[Federal Register Volume 63, Number 1 (Friday, January 2, 1998)]
[Notices]
[Pages 89-105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-34221]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[HCFA-1904-NC]
RIN 0938-AI24


Medicare Program; Schedule of Limits on Home Health Agency Costs 
Per Visit for Cost Reporting Periods Beginning on or After October 1, 
1997

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice with comment period.

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SUMMARY: This notice sets forth a revised schedule of limits on home 
health agency costs that may be paid under the Medicare program for 
cost reporting periods beginning on or after October 1, 1997. These 
limits replace the per visit limits that were set forth in our July 1, 
1996 notice with comment period (61 FR 34344) and supersede those set 
forth in our July 1, 1997 notice with comment period (62 FR 35608). 
This notice also provides, in accordance with the Balanced Budget Act 
of 1997, that there be no changes in the home health per visit limits 
for cost reporting periods beginning on or after July 1, 1997 and 
before October 1, 1997 (that is, the cost limits set forth in our July 
1, 1996 notice will apply to cost reporting

[[Page 90]]

periods beginning during this time period); that the establishment of 
the cost per visit limitations for cost reporting periods beginning on 
or after October 1, 1997 be based on 105 percent of the median of the 
labor-related and nonlabor per visit costs for freestanding home health 
agencies; that there be no updates in the home health costs limits 
(including no adjustments for changes in the wage index or other 
updates) for cost reporting periods beginning on or after July 1, 1994 
and before July 1, 1996; and the wage index value that is applied to 
the labor portion of the per visit limitations be based on the 
geographic area in which the home health service is furnished.

DATES: Effective Date: This is a major rule under title 5, United 
States Code, section 804(2). As indicated in section XI.A. of the 
preamble of this notice with comment period, pursuant to 5 U.S.C. 
553(b)(B), for good cause we find that prior notice and comment 
procedures are impracticable and unnecessary. Pursuant to 5 U.S.C. 
section 808(2), as well as section 1861(v)(1)(L)(i) of the Social 
Security Act (as amended by section 4602(a)(5) of Pub. L. 105-33), this 
schedule of limits is effective for cost reporting periods beginning on 
or after October 1, 1997.
    Comment Period: Written comments will be considered if we receive 
them at the appropriate addresses, as provided below, no later than 5 
p.m. on March 3, 1998.

ADDRESSES: Mail written comments (one original and three copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: HCFA-1904-NC, P.O. Box 7517, 
Baltimore, Maryland 21207-0517
    If you prefer, you may deliver your written comments (one original 
and three copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW, 
Washington, DC 20201,
    or
Room C5-09-26, Central Building, 7500 Security Boulevard, Baltimore, 
Maryland 21244-1850.

    Comments may also be submitted electronically to the following e-
mail address: [email protected]. E-mail comments must include the 
full name, postal address, and affiliation (if applicable) of the 
sender and must be submitted to the referenced address in order to be 
considered. All comments must be incorporated in the e-mail message 
because we may not be able to access attachments.
    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code HCFA-1904-NC. Comments received timely will be available 
for public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 309-G of 
the Department's offices at 200 Independence Avenue, SW, Washington, 
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. 
(Phone: (202) 690-7890).
    Copies: To order copies of the Federal Register containing this 
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password required).

FOR FURTHER INFORMATION CONTACT: Michael Bussacca, (410) 786-4602.

SUPPLEMENTARY INFORMATION:

I. Background

A. Summary

    Section 1861(v)(1)(A) of the Social Security Act (the Act) 
authorizes the Secretary to establish limits on allowable costs 
incurred by a provider of services that may be paid under the Medicare 
program, based on estimates of the costs necessary in the efficient 
delivery of needed health services. Under this authority, we have 
maintained limits on home health agency (HHA) per-visit costs since 
1979. The limits may be applied to direct or indirect overall costs or 
to the costs incurred for specific items or services furnished by the 
provider. Implementing regulations are located at 42 CFR 413.30. 
Additional statutory provisions specifically governing the limits 
applicable to HHAs are contained at section 1861(v)(1)(L) of the Act. 
Section 1861(v)(1)(L)(i) of the Act, as amended by section 4602(a) of 
the Balanced Budget Act of 1997 (BBA '97), Pub. L. 105-33, specifies 
that the cost limits must not exceed 105 percent of the median of the 
labor-related and nonlabor per-visit costs for freestanding HHAs. 
Section 1861(v)(1)(L)(vii) of the Act, as added by section 4602(c) of 
BBA '97, requires that the Secretary establish HHA cost limits on an 
annual basis for cost reporting periods beginning on or after October 1 
of each year beginning in 1998, (except the cost limits established for 
cost reporting periods beginning on or after October 1, 1997 must be 
established by January 1, 1998). In establishing these limits, the 
statute directs the Secretary to use the applicable hospital wage 
index, as discussed below.
    This notice with comment period sets forth revised cost limits for 
cost reporting periods beginning on or after October 1, 1997. As 
required by section 1861(v)(1)(L)(iii) of the Act, we are using the 
area wage index applicable under section 1886(d)(3)(E) of the Act which 
were determined using the survey of the most recent available wages and 
wage-related costs of hospitals located in the geographic area in which 
the home health service is furnished. For purposes of this notice, the 
HHA wage index is based on the most recent hospital wage index, that 
is, the prereclassified hospital wage index effective for hospital 
discharges on or after October 1, 1997, which uses Federal fiscal year 
(FY) 1994 wage data. As the statute also specifies, in applying the 
hospital wage index to HHAs, no adjustments are to be made to account 
for hospital reclassifications under section 1886(d)(8)(B) of the Act, 
decisions of the Medicare Geographic Classification Review Board 
(MGCRB) under section 1886(d)(10) of the Act, or decisions by the 
Secretary.

B. Relevant Provisions of the Balanced Budget Act of 1997

    The BBA '97 made major changes that affect the cost per visit 
limitations applicable to services provided by HHAs. The provisions of 
Pub. L. 105-

[[Page 91]]

33 that we are implementing in this notice with comment period are as 
follows:
1. Delay in Updates
    Section 4602(b) of BBA '97 amended section 1861(v)(1)(L)(iii) of 
the Act to provide that there be no changes in the home health per 
visit cost limits for cost reporting periods beginning on or after July 
1, 1997 and before October 1, 1997. The effect of this provision is 
that a HHA's latest per-visit cost limit for a cost reporting period 
beginning on or after July 1, 1996 and before October 1, 1996, as 
calculated under the notice published July 1, 1996 (61 FR 34344), will 
remain in effect until its cost reporting period beginning on or after 
October 1, 1997. For providers entering the Medicare program on or 
after July 1, 1997 and before October 1, 1997, the applicable cost 
limit will be the cost limit that would have applied for the identical 
cost reporting period beginning on or after July 1, 1996 and before 
October 1, 1996. (For example, if a provider enters the Medicare 
program on July 1, 1997, with a 12-month cost reporting period, its 
cost limit will be determined in the same manner as a cost limit for a 
period beginning July 1, 1996 and ending June 30, 1997. If the provider 
entering the Medicare program has a short cost reporting period, for 
example, a period beginning July 1, 1997 and ending December 31, 1997, 
the cost limit will be determined in the same manner as a cost limit 
for a period beginning July 1, 1996, and ending December 31, 1996.) 
Therefore, the notice of schedule of limits on HHA costs per visit for 
cost reporting periods beginning on or after July 1, 1997, which was 
published in the Federal Register (62 FR 35608) on July 1, 1997 has 
been superseded by the change in the statute.
    The notice of schedule of limits on HHA costs per visit, which was 
published in the Federal Register on July 1, 1997 (62 FR 35608) also 
contained comments and responses to the notice of schedule of limits 
published in the Federal Register on July 1, 1996 (61 FR 34344). The 
comments and responses in the July 1, 1997 Federal Register (62 FR 
35609 through 35611) are not repeated in this notice. Even though the 
cost limitations in the July 1, 1997 Federal Register have been 
superseded by Pub. L. 105-33, the responses to the comments to the July 
1, 1996 notice are still relevant and effective.
2. Reduction to limits
    Section 1861(v)(1)(L)(i)(IV) was added to the Act by section 
4602(a)(5) of the BBA '97 and requires the establishment of the cost 
per visit limitations based on 105 percent of the median of labor-
related and nonlabor-related per visit costs for freestanding HHAs. 
This is a change to the previous requirement that the cost limitations 
be established based on 112 percent of the mean of the labor-related 
and nonlabor per visit cost for freestanding HHAs.
    The impact of this change will be discussed in general in the 
impact statement in section XI of this notice with comment period.
3. Reduction in Market Basket Updates
    Section 1861(v)(1)(L)(iv) was added to the Act by section 4601(a) 
of BBA 97 and requires the Secretary not to take into account any 
changes in the home health market basket with respect to cost reporting 
periods which began on or after July 1, 1994 and before July 1, 1996 in 
establishing the limitations for cost reporting periods beginning after 
September 30, 1997. This, in effect, reduces the factors for increasing 
the database dollars used in calculating the limits. How these factors 
are determined is explained further in section VII of this notice with 
comment period.
4. Application of per Visit Limitation
    Section 1861(v)(1)(L)(iii) was amended by section 4604(b) of BBA 
'97 to require that the utilization of the area wage index applicable 
under section 1886(d)(3)(E) of the Act be determined using the survey 
of the most recent available wages and wage-related costs of hospitals 
located in the geographic area in which the home health services are 
furnished. Previously, the survey was from hospitals located in the 
geographic area in which the home health agency is located, and applied 
to cost limitations for cost reporting periods beginning prior to 
October 1, 1997. In effect, the cost per visit limitation that will 
apply for the service furnished by the HHA will be the urban or rural 
limit and the appropriate wage index for the geographic area where the 
home health service is furnished. A Program Memorandum (Rev. AB-97-18), 
which was published in September 1997, outlined the billing changes 
that are needed to properly implement this provision.
5. Effective Date
    Section 1861(v)(1)(L)(vii) of the Act was added by section 4602(c) 
of BBA '97. Beginning in 1998, the Secretary is required to establish 
the per-visit limits by August 1 of each year. However, for cost 
reporting periods beginning on or after October 1, 1997, the Secretary 
need only establish those limits by January 1, 1998. In accordance with 
section 1861(v)(1)(L)(vii)(I), we are establishing by January 1, 1998, 
the per-visit limits for cost reporting periods beginning on or after 
October 1, 1997.

II. Updating the Wage Index on a Budget-Neutral Basis

    Section 4207(d)(2) of the Omnibus Budget Reconciliation Act of 
1990, Pub. L. 101-508, requires that in updating the wage index, 
aggregate payments to HHAs should be equal to the amount that would 
result from use of the 1982 wage index. On July 1, 1997, we published 
the appropriate adjustment factor to comply with this requirement to 
ensure that payments were not affected by the hospital wage index 
published on August 30, 1996.
    As stated before, BBA '97 was passed and included legislation that 
affected the cost per-visit limitations. The effect of the changes in 
the cost limit calculations (reducing per visit limits from 112% of the 
mean to 105% of the median and freezing market basket updates) impacts 
the level of payments and, therefore, affects the budget neutrality 
factor. To determine the new adjustment factor, we used the same 
methodology as explained in the July 1, 1997 Federal Register, page 
35611, using the cost limits specified in this notice. As has been the 
case with each of the new wage indices used in calculating home health 
limits since the requirement of budget neutrality was established, 
agencies would have received a higher adjusted cost limitation in the 
aggregate. Aggregate payments to HHAs can only be affected to the 
extent that agencies have costs exceeding the limits. When only a small 
portion of total costs exceed the limits, the adjustment is effectively 
spread over agencies, and the labor portion of the limits needs to be 
increased by a large factor to reach the amount by which agencies, in 
the aggregate, would have benefited using the 1982 wage index. It 
follows that as the portion of costs exceeding the limits becomes 
larger, the adjustment factor becomes smaller. Because the new cost 
limits are lower, more providers are affected by the limits. Under the 
old cost limit, 31% of home health agencies were over the limit, as 
compared to 65% of home health agencies over the new cost limit. In 
order to achieve the level of savings that would have occurred if the 
1982 wage index was used, less of an increase is necessary to raise the 
limits to achieve budget neutrality. We used the same methodology as 
contained in the Federal Register published July 1, 1997 and determined 
the new budget neutrality factor to be 1.009.

