ing periods beginning on or after July 1, 1996, and
before July 1, 1997, and’’; and
(C) by adding at the end the following:
‘‘(V) July 1, 2000, 112 percent of the mean of
the labor-related and nonlabor per visit costs for
freestanding home health agencies.’’.
(2) ESTABLISHING A 3-YEAR FREEZE ON COST
LIMITS.—Section 1861(v)(1)(L)(iii) of such Act (42
U.S.C. 1395x(v)(1)(L)(iii)) (as amended by section
4602 of the Balanced Budget Act of 1997) is
amended by striking ‘‘October 1, 1997’’ and insert-
ing ‘‘July 1, 2000’’.
SEC. 3. STRENGTHENING MEDICARE OVERSIGHT OF HOME
HEALTH SERVICES EXPENDITURES.
(a) IN GENERAL.—Section 4614 of the Balanced
Budget Act of 1997 is amended by redesignating sub-
section (c) as subsection (d) and inserting after subsection
(b) the following:
‘‘(c) PROCEDURES TO ELIMINATE INAPPROPRIATE
UTILIZATION OF HOME HEALTH SERVICES.—
‘‘(1) IN GENERAL.—The Secretary of Health
and Human Services shall establish a process for
eliminating inappropriate utilization of home health
services by reviewing claims for reimbursement of
such services furnished under the medicare program
under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) in which the number of home
health visits provided to a beneficiary in a year ex-
ceeds the regional average of per beneficiary annual
visits.
‘‘(2) REFERRAL TO INSPECTOR GENERAL.—If
the Secretary of Health and Human Services deter-
mines appropriate, the Secretary shall—
‘‘(A) issue a determination denying pay-
ment for a claim described in paragraph (1);
and
‘‘(B) refer the name of the provider that
submitted such claim to the Office of Inspector
General of the Department of Health and
Human Services for investigation.
‘‘(3) 
APPLICATION.—This 
subsection 
shall
apply to claims for reimbursement submitted after
the process described in paragraph (1) is estab-
lished.’’.
(b) REPORTS TO CONGRESS.—Section 4616(b) of the
Balanced Budget Act of 1997 (42 U.S.C 1395y note) is
amended by adding at the end the following: ‘‘The Sec-
retary shall include in each of the reports for fiscal years
1999 through 2002 recommendations regarding changes
to the method of payment, claims review, and scope of
benefits that the Secretary determines is necessary to
achieve actual outlays under such parts for such services
during the following fiscal year that are equal to the esti-
mated outlays under subsection (a) for such year.’’.
SEC. 4. MODIFICATION OF CALCULATION OF PAYMENT
AMOUNT 
FOR 
HOME 
HEALTH 
SERVICES
UNDER THE PROSPECTIVE PAYMENT SYS-
TEM.
(a) ESTABLISHMENT
OF EQUITABLE LIMITS
FOR
CALCULATING PROSPECTIVE PAYMENT RATES.—
(1) IN GENERAL.—Section 1895(b)(3)(A)(i) of
the 
Social 
Security 
Act 
(42 
U.S.C.
1395fff(b)(3)(A)(i)) (as added by section 4603 of
the Balanced Budget Act of 1997) is amended by in-
serting ‘‘the greater of $21,200,000,000 or’’ after
‘‘equal to’’.
(2) CONTINGENCY.—Section 4603(e) of the
Balanced Budget Act of 1997 (42 U.S.C. 1395fff
note) is amended—
(A) by striking ‘‘If ’’ and inserting the fol-
lowing:
‘‘(1) IN GENERAL.—If ’’;
(B) in paragraph (1) (as redesignated by
subparagraph (A)), by striking ‘‘provide for a
reduction by 15 percent’’ and all that follows
and inserting the following: ‘‘provide—
‘‘(A) for such cost reporting periods that
begin before October 1, 2002, for an adjust-
ment to the cost limits described in section
1861(v)(1)(L) of such Act so that the total
amounts payable for such services in a fiscal
year is equal to the greater of—
‘‘(i) the applicable amount (as defined
in paragraph (2); or
‘‘(ii) the total amount of payments for
such services that would have been made
in such fiscal year if such cost limits (as
those limits would otherwise be in effect on
September 30, 1999) had been reduced by
15 percent; and
‘‘(B) for such cost reporting periods that
begin on or after October 1, 2002, for a reduc-
tion by 15 percent in such cost limits (as so in
effect).’’; and
(C) by adding at the end the following:
‘‘(2) APPLICABLE AMOUNT DEFINED.—In para-
graph (1), the term ‘applicable amount’ means the
following amount:
‘‘(A) 
For 
fiscal 
year 
2000,
$21,200,000,000.
‘‘(B) 
For 
fiscal 
year 
2001,
$23,300,000,000.
‘‘(C) 
For 
fiscal 
year 
2002,
$25,200,000,000.’’.
(b) TEMPORARY RESTORATION
OF PERIODIC IN-
TERIM PAYMENT FOR HOME HEALTH SERVICES.—Sec-
tion 1815(e)(2) of the Social Security Act (42 U.S.C.
1395g(e)(2)) (as amended by section 4603(b) of the Bal-
anced Budget Act of 1997) is amended—
(1) in subparagraph (C), by striking ‘‘and’’ at
the end;
(2) by redesignating subparagraph (D) as sub-
paragraph (E); and
(3) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) home health services until the end of the
12-month period following the date that the prospec-
tive payment system for such services is imple-
mented pursuant to section 1895; and’’.