CostsOperating Outlier Threshold) Marginal Cost Factor Capital Outlier Payment = (Capital CostsCapital Outlier Threshold) Marginal Cost Factor The payment rate may then be further adjusted for hospitals that qualify for a low-volume payment adjustment under section 1886(d)(12) of the Act and 42 CFR 412.101(b)