[[Page 92]]

III. Update of Limits

    The cost report data used to develop the schedule of limits set 
forth in this notice is for the same period as that used in setting the 
limits that were effective July 1, 1996. We have updated the cost 
limits to reflect the expected cost increases occurring between the 
cost reporting periods for the data contained in the database and 
September 30, 1998 (excluding, as required by statute, any changes in 
the home health market basket for cost reporting periods beginning on 
or after July 1, 1994 and before July 1, 1996).

A. Data Used

    To develop the schedule of limits that is effective for cost 
reporting periods beginning on or after October 1, 1997, we extracted 
actual cost per-visit data from settled Medicare cost reports of 
freestanding HHAs for periods ending on or after June 30, 1991, and 
settled by October 1, 1995. The majority of the cost reports were from 
FY 1993. We then adjusted the data using the latest available market 
basket indexes to reflect expected cost increases occurring between the 
cost reporting periods contained in our database and September 30, 
1998. However, section 1861(v)(1)(L)(iv) prohibits the Secretary from 
taking into account any changes in the home health market basket with 
respect to cost reporting periods which began on or after July 1, 1994 
and before July 1, 1996. Therefore, we excluded this time period when 
we adjusted the database for the market basket increases.

B. Wage Index

    The wage index is used to adjust the labor-related portion of the 
limits to reflect differing wage levels among areas. In setting this 
schedule of limits, we used the FY 1998 hospital wage index, which is 
based on 1994 hospital wage data.
    Each HHA's labor market area is determined based on the definitions 
of Metropolitan Statistical Areas (MSAs) issued by the Office of 
Management and Budget (OMB). Section 1861(v)(1)(L)(iii) of the Act 
requires us to use the current hospital wage index (that is, the FY 
1998 hospital wage index, which was published in the Federal Register 
on August 29, 1997 (62 FR 46070)) to establish the HHA cost limits. 
Therefore, this schedule of limits reflects the MSA definitions that 
are currently in effect under the hospital prospective payment system.
    We are continuing to incorporate exceptions to the MSA 
classification system for certain New England counties that were 
identified in the July 1, 1992 notice (57 FR 29410). These exceptions 
have been recognized in setting hospital cost limits for cost reporting 
periods beginning on and after July 1, 1979 (45 FR 41218), and were 
authorized under section 601(g) of the Social Security Amendments of 
1983 (Pub. L. 98-21). Section 601(g) of Public Law 98-21 requires that 
any hospital in New England that was classified as being in an urban 
area under the classification system in effect in 1979 will be 
considered urban for the purposes of the hospital prospective payment 
system. This provision is intended to ensure equitable treatment under 
the hospital prospective payment system. Under this authority, the 
following counties have been deemed to be urban areas for purposes of 
payment under the inpatient hospital prospective payment system:
     Litchfield County, CT in the Hartford, CT MSA.
     York County, ME and Sagadahoc County, ME in the Portland, 
ME MSA.
     Merrimack County, NH in the Boston-Brockton-Nashua, MA-NH 
MSA.
     Newport County, RI in the Providence-Warwick-Pawtucket, RI 
MSA.
    We are continuing to grant these urban exceptions for the purpose 
of applying the Medicare hospital wage index to the HHA cost limits. 
These exceptions result in the same New England County Metropolitan 
Area (NECMA) definitions for hospitals, skilled nursing facilities 
(SNFs), and HHAs. In New England, MSAs are defined on town boundaries 
rather than on county lines but exclude parts of the four counties 
cited above that would be considered urban under the MSA definition. 
Under this notice, those four counties are urban under either 
definition, NECMA or MSA.
    Section 1861(v)(1)(L)(iii), as amended by section 4604(b) of BBA 
'97, requires us to establish these limits using the area wage index 
applicable under section 1886(d)(3)(E) of the Act and determined using 
the survey of the most recent available wages and wage-related costs of 
hospitals located in the geographic area in which the home health 
service is furnished. Prior to the amendment, the wage index as applied 
to the labor portion of the per visit limitation was based on the 
location of the HHA. Effective with cost reporting periods beginning on 
or after October 1, 1997, the wage-index as applied to the labor 
portion of the per visit limitation must be based on the geographic 
location in which the home health service is actually furnished rather 
than the physical location of the HHA itself. Therefore, in 
establishing the limits for the HHAs, we will apply the wage index 
based upon the location of where the service is furnished. See 
discussion in section VII.

IV. Provisions of the HHA Schedule of Limits

    The schedule of limits set forth below was calculated using 105 
percent of the median per-visit costs of freestanding HHAs and is 
adjusted by the latest estimates in the market basket index, excluding 
any changes in the home health market basket for cost reporting periods 
beginning on or after July 1, 1994 and before July 1, 1996.
    The schedule of limits effective for cost reporting periods 
beginning on or after October 1, 1997, is based on the actual cost per-
visit data from settled Medicare cost reports from freestanding HHAs 
for periods ending on or after June 30, 1991, and settled by October 1, 
1995, updated by the market basket rate of increase, excluding any 
changes in the home health market basket with respect to cost reporting 
periods that began on or after July 1, 1994 and before July 1, 1996, 
and provides for the following:
     A classification system based on whether an HHAs services 
are furnished within an MSA, a NECMA, and/or a non-MSA area. (See 
Tables 4a and 4b in section IX. of this notice for the listing of MSAs, 
NECMAs, and rural areas.)
     The use of a single schedule of limits for hospital-based 
and freestanding agencies. This single limit is based on the cost 
experience of freestanding agencies in accordance with section 
1861(v)(1)(L)(i) of the Act.
     The use of a market basket index, which was developed from 
the price of goods and services purchased by HHAs to account for the 
impact of changing wage and price levels on HHA costs.
     The current hospital wage index that is used to adjust the 
labor-related portion of the limits. The employee wage portion of the 
market basket index, including a proportionate share of contract 
services (64.226 percent), and the employee benefits portion (13.442 
percent) are used to determine the labor component (77.668 percent) of 
all HHA per-visit costs used to set the limits.
     Separate treatment of the labor and nonlabor components of 
per-visit costs. The separate components of costs are calculated by 
obtaining actual HHA cost data for each agency for cost periods ending 
on or after June 30, 1991 and settled before October 1, 1995, and 
increasing those data by the actual and projected increases in the HHA 
market basket index excluding any changes in the home health market 
basket with respect to cost reporting periods that

[[Page 93]]

began on or after, July 1, 1994 and before July 1, 1996. We then 
separated each HHA's per-visit costs into labor and nonlabor portions, 
and divided the labor portion by the wage index value for the agency's 
location to control for the effect of geographic variations in 
prevailing wage levels. Separate means are computed for the labor and 
nonlabor components of per-visit costs. For each comparison group, the 
resulting amounts are shown in Table 3 of section VIII of this notice.
     The application of a cost-of-living adjustment to the 
nonlabor portion of the limit for HHAs located in Alaska, Hawaii, 
Puerto Rico, and the U.S. Virgin Islands.
     Limits are determined for the per-visit cost of each type 
of home health service: skilled nursing care, physical therapy, speech 
pathology, occupational therapy, medical social services, and home 
health aide.
     Application of the limits in the aggregate after an HHA's 
actual costs are adjusted. An HHA's actual costs are adjusted for 
individual items of cost that are found to be excessive under Medicare 
principles of provider payment and for costs that are not included in 
the limitation amount. The limits are applied in the aggregate to the 
cost remaining after these adjustments are made. Payment is limited to 
the lesser of the actual costs, the cost aggregated limits, or the per 
beneficiary limitation. The per-beneficiary limitation must be 
established by April 1, 1998, under section 1861(v)(1)(L)(vii), as 
added by section 4602(c) of BBA '97 and will be effective for cost 
reporting periods beginning October 1, 1997.

V. Market Basket

    The 1993-based cost categories and weights are listed in Table 1 
below.

    Table 1.--1993-Based Cost Categories, Weights, and Price Proxies    
------------------------------------------------------------------------
                                    1993-based                          
                                      market                            
          Cost category               basket           Price proxy      
                                      weight                            
------------------------------------------------------------------------
Compensation, including allocated       77.668                          
 Contract Services' Labor.                                              
    Wages and Salaries, including       64.226  HHA Occupational Wage   
     allocated Contract Services'                Index.                 
     Labor.                                                             
    Employee benefits, including        13.442  HHA Occupational        
     allocated Contract Services'                Benefits Index.        
     Labor.                                                             
Operations & Maintenance.........        0.832  CPI-U Fuel & Other      
                                                 Utilities.             
Administrative & General,                9.569                          
 including allocated Contract                                           
 Services' Non-Labor.                                                   
    Telephone....................        0.725  CPI-U Telephone.        
    Paper & Printing.............        0.529  CPI-U Household Paper,  
                                                 Paper Products &       
                                                 Stationery Supplies.   
    Postage......................        0.724  CPI-U Postage.          
    Other Administrative &               7.591  CPI-Services.           
     General, including allocated                                       
     Contract Services Non-Labor.                                       
Transportation...................        3.405  CPI-U Private           
                                                 Transportation.        
Capital-Related..................        3.204                          
    Insurance....................        0.560  CPI-U Household         
                                                 Insurance.             
    Fixed Capital................        1.764  CPI-U Owner's Equivalent
                                                 Rent.                  
    Movable Capital..............        0.880  PPI Machinery &         
                                                 Equipment.             
Other Expenses, including                5.322  CPI-U All Items Less    
 allocated Contract Services' Non-               Food & Energy.         
 Labor.                                                                 
                                  -------------                         
      Total......................      100.000                          
------------------------------------------------------------------------

VI. Methodology for Determining Cost-Per-Visit Limits

A. Data

    For this notice, the cost-per-visit limit values were determined by 
extracting settled actual cost-per-visit data from Medicare cost 
reports for cost reporting periods ending on or after June 30, 1991, 
and settled before October 1, 1995. We then adjusted the data using the 
latest available market basket factors to reflect expected cost 
increases occurring between the cost reporting periods contained in our 
database and September 30, 1998 excluding any changes in the home 
health market basket with respect to cost reporting periods which began 
on or after, July 1, 1994 and before July 1, 1996. The following 
adjustment factors were used to compute the per-visit costs:

 Table 2.--Factors for Inflating Database Dollars to September 30, 1998 
                     [Inflation Adjustment Factors1]                    
------------------------------------------------------------------------
            Fiscal year end                 1992       1993       1994  
------------------------------------------------------------------------
January 31.............................  .........    1.11250    1.07813
February 28............................  .........    1.10947    1.07550
March 31...............................  .........    1.10642    1.07295
April 30...............................  .........    1.10336    1.07046
May 31.................................  .........    1.10033    1.06800
June 30................................    1.13438    1.09737    1.06565
July 31................................    1.13111    1.09450    1.06354
August 31..............................    1.12791    1.09168    1.06165
September 30...........................    1.12476    1.08891    1.05993
October 31.............................    1.12166    1.08619    1.05838
November 30............................    1.11859    1.08349    1.05706

[[Page 94]]

                                                                        
December 31............................    1.11554    1.08080   1.05599 
------------------------------------------------------------------------
\1\ Source: The Home Health Agency Input Price Index, produced by HCFA. 
  The forecasts are from Standard and Poor's DRI 3rd QTR 1997; @USSIM/  
  TREND25YR0897@CISSIM/Control973 forecast exercise which has historical
  data through 1997:2.                                                  

    Multiplying nominal dollars for a given fiscal year end by their 
respective inflation adjustment factor will express those dollars in 
the dollar levels for the fiscal year ending September 30, 1998.
    The procedure followed to develop these revised tables, based on 
requirements from the BBA '97, was to hold the June 1994 level for 
input price index constant through June 1996. From July 1996 forward, 
we trended the revised index forward using the percentage gain each 
month from the HCFA Home Health Agency Input Price Index. Thus the 
monthly trend of the revised index is the same as that of the HCFA 
market basket for the period from July 1996 forward.

