(c) INAPPLICABILITY OF ADJUSTMENTS FOR BUDG-
ET NEUTRALITY.—Section 1895(b)(3) of such Act (42
U.S.C. 1395fff(b)(3)) is amended by adding at the end
the following new subparagraph:
‘‘(D) NO
ADJUSTMENT
FOR
ADDITIONAL
PAYMENTS
FOR
RURAL
SERVICES
AND
SECU-
RITY SERVICES.—The Secretary shall not re-
duce the standard prospective payment amount
(or amounts) under this paragraph applicable
to home health services furnished during a pe-
riod to offset the increase in payments resulting
from the application of paragraph (7) (relating
to services furnished in rural areas) and para-
graph (8) (relating to costs of security serv-
ices).’’.
(d) EFFECTIVE DATE.—The amendments made by
this section apply with respect to items and services fur-
nished on or after October 1, 2000.
SEC. 5. EXCLUSION OF NONROUTINE MEDICAL SUPPLIES
UNDER THE PPS FOR HOME HEALTH SERV-
ICES.
(a) IN GENERAL.—Section 1895 of the Social Secu-
rity Act (42 U.S.C. 1395fff) is amended by adding at the
end the following new subsection:
‘‘(e) EXCLUSION OF NONROUTINE MEDICAL SUP-
PLIES.—
‘‘(1) IN GENERAL.—Notwithstanding the pre-
ceding provisions of this section, in the case of all
nonroutine medical supplies (as defined by the Sec-
retary) furnished by a home health agency during a
year (beginning with 2001) for which payment is
otherwise made on the basis of the prospective pay-
ment amount under this section, payment under this
section shall instead be based on the lesser of—
‘‘(A) the actual charge for the nonroutine
medical supply, or
‘‘(B) the amount determined for such sup-
ply under the applicable fee schedule under part
B.
‘‘(2) BUDGET NEUTRALITY ADJUSTMENT.—The
Secretary shall provide for an appropriate propor-
tional reduction in payments under this section so
that beginning with fiscal year 2001, the aggregate
amount of such reductions is equal to the aggregate
increase in payments (as estimated by the Secretary)
attributable to the exclusion effected under para-
graph (1).’’.
(b) 
CONFORMING
AMENDMENTS.—(1) 
Section
1895(b)(1) of the Social Security Act (42 U.S.C.
1395fff(b)(1)) is amended by striking ‘‘The Secretary’’
and inserting ‘‘Subject to subsection (e), the Secretary’’.
(2) Sections 1842(b)(6)(F) and 1862(a)(21) of the
Social 
Security 
Act 
(42 
U.S.C. 
1395u(b)(6)(F);
1395y(a)(21)) are each amended by striking ‘‘(including
medical supplies described in section 1861(m)(5), but ex-
cluding durable medical equipment to the extent provided
for in such section)’’ and inserting ‘‘(other than medical
supplies and durable medical equipment described in sec-
tion 1861(m)(5))’’.
(c) EFFECTIVE DATE.—The amendments made by
this section apply with respect to items and services fur-
nished on or after October 1, 2000.
SEC. 
6. 
RULE 
OF 
CONSTRUCTION 
RELATING 
TO
TELEHOMEHEALTH SERVICES.
(a) IN GENERAL.—Section 1895(b) of such Act (42
U.S.C. 1395fff(b)(3)), as amended by section 3, is further
amended by adding at the end the following paragraph:
‘‘(9) RULE
OF
CONSTRUCTION
RELATING
TO
TELEHOMEHEALTH SERVICES.—
‘‘(A) IN GENERAL.—Nothing in this sec-
tion, or in section 4206(a) of the Balanced
Budget Act of 1997 (42 U.S.C. 1395l note),
shall be construed as preventing a home health
agency receiving payment under this section
from furnishing a home health service via a
telecommunications system. Each home health
agency that submits a cost report to the Sec-
retary under this section shall include, in such
cost report, data with respect to the costs in-
curred in furnishing home health services to
medicare beneficiaries via such telecommuni-
cations systems.
‘‘(B) LIMITATION.—The Secretary shall
not consider a home health service provided in
the manner described in subparagraph (A) to
be a home health visit for purposes of—
‘‘(i) determining the amount of pay-
ment to be made under this section; or
‘‘(ii) any requirement relating to the
certification of a physician required under
section 1814(a)(2)(C).’’.
(b) REPORT.—Not later than one year after the date
of the enactment of this Act, the Secretary of Health and
Human Services shall submit to Congress a report con-
taining the recommendations of the Secretary with respect
to the feasibility and advisability of including home health
services furnished by telecommunications systems as a
home health service for purposes of—
(1) payment for such services under section
1895 of the Social Security Act (42 U.S.C. 1395fff),
and
(2) requirements with respect to physician cer-
tification of the need for home health services under
section 1814(a)(2)(C) of such Act (42 U.S.C.
1395f(a)(2)(C)).
Æ