; (II) for a cost reporting period beginning on or after October 1, 2028, there shall be substituted for the preceding 12-month cost reporting period the cost reporting period for which the target amount determined under subparagraph (A) is the highest among the 5 cost reporting periods for which the Secretary has the most recent settled cost reports; (III) any reference in subparagraph (A)(i) to the first such cost reporting period is deemed a reference to the first cost reporting period following the 12-month cost reporting period beginning during fiscal year 2015; and (IV) the applicable percentage increase shall only be applied under subparagraph (B)(ii) for cost reporting periods beginning on or after October 1, 2023. . 203. Medicare DSH target adjustment for hospitals in territories Section 1886(b)(3) of the Social Security Act ( 42 U.S.C. 1395ww(b)(3) ), as amended by section 202, is further amended by adding at the end the following new subparagraph: (N) (i) For each cost reporting period beginning on or after October 1, 2023, in the case of a hospital that is located in a territory of the United States other than Puerto Rico and that would be a subsection (d) hospital if it were located in one of the 50 States, the target amount shall be increased by— (I) in the case that such hospital has a disproportionate patient percentage of not less than 15 percent and not greater than 40 percent, 10 percent