B. Cost Reporting Periods Consisting of Fewer Than 12 Months

    HHAs may have cost reporting periods that are less than 12 months 
in length. This may happen, for example, when a new provider enters the 
Medicare program after its selected fiscal year has already begun, or 
when a provider experiences a change of ownership before the end of the 
cost reporting period. As explained in section IV. of this preamble, 
the data used in calculating the cost limits were updated to September 
30, 1998. Therefore, the cost limits published in this notice are for a 
12-month cost reporting period beginning October 1, 1997 and ending 
September 30, 1998. For 12-month cost reporting periods beginning after 
October 1, 1997 and before October 1, 1998, cost reporting year 
adjustment factors are provided in Table 5. However, when a cost 
reporting period consists of fewer than 12 months, adjustments must be 
made to the data that have been developed for use with 12-month cost 
reporting periods. To promote the efficient dissemination of cost 
limits to providers with cost reporting periods of fewer than 12 
months, we are publishing the following examples and tables to enable 
intermediaries to calculate the applicable adjustment factors.
    Cost reporting periods of fewer than 12 months may not necessarily 
begin on the first of the month or end on the last day of the month. In 
order to simplify the process in calculating ``short period'' 
adjustment factors, if the short cost reporting period begins before 
the sixteenth of the month, we will consider the period to have begun 
on the first of that month. If the start period begins on or after the 
sixteenth of the month, it will be considered to have begun at the 
beginning of the next month. Also, if the short period ends before the 
sixteenth of the month, we will consider the period to have ended at 
the end of the preceding month; if the short period ends on or after 
the sixteenth of the month, it will be considered to have ended at the 
end of that month.

Examples:

    1. After approval by its intermediary, an HHA changes its fiscal 
year end from June 30 to December 31. Therefore, the HHA had a short 
cost reporting period beginning on July 1, 1998 and ending on 
December 31, 1998. The cost limits that apply to this short period 
must be adjusted as follows:

Step 1--From Table 6, sum the index levels for the months of July 
1998 through December 1998: 6.63687.
Step 2--Divide the results from Step 1 by the number of months in 
the short period.
    6.636876=1.106145
Step 3--From Table 6, sum the index levels for the months in the 
common period of October 1997 through September 1998.
    13.06926
Step 4--Divide the results in Step 3 by the number of months in the 
common period.
    13.0692612=1.089105
Step 5--Divide the results from Step 2 by the results from Step 4. 
This is the adjustment factor to be applied to the published limits.
    1.1061451.089105=1.015646
Step 6--Apply the results from Step 5 to the published cost limits.
    a. Urban Skilled Nursing Labor Portion, $67.91 x 1.015646=$68.97
    b. Urban Skilled Nursing Nonlabor Portion, 
$19.18 x 1.015646=$19.48

    2. An HHA with a fiscal year end of November 30, 1998 changes 
ownership on September 21, 1998. The HHA is required to file a 
terminated cost report for the period of December 1, 1997 to 
September 21, 1998. The cost limits that apply to this short period 
must be adjusted as follows:

Step 1--From Table 6, sum the index level for the month of December 
1997 through September 1998.
    10.91945
Step 2--Divide the results from Step 1 by the number of months in 
the short period.
    10.9194510=1.091945
Step 3--From Table 6, sum the index levels for the months in the 
common period of October 1997, through September 1998.
    13.06926
Step 4--Divide the results from Step 3 by the number of months in 
the common period.
    13.0692612=1.089105
Step 5--Divide the results from Step 2 by the results from Step 4.
    1.0919451.089105=1.002608
Step 6--Apply the results from Step 5 to the published cost limits.
    a. Urban Skilled Nursing Labor Portion, $67.91 x 1.002608=$68.09
    b. Urban Skilled Nursing Non-Labor Portion, 
$19.18 x 1.002608=$19.23

C. Standardization for Wage Levels

    After adjustment by the market basket index, we divided each HHA's 
per-visit costs into labor and nonlabor portions. The labor portion of 
costs (77.668 percent as determined by the market basket) represents 
the employee wage and benefit factor plus the contract services factor 
from the market basket. We then divided the labor portion of per-visit 
costs by the wage index applicable to the HHA's location to arrive at 
an adjusted labor cost.

D. Adjustment for ``Outliers''

    We transformed all per-visit cost data into their natural 
logarithms and grouped them by type of service and MSA, NECMA, or non-
MSA location, in order to determine the median cost and standard 
deviation for each group. We then eliminated all ``outlier'' costs 
which were all per-visit costs under 10 dollars and per visit costs 
over 800 dollars, retaining only those per-visit costs within two 
standard deviations of the median in each service.

E. Basic Service Limit

    We calculate a basic service limit equal to 105 percent of the 
median labor and nonlabor portions of the per-visit costs of 
freestanding HHAs for each type of service. (See Table 3 in section 
IX.)

VII. Computing the Adjusted Limit

A. Adjustment of Cost Limits by Wage Index

    To arrive at the adjusted limit, which is to be applied to each 
service furnished by an HHA based on where the service is furnished, 
the HHA's

[[Page 95]]

intermediary first determines the adjusted labor-related component by 
multiplying the labor-related component of the limit by the appropriate 
wage index and by multiplying the adjusted labor-related component by 
the special labor adjustment for budget neutrality. (See example below 
and Tables 4a and 4b in section VIII. of this notice.) The sum of the 
nonlabor component plus the labor-related component is the adjusted 
limit applicable to the service furnished by the HHA.

Example--Calculation of Adjusted Occupational Therapy Limit for an 
Occupational Therapy Service Furnished in Dallas, TX by a Freestanding 
HHA

Labor component (Table 3)...................................    $73.20  
Wage index value (Table 4a).................................      0.9703
Labor portion...............................................    $71.03  
Special labor adjustment for budget neutrality..............      1.009 
Adjusted labor portion......................................    $71.67  
Nonlabor component (Table 3)................................    $21.00  
Adjusted occupational therapy limit.........................    $92.67  
                                                                        

B. Adjustment for Reporting Year

    If an HHA has a 12-month cost reporting period beginning on or 
after November 1, 1997, the adjusted per-visit limit for each service 
is again revised by an adjustment factor from Table 5 that corresponds 
to the month and year in which the cost reporting period begins. Each 
factor represents the compounded rate of monthly increase derived from 
the projected annual increase in the market basket index, and is used 
to account for inflation in costs that will occur after the date on 
which the limits become effective.
    For example, if the HHA in the example above had a cost reporting 
period beginning January 1, 1998, its per-visit therapy limit would be 
further adjusted as follows:

          Computation of Revised Limit for Occupational Therapy         
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Adjusted per-visit limit.................................   $92.67      
Adjustment factor from Table 5...........................     1.00781   
Revised per-visit limit..................................   $93.39      
------------------------------------------------------------------------

    In this example, the revised adjusted per-visit limit for 
occupational therapy services furnished in Dallas, TX by this HHA for 
the cost reporting period beginning January 1, 1998, is $93.39 per 
visit.
    If an HHA uses a cost reporting period that is not 12 months in 
duration, a special calculation of the adjustment factor must be made. 
This results from the fact that projections are computed to September 
30, 1998. This calculation is done using the methodology described in 
section VII.B.

VIII. Schedule of Limits

    The schedule of limits set forth below applies to cost reporting 
periods beginning on or after October 1, 1997. The intermediaries will 
compute the adjusted limits using the wage index published in Tables 4a 
and 4b of section IX. and will notify each HHA they service of its 
applicable cost per-visit limit for the areas where the HHA furnishes 
each type of service. Each HHA's aggregate limit cannot be determined 
prospectively, but depends on each HHA's Medicare visits for each type 
of service furnished by location of the service for the cost reporting 
periods subject to this notice.
    The HHA costs that are subject to the limits include the cost of 
medical supplies routinely furnished in conjunction with patient care. 
Durable medical equipment, orthotics, prosthetics, and other medical 
supplies directly identifiable as services to an individual patient are 
excluded from the per-visit costs and are paid without regard to this 
schedule of limits. (See Chapter IV of the Home Health Agency Manual 
(HCFA Pub. 11).)
    The intermediary will determine the limit for each HHA by 
multiplying the number of Medicare visits for each type according to 
the location of where the service is furnished by the HHA, by the 
respective per-visit cost limit. The sum of these amounts is compared 
to the HHA's total allowable cost.
    Example: HHA X, a freestanding agency located in Richmond, VA, and 
all its services in the Richmond, VA, MSA furnished 5,000 covered 
skilled nursing visits, 2,000 physical therapy visits, and 4,000 home 
health aide visits to Medicare beneficiaries during its 12-month cost 
reporting period beginning October 1, 1997. The aggregate cost limit 
for the HHA is calculated as follows:

                                      Determining the Aggregate Cost Limit                                      
----------------------------------------------------------------------------------------------------------------
                                                                             Adjusted                           
                 Type of visit                      Visits      Nonlabor      labor       Adjusted    Aggregate 
                                                                portion     portion 1      limit        limit   
----------------------------------------------------------------------------------------------------------------
Skilled nursing................................        5,000       $19.18       $62.71       $81.89     $409,450
Physical therapy...............................        2,000        20.78        67.78        88.56      177,120
Home health aide...............................        4,000         9.35        30.39        39.74      158,960
                                                -------------                                                   
    Total Visits...............................       11,000                                                    
    Aggregate cost limit.......................  ...........  ...........  ...........  ...........    $745,530 
----------------------------------------------------------------------------------------------------------------
\1\ Includes special labor adjustment of 1.009 for budget neutrality.                                           

    Before the limits are applied during settlement of the cost report, 
the HHA's actual costs are reduced by the amount of individual items of 
cost (for example, administrative compensation and contract services) 
that are found to be excessive under the Medicare principles of 
provider payment. That is, the intermediary reviews the various 
reported costs, taking into account all the Medicare payment 
principles; for example, the cost guidelines for physical therapy 
furnished under arrangements (42 CFR 413.106) and the limitation on 
costs that are substantially out of line with those comparable HHAs (42 
CFR 413.9).

