The classification of urban or rural location differs by data year:

Prior to 2004, this information was obtained from the AHA Annual Survey of Hospitals. A Metropolitan Statistical Area (MSA) was considered urban, and a non-metropolitan statistical area was classified as rural.

Beginning with the 2004 data, the classification of urban or rural hospital location used the newer Core Based Statistical Area (CBSA) codes. CBSA groups were based on 2000 Census data, whereas the MSA groups were based 1990 Census data. Hospitals residing in counties with a CBSA type of "Division" or "Metro" were considered urban, while hospitals with a CBSA type of "Rural" or "Micropolitan" were classified as rural. This change in 2004 contributed to a slight decline in the number of hospitals that were classified as rural and a corresponding increase in the number of hospitals that were classified as urban. Beginning with the 2014 data, the CBSA groups were updated based on the 2010 Census.

Government payment policies often differ according to this designation. Also, rural hospitals are generally smaller and offer fewer services than urban hospitals.

The HCUP variable name for the hospital's location category has changed over time. In the 1993-1997 NIS, this same information is stored in the variable H_LOC. Beginning with the 1998 NIS, the name HOSP_LOCATION is used. In the 1988-1992 NIS, the hospital's location category was not available.

For detailed information about the NIS sampling design, see the year-specific report on the Design of the HCUP Nationwide Inpatient Sample.