(4) Phase-out of the indirect costs of medical education from capitation rates (A) In general After determining the applicable amount for an area for a year under paragraph (1) (beginning with 2010), the Secretary shall adjust such applicable amount to exclude from such applicable amount the phase-in percentage (as defined in subparagraph (B)(i)) for the year of the Secretary’s estimate of the standardized costs for payments under section 1395ww(d)(5)(B) of this title in the area for the year. Any adjustment under the preceding sentence shall be made prior to the application of paragraph (2). (B) Percentages defined For purposes of this paragraph: (i) Phase-in percentage The term “phase-in percentage” means, for an area for a year, the ratio (expressed as a percentage, but in no case greater than 100 percent) of— (I) the maximum cumulative adjustment percentage for the year (as defined in clause (ii)); to (II) the standardized IME cost percentage (as defined in clause (iii)) for the area and year. (ii) Maximum cumulative adjustment percentage The term “maximum cumulative adjustment percentage” means, for— (I) 2010, 0.60 percent; and (II) a subsequent year, the maximum cumulative adjustment percentage for the previous year increased by 0.60 percentage points. (iii) Standardized IME cost percentage The term “standardized IME cost percentage” means, for an area for a year, the per capita costs for payments under section 1395ww(d)(5)(B) of this title (expressed as a percentage of the fee-for-service amount specified in subparagraph (C)) for the area and the year. (C) Fee-for-service amount The fee-for-service amount specified in this subparagraph for an area for a year is the amount specified under subsection (c)(1)(D) for the area and the year.