           Table 3.--Per Visit Limits For Home Health Agencies          
------------------------------------------------------------------------
                                                   Labor       Nonlabor 
          Type of visit               Limit       portion    portion \1\
------------------------------------------------------------------------
MSA (NECMA) location:                                                   
    Skilled nursing care.........       $87.09       $67.91       $19.18

[[Page 96]]

                                                                        
    Physical therapy.............        94.18        73.40        20.78
    Speech pathology.............        94.57        73.50        21.07
    Occupational therapy.........        94.20        73.20        21.00
    Medical social services......       119.76        93.23        26.53
    Home health aide.............        42.26        32.91         9.35
Non-MSA location:                                                       
    Skilled nursing care.........        97.09        79.25        17.84
    Physical therapy.............       103.81        84.49        19.32
    Speech pathology.............       109.94        89.45        20.49
    Occupational therapy.........       111.00        90.25        20.75
    Medical social services......       149.21       121.56        27.65
    Home health aide.............        42.09        34.34        7.75 
------------------------------------------------------------------------
\1\ Nonlabor portion of limits for HHAs located in Alaska, Hawaii,      
  Puerto Rico, and the Virgin Islands are increased by multiplying them 
  by the following cost-of-living adjustment factors:                   


------------------------------------------------------------------------
                                                              Adjustment
                          Location                              factor  
------------------------------------------------------------------------
Alaska.....................................................        1.150
Hawaii:                                                                 
    County of Honolulu.....................................        1.225
    County of Hawaii.......................................        1.150
    County of Kauai........................................        1.200
    County of Maui.........................................        1.225
    County of Kalawao......................................        1.225
Puerto Rico ...............................................        1.100
Virgin Islands.............................................        1.125
------------------------------------------------------------------------

IX. Wage Indexes

                  Table 4a--Wage index for Urban Areas                  
------------------------------------------------------------------------
                                                                  Wage  
   Urban Area  (Constituent Counties or County Equivalents)       Index 
------------------------------------------------------------------------
0040  Abilene, TX.............................................    0.8287
  Taylor, TX                                                            
0060  Aguadilla, PR...........................................    0.4188
  Aguada, PR                                                            
  Aguadilla, PR                                                         
  Moca, PR                                                              
0080  Akron, OH...............................................    0.9772
  Portage, OH                                                           
  Summit, OH                                                            
0120  Albany, GA..............................................    0.7914
  Dougherty, GA                                                         
  Lee, GA                                                               
0160  Albany-Schenectady-Troy, NY.............................    0.8480
  Albany, NY                                                            
  Montgomery, NY                                                        
  Rensselaer, NY                                                        
  Saratoga, NY                                                          
  Schenectady, NY                                                       
  Schoharie, NY                                                         
0200  Albuquerque, NM.........................................    0.9309
  Bernalillo, NM                                                        
  Sandoval, NM                                                          
  Valencia, NM                                                          
0220  Alexandria, LA..........................................    0.8162
  Rapides, LA                                                           
0240  Allentown-Bethlehem-Easton, PA..........................    1.0086
  Carbon, PA                                                            
  Lehigh, PA                                                            
  Northampton, PA                                                       
0280  Altoona, PA.............................................    0.9137
  Blair, PA                                                             
0320  Amarillo, TX............................................    0.9425
  Potter, TX                                                            
  Randall, TX                                                           
0380  AK Anchorage, AK........................................    1.2842
  Anchorage,                                                            
0440  Ann Arbor, MI...........................................    1.1785
  Lenawee, MI                                                           
  Livingston, MI                                                        
  Washtenaw, MI                                                         
0450  Anniston, AL............................................    0.8266
  Calhoun, AL                                                           
0460  Appleton-Oshkosh-Neenah, WI.............................    0.8996
  Calumet, WI                                                           
  Outagamie, WI                                                         
  Winnebago, WI                                                         
0470  Arecibo, PR.............................................    0.4218
  Arecibo, PR                                                           
  Camuy, PR                                                             
  Hatillo, PR                                                           
0480  Asheville, NC...........................................    0.9072
  Buncombe, NC                                                          
  Madison, NC                                                           
0500  Athens, GA..............................................    0.9087
  Clarke, GA                                                            
  Madison, GA                                                           
  Oconee, GA                                                            
0520  Atlanta, GA.............................................    0.9823
  Barrow, GA                                                            
  Bartow, GA                                                            
  Carroll, GA                                                           
  Cherokee, GA                                                          
  Clayton, GA                                                           
  Cobb, GA                                                              
  Coweta, GA                                                            
  DeKalb, GA                                                            
  Douglas, GA                                                           
  Fayette, GA                                                           
  Forsyth, GA                                                           
  Fulton, GA                                                            
  Gwinnett, GA                                                          
  Henry, GA                                                             
  Newton, GA                                                            
  Paulding, GA                                                          
  Pickens, GA                                                           
  Rockdale, GA                                                          
  Spalding, GA                                                          
  Walton, GA                                                            
0560  Atlantic City-Cape May, NJ..............................    1.1155
  Atlantic City, NJ                                                     
  Cape May, NJ                                                          
0600  Augusta-Aiken, GA-SC....................................    0.9333
  Columbia, GA                                                          
  McDuffie, GA                                                          
  Richmond, GA                                                          
  Aiken, SC                                                             
  Edgefield, SC                                                         
0640  Austin-San Marcos, TX...................................    0.9133
  Bastrop, TX                                                           
  Caldwell, TX                                                          
  Hays, TX                                                              
  Travis, TX                                                            
  Williamson, TX                                                        
0680  Bakersfield, CA.........................................    1.0014
  Kern, CA                                                              
0720  Baltimore, MD...........................................    0.9689

[[Page 97]]

                                                                        
  Anne Arundel, MD                                                      
  Baltimore, MD                                                         
  Baltimore City, MD                                                    
  Carroll, MD                                                           
  Harford, MD                                                           
  Howard, MD                                                            
  Queen Annes, MD                                                       
0733  Bangor, ME..............................................    0.9478
  Penobscot, ME                                                         
0743  Barnstable-Yarmouth, MA.................................    1.4291
  Barnstable, MA                                                        
0760  Baton Rouge, LA.........................................    0.8382
  Ascension, LA                                                         
  East Baton Rouge, LA                                                  
  Livingston, LA                                                        
  West Baton Rouge, LA                                                  
0840  Beaumont-Port Arthur, TX................................    0.8593
  Hardin, TX                                                            
  Jefferson, TX                                                         
  Orange, TX                                                            
0860  Bellingham, WA..........................................    1.1221
  Whatcom, WA                                                           
0870  Benton Harbor, MI.......................................    0.8634
Berrien, MI                                                             
0875  Bergen-Passaic, NJ......................................    1.2156
  Bergen, NJ Passaic, NJ                                                
0880  Billings, MT............................................    0.9783
  Yellowstone, MT                                                       
0920  Biloxi-Gulfport-Pascagoula, MS..........................    0.8415
  Hancock, MS                                                           
  Harrison, MS                                                          
  Jackson, MS                                                           
0960  Binghamton, NY..........................................    0.8914
  Broome, NY                                                            
  Tioga, NY                                                             
1000  Birmingham, AL..........................................    0.9005
  Blount, AL                                                            
  Jefferson, AL                                                         
  St. Clair, AL                                                         
  Shelby, AL                                                            
1010  Bismarck, ND............................................    0.7695
  Burleigh, ND                                                          
  Morton, ND                                                            
1020  Bloomington, IN.........................................    0.9128
  Monroe, IN                                                            
1040  Bloomington-Normal, IL..................................    0.8733
  McLean, IL                                                            
1080  Boise City, ID..........................................    0.8856
  Ada, ID                                                               
  Canyon, ID                                                            
1123  Boston-Worcester Lawrence-Lowell-.......................    1.1506
  Brockton, MA-NH                                                       
  Bristol, MA                                                           
  Essex, MA                                                             
  Middlesex, MA                                                         
  Norfolk, MA                                                           
  Plymouth, MA                                                          
  Suffolk, MA                                                           
  Worcester, MA                                                         
  Hillsborough, NH                                                      
  Merrimack, NH                                                         
  Rockingham, NH                                                        
  Strafford, NH                                                         
1125  Boulder-Longmont, CO....................................    1.0015
  Boulder, CO                                                           
1145  Brazoria, TX............................................    0.9341
  Brazoria, TX                                                          
1150  Bremerton, WA...........................................    1.0999
  Kitsap, WA                                                            
1240  Brownsville-Harlingen-San Benito, TX....................    0.8740
  Cameron, TX                                                           
1260  Bryan-College Station, TX...............................    0.8571
  Brazos, TX                                                            
1280  Buffalo-Niagara Falls, NY...............................    0.9272
  Erie, NY                                                              
  Niagara, NY                                                           
1303  Burlington, VT..........................................    1.0142
  Chittenden, VT                                                        
  Franklin, VT                                                          
  Grand Isle, VT                                                        
1310  Caguas, PR..............................................    0.4459
  Caguas, PR                                                            
  Cayey, PR                                                             
  Cidra, PR                                                             
  Gurabo, PR                                                            
  San Lorenzo, PR                                                       
1320  Canton-Massillon, OH....................................    0.8961
  Carroll, OH                                                           
  Stark, OH                                                             
1350  Casper, WY..............................................    0.9013
  Natrona, WY                                                           
1360  Cedar Rapids, IA........................................    0.8529
  Linn, IA                                                              
1400  Champaign-Urbana, IL....................................    0.8824
  Champaign, IL                                                         
1440  Charleston-North Charleston, SC.........................    0.8807
  Berkeley, SC                                                          
  Charleston, SC                                                        
  Dorchester, SC                                                        
1450  Charleston, WV..........................................    0.9142
  Kanawha, WV                                                           
  Putnam, WV                                                            
1520  Charlotte-Gastonia-Rock Hill, NC-SC.....................    0.9710
  Cabarrus, NC                                                          
  Gaston, NC                                                            
  Lincoln, NC                                                           
  Mecklenburg, NC                                                       
  Rowan, NC                                                             
  Union, NC                                                             
  York, SC                                                              
1540  Charlottesville, VA.....................................    0.9051
  Albemarle, VA                                                         
  Charlottesville City, VA                                              
  Fluvanna, VA                                                          
  Greene, VA                                                            
1560  Chattanooga, TN-GA......................................    0.8658
  Catoosa, GA                                                           
  Dade, GA                                                              
  Walker, GA                                                            
  Hamilton, TN                                                          
  Marion, TN                                                            
1580  Cheyenne, WY............................................    0.7555
  Laramie, WY                                                           
1600  Chicago, IL.............................................    1.0860
  Cook, IL                                                              
  DeKalb, IL                                                            
  DuPage, IL                                                            
  Grundy, IL                                                            
  Kane, IL                                                              
  Kendall, IL                                                           
  Lake, IL                                                              
  McHenry, IL                                                           
  Will, IL                                                              
1620  Chico-Paradise, CA......................................    1.0429
  Butte, CA                                                             
1640  Cincinnati, OH-KY-IN....................................    0.9474
  Dearborn, IN                                                          
  Ohio, IN                                                              
  Boone, KY                                                             
  Campbell, KY                                                          
  Gallatin, KY                                                          
  Grant, KY                                                             
  Kenton, KY                                                            
  Pendleton, KY                                                         
  Brown, OH                                                             
  Clermont, OH                                                          
  Hamilton, OH                                                          
  Warren, OH                                                            
1660  Clarksville-Hopkinsville, TN-KY.........................    0.7852
  Christian, KY                                                         
  Montgomery, TN                                                        
1680  Cleveland-Lorain-Elyria, OH.............................    0.9804
  Ashtabula, OH                                                         
  Cuyahoga, OH                                                          
  Geauga, OH                                                            
  Lake, OH                                                              
  Lorain, OH                                                            
  Medina, OH                                                            
1720  Colorado Springs, CO....................................    0.9316
  El Paso, CO                                                           
1740  Columbia, MO............................................    0.9001
  Boone, MO                                                             
1760  Columbia, SC............................................    0.9192
  Lexington, SC                                                         
  Richland, SC                                                          
1800  Columbus, GA-AL Russell, AL.............................    0.8288
  Chattanoochee, GA                                                     
  Harris, GA                                                            
  Muscogee, GA                                                          
1840  Columbus, OH............................................    0.9793
  Delaware, OH                                                          
  Fairfield, OH                                                         
  Franklin, OH                                                          
  Licking, OH                                                           
  Madison, OH                                                           
  Pickaway, OH                                                          
1880  Corpus Christi, TX......................................    0.8945
  Nueces, TX                                                            
  San Patricio, TX                                                      
1900  Cumberland, MD-WV.......................................    0.8822
  Allegany, MD                                                          
  Mineral, WV                                                           
1920  Dallas, TX..............................................    0.9703
  Collin, TX                                                            
  Dallas, TX                                                            
  Denton, TX                                                            
  Ellis, TX                                                             
  Henderson, TX                                                         
  Hunt, TX                                                              
  Kaufman, TX                                                           
  Rockwall, TX                                                          
1950  Danville, VA............................................    0.8146
  Danville City, VA                                                     
  Pittsylvania, VA                                                      
1960  Davenport-Rock Island-Moline, IA-IL.....................    0.8405
  Scott, IA                                                             
  Henry, IL                                                             
  Rock Island, IL                                                       
2000  Dayton-Springfield, OH..................................    0.9584

[[Page 98]]

                                                                        
  Clark, OH                                                             
  Greene, OH                                                            
  Miami, OH                                                             
  Montgomery, OH                                                        
2020  Daytona Beach, FL.......................................    0.8375
  Flagler, FL                                                           
  Volusia, FL                                                           
2030  Decatur, AL.............................................    0.8286
  Lawrence, AL                                                          
  Morgan, AL                                                            
2040  Decatur, IL.............................................    0.7915
  Macon, IL                                                             
2080  Denver, CO..............................................    1.0386
  Adams, CO                                                             
  Arapahoe, CO                                                          
  Denver, CO                                                            
  Douglas, CO                                                           
  Jefferson, CO                                                         
2120  Des Moines, IA..........................................    0.8837
  Dallas, IA                                                            
  Polk, IA                                                              
  Warren, IA                                                            
2160  Detroit, MI.............................................    1.0825
  Lapeer, MI                                                            
  Macomb, MI                                                            
  Monroe, MI                                                            
  Oakland, MI                                                           
  St. Clair, MI                                                         
  Wayne, MI                                                             
2180  Dothan, AL..............................................    0.8070
  Dale, AL                                                              
  Houston, AL                                                           
2190  Dover, DE...............................................    0.9303
  Kent, DE                                                              
2200  Dubuque, IA.............................................    0.8088
  Dubuque, IA                                                           
2240  Duluth-Superior, MN-WI..................................    0.9779
  St. Louis, MN                                                         
  Douglas, WI                                                           
2281  Dutchess County, NY.....................................    1.0632
  Dutchess, NY                                                          
2290  Eau Claire, WI..........................................    0.8764
  Chippewa, WI                                                          
  Eau Claire, WI                                                        
2320  El Paso, TX.............................................    1.0123
  El Paso, TX                                                           
2330  Elkhart-Goshen, IN......................................    0.9081
  Elkhart, IN                                                           
2335  Elmira, NY..............................................    0.8247
  Chemung, NY                                                           
2340  Enid, OK................................................    0.7962
  Garfield, OK                                                          
2360  Erie, PA................................................    0.8862
  Erie, PA                                                              
2400  Eugene-Springfield, OR..................................    1.1435
  Lane, OR                                                              
2440  Evansville-Henderson, IN-KY.............................    0.8641
  Posey, IN                                                             
  Vanderburgh, IN                                                       
  Warrick, IN                                                           
  Henderson, KY                                                         
2520  Fargo-Moorhead, ND-MN...................................    0.9937
  Clay, MN                                                              
  Cass, ND                                                              
2560  Fayetteville, NC........................................    0.8734
  Cumberland, NC                                                        
2580  Fayetteville-Springdale-Rogers, AR......................    0.7461
  Benton, AR                                                            
  Washington, AR                                                        
2620  Flagstaff, AZ-UT........................................    0.9115
  Coconino, AZ                                                          
  Kane, UT                                                              
2640  Flint, MI...............................................    1.1171
  Genesee, MI                                                           
2650  Florence, AL............................................    0.7551
  Colbert, AL                                                           
  Lauderdale, AL                                                        
2655  Florence, SC............................................    0.8711
  Florence, SC                                                          
2670  Fort Collins-Loveland, CO...............................    1.0248
  Larimer, CO                                                           
2680  Ft. Lauderdale, FL......................................    1.0448
  Broward, FL                                                           
2700  Fort Myers-Cape Coral, FL...............................    0.8788
  Lee, FL                                                               
2710  Fort Pierce-Port St. Lucie, FL..........................    1.0257
  Martin, FL                                                            
  St. Lucie, FL                                                         
2720  Fort Smith, AR-OK.......................................    0.7769
  Crawford, AR                                                          
  Sebastian, AR                                                         
  Sequoyah, OK                                                          
2750  Fort Walton Beach, FL...................................    0.8765
  Okaloosa, FL                                                          
2760  Fort Wayne, IN..........................................    0.8901
  Adams, IN                                                             
  Allen, IN                                                             
  DeKalb, IN                                                            
  Huntington, IN                                                        
  Wells, IN                                                             
  Whitley, IN                                                           
2800  Forth Worth-Arlington, TX...............................    0.9979
  Hood, TX                                                              
  Johnson, TX                                                           
  Parker, TX                                                            
  Tarrant, TX                                                           
2840  Fresno, CA..............................................    1.0607
  Fresno, CA                                                            
  Madera, CA                                                            
2880  Gadsden, AL.............................................    0.8815
  Etowah, AL                                                            
2900  Gainesville, FL.........................................    0.9616
  Alachua, FL                                                           
2920  Galveston-Texas City, TX................................    1.0564
  Galveston, TX                                                         
2960  ary, IN.................................................    0.9633
  Lake, IN                                                              
  Porter, IN                                                            
2975  Glens Falls, NY.........................................    0.8386
  Warren, NY                                                            
  Washington, NY                                                        
2980  Goldsboro, NC...........................................    0.8443
  Wayne, NC                                                             
2985  Grand Forks, ND-MN......................................          
  Polk, MN                                                              
  Grand Forks, ND                                                       
2995  Grand Junction, CO......................................    0.9090
  Mesa, CO                                                              
3000  Grand Rapids-Muskegon-Holland, MI.......................    1.0147
  Allegan, MI                                                           
  Kent, MI                                                              
  Muskegon, MI                                                          
  Ottawa, MI                                                            
3040  Great Falls, MT.........................................    0.8803
  Cascade, MT                                                           
3060  Greeley, CO.............................................    1.0097
  Weld, CO                                                              
3080  Green Bay, WI...........................................    0.9097
  Brown, WI                                                             
3120  Greensboro-Winston-Salem-High Point, NC.................    0.9351
  Alamance, NC                                                          
  Davidson, NC                                                          
  Davie, NC                                                             
  Forsyth, NC                                                           
  Guilford, NC                                                          
  Randolph, NC                                                          
  Stokes, NC                                                            
  Yadkin, NC                                                            
3150  Greenville, NC..........................................    0.9064
  Pitt, NC                                                              
3160  Greenville-Spartanburg-Anderson, SC.....................    0.9059
  Anderson, SC                                                          
  Cherokee, SC                                                          
  Greenville, SC                                                        
  Pickens, SC                                                           
  Spartanburg, SC                                                       
3180  Hagerstown, MD..........................................    0.9681
  Washington, MD                                                        
3200  Hamilton-Middletown, OH.................................    0.8767
  Butler, OH                                                            
3240  Harrisburg-Lebanon-Carlisle, PA.........................    1.0187
  Cumberland, PA                                                        
  Dauphin, PA                                                           
  Lebanon, PA                                                           
  Perry, PA                                                             
3283  Hartford, CT............................................    1.2562
  Hartford, CT                                                          
  Litchfield, CT                                                        
  Middlesex, CT                                                         
  Tolland, CT                                                           
3285  Hattiesburg, MS.........................................    0.7192
  Forrest, MS                                                           
  Lamar, MS                                                             
3290  Hickory-Morganton-Lenoir, NC............................    0.8686
  Alexander, NC                                                         
  Burke, NC                                                             
  Caldwell, NC                                                          
  Catawba, NC                                                           
3320  Honolulu, HI............................................    1.1816
  Honolulu, HI                                                          
3350  Houma, LA...............................................    0.7854
  Lafourche, LA                                                         
  Terrebonne, LA                                                        
3360  Houston, TX.............................................    0.9855
  Chambers, TX                                                          
  Fort Bend, TX                                                         
  Harris, TX                                                            
  Liberty, TX                                                           
  Montgomery, TX                                                        
  Waller, TX                                                            
3400  Huntington-Ashland, WV-KY-OH............................    0.9160
  Boyd, KY                                                              
  Carter, KY                                                            
  Greenup, KY                                                           
  Lawrence, OH                                                          
  Cabell, WV                                                            
  Wayne, WV                                                             
3440  Huntsville, AL..........................................    0.8485
  Limestone, AL                                                         
  Madison, AL                                                           

[[Page 99]]

                                                                        
3480  Indianapolis, IN........................................    0.9848
  Boone, IN                                                             
  Hamilton, IN                                                          
  Hancock, IN                                                           
  Hendricks, IN                                                         
  Johnson, IN                                                           
  Madison, IN                                                           
  Marion, IN                                                            
  Morgan, IN                                                            
  Shelby, IN                                                            
3500  Iowa City, IA...........................................    0.9413
  Johnson, IA                                                           
3520  Jackson, MI.............................................    0.9052
  Jackson, MI                                                           
3560  Jackson, MS.............................................    0.7760
  Hinds, MS                                                             
  Madison, MS                                                           
  Rankin, MS                                                            
3580  Jackson, TN.............................................    0.8522
  Madison, TN                                                           
  Chester, TN                                                           
3600  Jacksonville, FL........................................    0.8969
  Clay, FL                                                              
  Duval, FL                                                             
  Nassau, FL                                                            
  St. Johns, FL                                                         
3605  Jacksonville, NC........................................    0.6973
  Onslow, NC                                                            
3610  Jamestown, NY...........................................    0.7552
  Chautaqua, NY                                                         
3620  Janesville-Beloit, WI...................................    0.8824
  Rock, WI                                                              
3640  Jersey City, NJ.........................................    1.1412
  Hudson, NJ                                                            
3660  Johnson City-Kingsport-Bristol, TN-VA...................    0.9114
  Carter, TN                                                            
  Hawkins, TN                                                           
  Sullivan, TN                                                          
  Unicoi, TN                                                            
  Washington, TN                                                        
  Bristol City, VA                                                      
  Scott, VA                                                             
  Washington, VA                                                        
3680  Johnstown, PA...........................................    0.8378
  Cambria, PA                                                           
  Somerset, PA                                                          
3700  Jonesboro, AR...........................................    0.7443
  Craighead, AR                                                         
3710  Joplin, MO..............................................    0.7510
  Jasper, MO                                                            
  Newton, MO                                                            
3720  Kalamazoo-Battlecreek, MI...............................    1.0668
  Calhoun, MI                                                           
  Kalamazoo, MI                                                         
  Van Buren, MI                                                         
3740  Kankakee, IL............................................    0.8653
  Kankakee, IL                                                          
3760  Kansas City, KS-MO......................................    0.9564
  Johnson, KS                                                           
  Leavenworth, KS                                                       
  Miami, KS                                                             
  Wyandotte, KS                                                         
  Cass, MO                                                              
  Clay, MO                                                              
  Clinton, MO                                                           
  Jackson, MO                                                           
  Lafayette, MO                                                         
  Platte, MO                                                            
  Ray, MO                                                               
3800  Kenosha, WI.............................................    0.9196
  Kenosha, WI                                                           
3810  Killeen-Temple, TX......................................    1.0252
  Bell, TX                                                              
  Coryell, TX                                                           
3840  Knoxville, TN...........................................    0.8831
  Anderson, TN                                                          
  Blount, TN                                                            
  Knox, TN                                                              
  Loudon, TN                                                            
  Sevier, TN                                                            
  Union, TN                                                             
3850  Kokomo, IN..............................................    0.8416
  Howard, IN                                                            
  Tipton, IN                                                            
3870  La Crosse, WI-MN........................................    0.8749
  Houston, MN                                                           
  La Crosse, WI                                                         
3880  Lafayette, LA...........................................    0.8206
  Acadia, LA                                                            
  Lafayette, LA                                                         
  St. Landry, LA                                                        
  St. Martin, LA                                                        
3920  Lafayette, IN...........................................    0.9174
  Clinton, IN                                                           
  Tippecanoe, IN                                                        
3960  Lake Charles, LA........................................    0.7776
  Calcasieu, LA                                                         
3980  Lakeland-Winter Haven, FL...............................    0.8806
  Polk, FL                                                              
4000  Lancaster, PA...........................................    0.9481
  Lancaster, PA                                                         
4040  Lansing-East Lansing, MI................................    1.0088
  Clinton, MI                                                           
  Eaton, MI                                                             
  Ingham, MI                                                            
4080  Laredo, TX..............................................    0.7325
  Webb, TX                                                              
4100  Las Cruces, NM..........................................    0.8646
  Dona Ana, NM                                                          
4120  Las Vegas, NV-AZ........................................    1.0592
  Mohave, AZ                                                            
  Clark, NV                                                             
  Nye, NV                                                               
4150  Lawrence, KS............................................    0.8608
  Douglas, KS                                                           
4200  Lawton, OK..............................................    0.9045
  Comanche, OK                                                          
4243  Lewiston-Auburn, ME.....................................    0.9536
  Androscoggin, ME                                                      
4280  Lexington, KY...........................................    0.8390
  Bourbon, KY                                                           
  Clark, KY                                                             
  Fayette, KY                                                           
  Jessamine, KY                                                         
  Madison, KY                                                           
  Scott, KY                                                             
  Woodford, KY                                                          
4320  Lima, OH................................................    0.9185
  Allen, OH                                                             
  Auglaize, OH                                                          
4360  Lincoln, NE.............................................    0.9231
  Lancaster, NE                                                         
4400  Little Rock-North Little Rock, AR.......................    0.8490
  Faulkner, AR                                                          
  Lonoke, AR                                                            
  Pulaski, AR                                                           
  Saline, AR                                                            
4420  Longview-Marshall, TX...................................    0.8613
  Gregg, TX                                                             
  Harrison, TX                                                          
  Upshur, TX                                                            
4480  Los Angeles-Long Beach, CA..............................    1.2232
  Los Angeles, CA                                                       
4520  Louisville, KY-IN.......................................    0.9507
  Clark, IN                                                             
  Floyd, IN                                                             
  Harrison, IN                                                          
  Scott, IN                                                             
  Bullitt, KY                                                           
  Jefferson, KY                                                         
  Oldham, KY                                                            
4600  Lubbock, TX.............................................    0.8400
  Lubbock, TX                                                           
4640  Lynchburg, VA...........................................    0.8228
  Amherst, VA                                                           
  Bedford, VA                                                           
  Bedford City, VA                                                      
  Campbell, VA                                                          
  Lynchburg City, VA                                                    
4680  Macon, GA...............................................    0.9227
  Bibb, GA                                                              
  Houston, GA                                                           
  Jones, GA                                                             
  Peach, GA                                                             
  Twiggs, GA                                                            
4720  Madison, WI.............................................    1.0055
  Dane, WI                                                              
4800  Mansfield, OH...........................................    0.8639
  Crawford, OH                                                          
  Richland, OH                                                          
4840  Mayaguez, PR............................................    0.4475
  Anasco, PR                                                            
  Cabo Rojo, PR                                                         
  Hormigueros, PR                                                       
  Mayaguez, PR                                                          
  Sabana Grande, PR                                                     
  San German, PR                                                        
4880  McAllen-Edinburg-Mission, TX............................    0.8371
  Hidalgo, TX                                                           
4890  Medford-Ashland, OR.....................................    1.0354
  Jackson, OR                                                           
4900  Melbourne-Titusville-Palm Bay, FL.......................    0.8819
  Brevard, Fl                                                           
4920  Memphis, TN-AR-MS.......................................    0.8589
  Crittenden, AR                                                        
  DeSoto, MS                                                            
  Fayette, TN                                                           
  Shelby, TN                                                            
  Tipton, TN                                                            
4940  Merced, CA..............................................    1.0947
  Merced, CA                                                            
5000  Miami, FL...............................................    0.9859
  Dade, FL                                                              
5015  Middlesex-Somerset-Hunterdon, NJ........................    1.1059
  Hunterdon, NJ                                                         
  Middlesex, NJ                                                         
  Somerset, NJ1                                                         
5080  Milwaukee-Waukesha, WI..................................    0.9819
  Milwaukee, WI                                                         
  Ozaukee, WI                                                           
  Washington, WI                                                        
  Waukesha, WI                                                          

[[Page 100]]

                                                                        
5120  Minneapolis-St. Paul, MN-WI.............................    1.0733
  Anoka, MN                                                             
  Carver, MN                                                            
  Chisago, MN                                                           
  Dakota, MN                                                            
  Hennepin, MN                                                          
  Isanti, MN                                                            
  Ramsey, MN                                                            
  Scott, MN                                                             
  Sherburne, MN                                                         
  Washington, MN                                                        
  Wright, MN                                                            
  Pierce, WI                                                            
  St. Croix, WI                                                         
5160  Mobile, AL..............................................    0.8455
  Baldwin, AL                                                           
  Mobile, AL                                                            
5170  Modesto, CA.............................................    1.0794
  Stanislaus, CA                                                        
5190  Monmouth-Ocean, NJ......................................    1.0934
  Monmouth, NJ                                                          
  Ocean, NJ                                                             
5200  Monroe, LA..............................................    0.8414
  Ouachita, LA                                                          
5240  Montgomery, AL..........................................    0.7671
  Autauga, AL                                                           
  Elmore, AL                                                            
  Montgomery, AL                                                        
5280  Muncie, IN..............................................    0.9173
  Delaware, IN                                                          
5330  Myrtle Beach, SC........................................    0.8072
  Horry, SC                                                             
5345  Naples, FL..............................................    1.0109
  Collier, FL                                                           
5360  Nashville, TN...........................................    0.9182
  Cheatham, TN                                                          
  Davidson, TN                                                          
  Dickson, TN                                                           
  Robertson, TN                                                         
  Rutherford TN                                                         
  Sumner, TN                                                            
  Williamson, TN                                                        
  Wilson, TN                                                            
5380  Nassau-Suffolk, NY......................................    1.3807
  Nassau, NY                                                            
  Suffolk, NY                                                           
5483  New Haven-Bridgeport-Stamford-Danbury-Waterbury, CT.....    1.2618
  Fairfield, CT                                                         
  New Haven, CT                                                         
5523  New London-Norwich, CT..................................    1.2013
  New London, CT                                                        
5560  New Orleans, LA.........................................    0.9566
  Jefferson, LA                                                         
  Orleans, LA                                                           
  Plaquemines, LA                                                       
  St. Bernard, LA                                                       
  St. Charles, LA                                                       
  St. James, LA                                                         
  St. John Baptist, LA                                                  
  St. Tammany, LA                                                       
5600  New York, NY............................................    1.4449
  Bronx, NY                                                             
  Kings, NY                                                             
  New York, NY                                                          
  Putnam, NY                                                            
  Queens, NY                                                            
  Richmond, NY                                                          
  Rockland, NY                                                          
  Westchester, NY                                                       
5640  Newark, NJ..............................................    1.1980
  Essex, NJ                                                             
  Morris, NJ                                                            
  Sussex, NJ                                                            
  Union, NJ                                                             
  Warren, NJ                                                            
5660  Newburgh, NY-PA.........................................    1.1283
  Orange, NY                                                            
  Pike, PA                                                              
5720  Norfolk-Virginia Beach-Newport News, VA-NC..............    0.8316
  Currituck, NC                                                         
  Chesapeake City, VA                                                   
  Gloucester, VA                                                        
  Hampton City, VA                                                      
  Isle of Wight, VA                                                     
  James City, VA                                                        
  Mathews, VA                                                           
  Newport News City, VA                                                 
  Norfolk City, VA                                                      
  Poquoson City, VA                                                     
  Portsmouth City, VA                                                   
  Suffolk City, VA                                                      
  Virginia Beach City, VA                                               
  Williamsburg City, VA                                                 
  York, VA                                                              
5775  Oakland, CA.............................................    1.5068
  Alameda, CA                                                           
  Contra Costa, CA                                                      
5790  Ocala, FL...............................................    0.9032
  Marion, FL                                                            
5800  Odessa-Midland, TX......................................    0.8660
  Ector, TX                                                             
  Midland, TX                                                           
5880  Oklahoma City, OK.......................................    0.8481
  Canadian, OK                                                          
  Cleveland, OK                                                         
  Logan, OK                                                             
  McClain, OK                                                           
  Oklahoma, OK                                                          
  Pottawatomie, OK                                                      
5910  Olympia, WA.............................................    1.0901
  Thurston, WA                                                          
5920  Omaha, NE-IA............................................    0.9421
  Pottawattamie, IA                                                     
  Cass, NE                                                              
  Douglas, NE                                                           
  Sarpy, NE                                                             
  Washington, NE                                                        
5945  Orange County, CA.......................................    1.1605
  Orange, CA                                                            
5960  Orlando, FL.............................................    0.9397
  Lake, FL                                                              
  Orange, FL                                                            
  Osceola, FL                                                           
  Seminole, FL                                                          
5990  Owensboro, KY...........................................    0.7480
  Daviess, KY                                                           
6015  Panama City, FL.........................................    0.8337
  Bay, FL                                                               
6020  Parkersburg-Marietta, WV-OH.............................    0.8046
  Washington, OH                                                        
  Wood, WV                                                              
6080  Pensacola, FL...........................................    0.8193
  Escambia, FL                                                          
  Santa Rosa, FL                                                        
6120  Peoria-Pekin, IL........................................    0.8571
  Peoria, IL                                                            
  Tazewell, IL                                                          
  Woodford, IL                                                          
6160  Philadelphia, PA-NJ.....................................    1.1398
  Burlington, NJ                                                        
  Camden, NJ                                                            
  Gloucester, NJ                                                        
  Salem, NJ                                                             
  Bucks, PA                                                             
  Chester, PA                                                           
  Delaware, PA                                                          
  Montgomery, PA                                                        
  Philadelphia, PA                                                      
6200  Phoenix-Mesa, AZ........................................    0.9606
  Maricopa, AZ                                                          
  Pinal, AZ                                                             
6240  Pine Bluff, AR..........................................    0.7826
  Jefferson, AR                                                   0.7826
6280  Pittsburgh, PA..........................................    0.9725
  Allegheny, PA                                                         
  Beaver, PA                                                            
  Butler, PA                                                            
  Fayette, PA                                                           
  Washington, PA                                                        
  Westmoreland, PA                                                      
6323  Pittsfield, MA..........................................    1.0960
  Berkshire, MA                                                   1.0960
6340  Pocatelo, ID............................................    0.9586
  Bannock ID                                                            
6360  Ponce, PR...............................................    0.4589
  Guayanilla, PR                                                        
  Juana Diaz, PR                                                        
  Penuelas, PR                                                          
  Ponce, PR                                                             
  Villalba, PR                                                          
  Yauco, PR                                                             
6403  Portland, ME............................................    0.9627
  Cumberland, ME                                                        
  Sagadahoc, ME                                                         
  York, ME                                                              
6440  Portland-Vancouver, OR-WA...............................    1.1344
  Clackamas, OR                                                         
  Columbia, OR                                                          
  Multnomah, OR                                                         
  Washington, OR                                                        
  Yamhill, OR                                                           
  Clark, WA                                                             
6483  Providence-Warwick-Pawtucket, RI........................    1.1049
  Bristol, RI                                                           
  Kent, RI                                                              
  Newport, RI                                                           
  Providence, RI                                                        
  Washington, RI                                                        
  Statewide, RI                                                         
6520  Provo-Orem, UT..........................................    1.0073
  Utah, UT                                                              
6560  Pueblo, CO..............................................    0.8450
  Pueblo, CO                                                            
6580  Punta Gorda, FL.........................................    0.8725
  Charlotte, FL                                                         
6600  Racine, WI..............................................    0.8934
  Racine, WI                                                            
6640  Raleigh-Durham-Chapel Hill, NC..........................    0.9818
  Chatham, NC                                                           
  Durham, NC                                                            
  Franklin, NC                                                          
  Johnston, NC                                                          

[[Page 101]]

                                                                        
  Orange, NC                                                            
  Wake, NC                                                              
6660  Rapid City, SD..........................................    0.8345
  Pennington, SD                                                        
6680  Reading, PA.............................................    0.9516
  Berks, PA                                                             
6690  Redding, CA.............................................    1.1790
  Shasta, CA                                                            
6720  Reno, NV................................................    1.0768
  Washoe, NV                                                            
6740  Richland-Kennewick-Pasco, WA............................    0.9918
  Benton, WA                                                            
  Franklin, WA                                                          
6760  Richmond-Petersburg, VA.................................    0.9152
  Charles City County, VA                                               
  Chesterfield, VA                                                      
  Colonial Heights City, VA                                             
  Dinwiddie, VA                                                         
  Goochland, VA                                                         
  Hanover, VA                                                           
  Henrico, VA                                                           
  Hopewell City, VA                                                     
  New Kent, VA                                                          
  Petersburg City, VA                                                   
  Powhatan, VA                                                          
  Prince George, VA                                                     
  Richmond City, VA                                                     
6780  Riverside-San Bernardino, CA............................    1.1307
  Riverside, CA                                                         
  San Bernardino, CA                                                    
6800  Roanoke, VA.............................................    0.8402
  Botetourt, VA                                                         
  Roanoke, VA                                                           
  Roanoke City, VA                                                      
  Salem City, VA                                                        
6820  Rochester, MN...........................................    1.0502
  Olmsted, MN                                                           
6840  Rochester, NY...........................................    0.9524
  Genesee, NY                                                           
  Livingston, NY                                                        
  Monroe, NY                                                            
  Ontario, NY                                                           
  Orleans, NY                                                           
  Wayne, NY                                                             
6880  Rockford, IL............................................    0.9081
  Boone, IL                                                             
  Ogle, IL                                                              
  Winnebago, IL                                                         
6895  Rocky Mount, NC.........................................    0.9029
  Edgecombe, NC                                                         
  Nash, NC                                                              
6920  Sacramento, CA..........................................    1.2202
  El Dorado, CA                                                         
  Placer, CA                                                            
  Sacramento, CA                                                        
6960  Saginaw-Bay City-Midland, MI............................    0.9564
  Bay, MI                                                               
  Midland, MI                                                           
  Saginaw, MI                                                           
6980  St. Cloud, MN...........................................    0.9544
  Benton, MN                                                            
  Stearns, MN                                                           
7000  St. Joseph, MO..........................................    0.8366
  Andrews, MO                                                           
  Buchanan, MO                                                          
7040  St. Louis, MO-IL........................................    0.9130
  Clinton, IL                                                           
  Jersey, IL                                                            
  Madison, IL                                                           
  Monroe, IL                                                            
  St. Clair, IL                                                         
  Franklin, MO                                                          
  Jefferson, MO                                                         
  Lincoln, MO                                                           
  St. Charles, MO                                                       
  St. Louis, MO                                                         
  St. Louis City, MO                                                    
  Warren, MO                                                            
7080  Salem, OR...............................................    0.9935
  Marion, OR                                                            
  Polk, OR                                                              
7120  Salinas, CA.............................................    1.4513
  Monterey, CA                                                          
7160  Salt Lake City-Ogden, UT................................    0.9857
  Davis, UT                                                             
  Salt Lake, UT                                                         
  Weber, UT                                                             
7200  San Angelo, TX..........................................    0.7780
  Tom Green, TX                                                         
7240  San Antonio, TX.........................................    0.8499
  Bexar, TX                                                             
  Comal, TX                                                             
  Guadalupe, TX                                                         
  Wilson, TX                                                            
7320  San Diego, CA...........................................    1.2193
  San Diego, CA                                                         
7360  San Francisco, CA.......................................    1.4180
  Marin, CA                                                             
  San Francisco, CA                                                     
  San Mateo, CA                                                         
7400  San Jose, CA............................................    1.4332
  Santa Clara, CA                                                       
7440  San Juan-Bayamon, PR....................................    0.4625
  Aguas Buenas, PR                                                      
  Barceloneta, PR                                                       
  Bayamon, PR                                                           
  Canovanas, PR                                                         
  Carolina, PR                                                          
  Catano, PR                                                            
  Ceiba, PR                                                             
  Comerio, PR                                                           
  Corozal, PR                                                           
  Dorado, PR                                                            
  Fajardo, PR                                                           
  Florida, PR                                                           
  Guaynabo, PR                                                          
  Humacao, PR                                                           
  Juncos, PR                                                            
  Los Piedras, PR                                                       
  Loiza, PR                                                             
  Luguillo, PR                                                          
  Manati, PR                                                            
  Morovis, PR                                                           
  Naguabo, PR                                                           
  Naranjito, PR                                                         
  Rio Grande, PR                                                        
  San Juan, PR                                                          
  Toa Alta, PR                                                          
  Toa Baja, PR                                                          
  Trujillo Alto, PR                                                     
  Vega Alta, PR                                                         
  Vega Baja, PR                                                         
  Yabucoa, PR                                                           
7460  San Luis Obispo-Atascadero-Paso Robles, CA..............    1.1374
  San Luis Obispo, CA                                                   
7480  Santa Barbara-Santa Maria-Lompoc, CA....................    1.0688
  Santa Barbara, CA                                                     
7485  Santa Cruz-Watsonville, CA..............................    1.4187
  Santa Cruz, CA                                                        
7490  Santa Fe, NM............................................    1.0332
  Los Alamos, NM                                                        
  Santa Fe, NM                                                          
7500  Santa Rosa, CA..........................................    1.2815
  Sonoma, CA                                                            
7510  Sarasota-Bradenton, FL..................................    0.9757
  Manatee, FL                                                           
  Sarasota, FL                                                          
7520  Savannah, GA............................................    0.8638
  Bryan, GA                                                             
  Chatham, GA                                                           
  Effingham, GA                                                         
7560  Scranton--Wilkes-Barre--Hazleton, PA....................    0.8539
  Columbia, PA                                                          
  Lackawanna, PA                                                        
  Luzerne, PA                                                           
  Wyoming, PA                                                           
7600  Seattle-Bellevue-Everett, WA............................    1.1339
  Island, WA                                                            
  King, WA                                                              
  Snohomish, WA                                                         
7610  Sharon, PA..............................................    0.8783
  Mercer, PA                                                            
7620  Sheboygan, WI...........................................    0.7862
  Sheboygan, WI                                                         
7640  Sherman-Denison, TX.....................................    0.8499
  Grayson, TX                                                           
7680  Shreveport-Bossier City, LA.............................    0.9381
  Bossier, LA                                                           
  Caddo, LA                                                             
  Webster, LA                                                           
7720  Sioux City, IA-NE.......................................    0.8031
  Woodbury, IA                                                          
  Dakota, NE                                                            
7760  Sioux Falls, SD.........................................    0.8712
  Lincoln, SD                                                           
  Minnehaha, SD                                                         
7800  South Bend, IN..........................................    0.9868
  St. Joseph, IN                                                        
7840  Spokane, WA.............................................    1.0486
  Spokane, WA                                                           
7880  Springfield, IL.........................................    0.8713
  Menard, IL                                                            
  Sangamon, IL                                                          
7920  Springfield, MO.........................................    0.7989
  Christian, MO                                                         
  Greene, MO                                                            
  Webster, MO                                                           
8003  Springfield, MA.........................................    1.0740
  Hampden, MA                                                           
  Hampshire, MA                                                         
8050  State College, PA.......................................    0.9635
  Centre, PA                                                            
8080  Steubenville-Weirton, OH-WV.............................    0.8645
  Jefferson, OH                                                         
  Brooke, WV                                                            
  Hancock, WV                                                           
8120  Stockton-Lodi, CA.......................................    1.1496
  San Joaquin, CA                                                       
8140  Sumter, SC..............................................    0.7842
  Sumter, SC                                                            

[[Page 102]]

                                                                        
8160  Syracuse, NY............................................    0.9464
  Cayuga, NY                                                            
  Madison, NY                                                           
  Onondaga, NY                                                          
  Oswego, NY                                                            
8200  Tacoma, WA..............................................    1.1016
  Pierce, WA                                                            
8240  Tallahassee, FL.........................................    0.8832
  Gadsden, FL                                                           
  Leon, FL                                                              
8280  Tampa-St. Petersburg-Clearwater, FL.....................    0.9103
  Hernando, FL                                                          
  Hillsborough, FL                                                      
  Pasco, FL                                                             
  Pinellas, FL                                                          
8320  Terre Haute, IN.........................................    0.8614
  Clay, IN                                                              
  Vermillion, IN                                                        
  Vigo, IN                                                              
8360  Texarkana, AR-Texarkana, TX.............................    0.8664
  Miller, AR                                                            
  Bowie, TX                                                             
8400  Toledo, OH..............................................    1.0390
  Fulton, OH                                                            
  Lucas, OH                                                             
  Wood, OH                                                              
8440  Topeka, KS..............................................    0.9438
  Shawnee, KS                                                           
8480  Trenton, NJ.............................................    1.0380
  Mercer, NJ                                                            
8520  Tucson, AZ..............................................    0.9180
  Pima, AZ                                                              
8560  Tulsa, OK...............................................    0.8074
  Creek, OK                                                             
  Osage, OK                                                             
  Rogers, OK                                                            
  Tulsa, OK                                                             
  Wagoner, OK                                                           
8600  Tuscaloosa, AL..........................................    0.8187
  Tuscaloosa, AL                                                        
8640  Tyler, TX...............................................    0.9567
  Smith, TX                                                             
8680  Utica-Rome, NY..........................................    0.8398
  Herkimer, NY                                                          
  Oneida, NY                                                            
8720  Vallejo-Fairfield-Napa, CA..............................    1.3754
  Napa, CA                                                              
  Solano, CA                                                            
8735  Ventura, CA.............................................    1.0946
  Ventura, CA                                                           
8750  Victoria, TX............................................    0.8474
  Victoria, TX                                                          
8760  Vineland-Millville-Bridgeton, NJ........................    1.0110
  Cumberland, NJ                                                        
8780  Visalia-Tulare-Porterville, CA..........................    0.9924
  Tulare, CA                                                            
8800  Waco, TX................................................    0.7696
  McLennan, TX                                                          
8840  Washington, DC-MD-VA-WV.................................    1.0911
  District of Columbia, DC                                              
  Calvert, MD                                                           
  Charles, MD                                                           
  Frederick, MD                                                         
  Montgomery, MD                                                        
  Prince Georges, MD                                                    
  Alexandria City, VA                                                   
  Arlington, VA                                                         
  Clarke, VA                                                            
  Culpepper, VA                                                         
  Fairfax, VA                                                           
  Fairfax City, VA                                                      
  Falls Church City, VA                                                 
  Fauquier, VA                                                          
  Fredericksburg City, VA                                               
  King George, VA                                                       
  Loudoun, VA                                                           
  Manassas City, VA                                                     
  Manassas Park City, VA                                                
  Prince William, VA                                                    
  Spotsylvania, VA                                                      
  Stafford, VA                                                          
  Warren, VA                                                            
  Berkeley, WV                                                          
  Jefferson, WV                                                         
8920  Waterloo-Cedar Falls, IA................................    0.8640
  Black Hawk, IA                                                        
8940  Wausau, WI..............................................    1.0545
  Marathon, WI                                                          
896  West Palm Beach-Boca Raton, FL...........................    1.0372
  Palm Beach, FL                                                        
9000  Wheeling, OH-WV.........................................    0.7707
  Belmont, OH                                                           
  Marshall, WV                                                          
  Ohio, WV                                                              
9040  Wichita, KS.............................................    0.9403
  Butler, KS                                                            
  Harvey, KS                                                            
  Sedgwick, KS                                                          
9080  Wichita Falls, TX.......................................    0.7646
  Archer, TX                                                            
  Wichita, TX                                                           
9140  Williamsport, PA........................................    0.8548
  Lycoming, PA                                                          
9160  Wilmington-Newark, DE-MD................................    1.1538
  New Castle, DE                                                        
  Cecil, MD                                                             
9200  Wilmington, NC..........................................    0.9322
  New Hanover, NC                                                       
  Brunswick, NC                                                         
9260  Yakima, WA..............................................    1.0102
  Yakima, WA                                                            
9270  Yolo, CA................................................    1.1431
  Yolo, CA                                                              
9280  York, PA................................................    0.9415
  York, PA                                                              
9320  Youngstown-Warren, OH...................................    0.9937
  Columbiana, OH                                                        
  Mahoning, OH                                                          
  Trumbull, OH                                                          
9340  Yuba City, CA...........................................    1.0324
  Sutter, CA                                                            
  Yuba, CA                                                              
9360  Yuma, AZ................................................    0.9732
  Yuma, AZ                                                              
------------------------------------------------------------------------
*Large Urban Area.                                                      


                  Table 4b.--Wage Index for Rural Areas                 
------------------------------------------------------------------------
                                                                  Wage  
                         Nonurban area                            index 
------------------------------------------------------------------------
Alabama.......................................................    0.7260
Alaska........................................................    1.2302
Arizona.......................................................    0.7989
Arkansas......................................................    0.6995
California....................................................    0.9977
Colorado......................................................    0.8129
Connecticut...................................................    1.2617
Delaware......................................................    0.8925
Florida.......................................................    0.8838
Georgia.......................................................    0.7761
Hawaii........................................................    1.0229
Idaho.........................................................    0.8221
Illinois......................................................    0.7644
Indiana.......................................................    0.8161
Iowa..........................................................    0.7391
Kansas........................................................    0.7203
Kentucky......................................................    0.7772
Louisiana.....................................................    0.7383
Maine.........................................................    0.8468
Maryland......................................................    0.8617
Massachusetts.................................................    1.0718
Michigan......................................................    0.8923
Minnesota.....................................................    0.8179
Mississippi...................................................    0.6911
Missouri......................................................    0.7205
Montana.......................................................    0.8302
Nebraska......................................................    0.7401
Nevada........................................................    0.8914
New Hampshire.................................................    0.9717
New Jersey \1\................................................  ........
New Mexico....................................................    0.8070
New York......................................................    0.8401
North Carolina................................................    0.7937
North Dakota..................................................    0.7360
Ohio..........................................................    0.8434
Oklahoma......................................................    0.7072
Oregon........................................................    0.9975
Pennsylvania..................................................    0.8421
Puerto Rico...................................................    0.3939
Rhode Island \1\..............................................  ........
South Carolina................................................    0.7921
South Dakota..................................................    0.6983
Tennessee.....................................................    0.7353
Texas.........................................................    0.7404
Utah..........................................................    0.8926
Vermont.......................................................    0.9314
Virginia......................................................    0.7782
Washington....................................................    1.0221
West Virginia.................................................    0.7938
Wisconsin.....................................................    0.8471
Wyoming.......................................................   0.8247 
------------------------------------------------------------------------
\1\ All counties within the State are classified urban.                 


           Table 5.--Cost Reporting Year Adjustment Factor \1\          
------------------------------------------------------------------------
                                                                 The    
          If the HHA cost reporting period begins             adjustment
                                                              factor is 
------------------------------------------------------------------------
November 1, 1997...........................................      1.00260
December 1, 1997...........................................      1.00521
January 1, 1998............................................      1.00781
February 1, 1998...........................................      1.01042
March 1, 1998..............................................      1.01302
April 1, 1998..............................................      1.01563
May 1,1998.................................................      1.01823
June 1, 1998...............................................      1.02086

[[Page 103]]

                                                                        
July 1, 1998...............................................      1.02353
August 1, 1998.............................................      1.02626
September 1, 1998..........................................     1.02901 
------------------------------------------------------------------------
\1\ Based on compounded projected market basket inflation rates.        
Source: The Home Health Agency Input Price Index, produced by HCFA for  
  the period between 1983:1 and 2008:4. The forecasts are from Standard 
  and Poor's DRI 3rd QTR 1997; @USSIM/TREND25YR0897@CISSIM/Control973   
  forecast exercise which has historical data through 1997:2.           

    These adjustment factors are subject to change based on later 
estimates of cost increases.
    If, for any reason, we do not publish a new schedule of limits to 
be effective on October 1, 1998 or do not announce other changes in the 
current schedule by that date, the current limits will continue in 
effect. Intermediaries will be notified of the adjustment factors to be 
applied until a new schedule of limits or other provision is issued.

 Table 6.--Monthly Index Levels for Calculating Inflation Factors To Be 
                Applied to Home Health Agency Cost Limits               
------------------------------------------------------------------------
                                                                  Index 
                             Month                                level 
------------------------------------------------------------------------
October 1997..................................................   1.07348
November 1997.................................................   1.07633
December 1997.................................................   1.07948
January 1998..................................................   1.08263
February 1998.................................................   1.08580
March 1998....................................................   1.08800
April 1998....................................................   1.09021
May 1998......................................................   1.09242
June 1998.....................................................   1.09557
July 1998.....................................................   1.09873
August 1998...................................................   1.10189
September 1998................................................   1.10472
October 1998..................................................   1.10756
November 1998.................................................   1.11041
December 1998.................................................   1.11356
January 1999..................................................   1.11671
February 1999.................................................   1.11988
March 1999....................................................   1.12208
April 1999....................................................   1.12429
May 1999......................................................   1.12650
June 1999.....................................................   1.13028
July 1999.....................................................   1.13406
August 1999...................................................   1.13786
September 1999................................................   1.14070
------------------------------------------------------------------------
Source: The Home Health Agency Input Price Index, produced by HCFA for  
  the period between 1983:1 and 2008:4. The forecasts are from DRI's 3rd
  QTR 1997; @USSIM/TREND25YR0897@CISSIM/Control973 forecast exercise    
  which has historical data through 1997:2.                             

X. Regulatory Impact Statement

A. Introduction

    HCFA has examined the impacts of this notice with comment period as 
required by Executive Order 12866 and the Regulatory Flexibility Act 
(RFA) (Pub. L. 96-354). Executive Order 12866 directs agencies to 
assess all costs and benefits of available regulatory alternatives and, 
when regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects; distributive impacts; and equity). 
The RFA requires agencies to analyze options for regulatory relief for 
small businesses. For purposes of the RFA, States and individuals are 
not considered small entities. However, most providers, physicians, and 
health care suppliers are small entities, either by nonprofit status or 
by having revenues of $5 million or less annually.
    We estimate that the impact of this notice with comment period will 
be to decrease payments to home health agencies by approximately $570 
million in FY 1998, compared to the payment that would have been made 
in FY 1998 if BBA '97 had not been enacted. Therefore, this notice is a 
major rule as defined in Title 5, United States Code, section 804(2).
    It is clear that the changes being made in this document will 
affect both a substantial number of small HHAs as well as other classes 
of HHAs, and the effects on some may be significant. Therefore, the 
discussion below, in combination with the rest of this notice with 
comment period, constitutes a combined regulatory impact analysis and 
regulatory flexibility analysis.

B. Changes in the Notice With Comment Period

    Several provisions of Public Law 105-33 make significant changes in 
payments for services provided by HHAs. The provisions that have 
significant payment impacts for FY 1998 include the following:
     The establishment of the cost per visit limitations be 
based on 105 percent of the median of the labor-related and nonlabor 
per visit costs for freestanding HHAs.
     That there be no updates in the home health cost limits 
for cost reporting periods beginning on or after July 1, 1994 and 
before July 1, 1996.
     The applicable wage index will be from the geographic area 
in which the home health service is furnished.

C. Effect on Home Health Agencies

    The following quantitative analysis presents the projected effects 
of the statutory changes effective for FY 1998. The sum of the impacts 
of the individual provisions of the statute do not equal the total 
impact of the provisions when combined due to the interaction of the 
various provisions. Therefore, the impact section will address total 
impact in order to avoid confusion.
    As discussed below, the impact of this final notice with comment 
period will decrease payments to HHAs by approximately $570 million in 
FY 1998 compared to payment that would have been made in FY 1998 if BBA 
'97 had not been enacted. This notice is necessary to implement the 
provisions of section 1861(v)(1)(L) of the Act, as amended by BBA '97, 
these alternatives to the provisions set forth in this notice are not 
available.
    This notice with comment period sets forth a revised schedule of 
HHA cost limits for cost reporting periods beginning on or after 
October 1, 1997. In accordance with section 1861(v)(1)(L)(i)(IV) of the 
Act, as amended by BBA '97, the limits have been set not to exceed 105 
percent of the median of the labor-related and nonlabor per-visit costs 
for freestanding HHAs. As required by section 1861(v)(1)(l)(iii) of the 
Act, we are using the most recent hospital wage index to calculate the 
HHA cost limits, that is, the hospital wage index effective for 
discharges on or after October 1, 1997, which is based on 1994 wage 
survey data. The wage index is used to adjust the labor-related 
portions of the limits to reflect differing wage levels among areas. As 
discussed in section II of this notice, we are applying a budget 
neutrality adjustment factor of 1.009 to the labor-related portion of 
the limits to ensure that aggregate payments to HHAs are not affected 
by the updating of the wage index.
    We are using settled cost report data from Medicare cost reports 
for cost reporting periods ending on or after June 30, 1991, and 
settled before October 1, 1995, to develop the HHA cost-per visit limit 
values for each type of home health service: skilled nursing care, 
physical therapy, speech pathology, occupational therapy, medical 
social services, and home health aide. The majority of the cost reports 
were from FY 1993. The data have been adjusted by the most recent 
market basket factors, excluding market basket increases for cost 
reporting periods beginning on or after July 1, 1994 and before July 1, 
1996, to reflect

[[Page 104]]

the expected cost increases occurring between the cost reporting 
periods for the data contained in the database and September 30, 1998. 
The intermediary determines the aggregate cost limit for each HHA by 
multiplying the number of Medicare visits for each type of services 
furnished by the HHA by the respective per-visit cost limit. Each HHA's 
aggregate limit cannot be determined prospectively, but depends on each 
HHA's Medicare visits for each type of service and actual costs for the 
cost reporting period subject to this notice.
    The methodology used to calculate these new limits reflects the 
changes resulting from the provisions in BBA '97. The projected 
decrease in payments for home health services provided by HHAs when 
compared to the projected expenditures under the old cost limits in 
effect prior to October 1, 1997, updated by the market basket increases 
since those limits took effect, is approximately $570 million. 
Projected decreases in payments using this same methodology for fiscal 
years prior to the implementation of a home health prospective payment 
system is $990 million in FY 99.
    The cost limits for HHAs are statutorily driven and the impact of 
decreases in payments to HHAs have been reflected in the current law 
baseline of the mid-session review of the President's FY 98 budget.
    We are unable to identify the effects of the changes to the cost 
limits on individual HHAs. However, Table 7 below illustrates the 
proportion of HHAs that are likely to be affected by the limits. The 
results are based on both the data used to determine the limits and all 
available settled hospital-based cost reports for the same time period:

 Table 7.--HHAs Exceeding the Cost Limits Based on 105% of the Median of
         Per Visit Costs From Freestanding Home Health Agencies         
------------------------------------------------------------------------
                                                 Number of    Percentage
                                    Number of       HHAs       of HHAs  
                                     HHAs in     exceeding    exceeding 
                                     database    the limits   the limits
------------------------------------------------------------------------
Total HHAs.......................         4986         3232           65
Urban:                                                                  
    Freestanding.................         2220         1252           56
    Hospital-based...............          868          742           85
Rural:                                                                  
    Freestanding.................          982          539           55
    Hospital-based...............          916          699           76
------------------------------------------------------------------------

    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.

XI. Other Required Information

A. Waiver of Proposed Notice

    We ordinarily publish a proposed notice in the Federal Register 
with a 60-day period for public comment as required under section 
1871(b)(1) of the Act. However, section 1871(b)(2)(B) of the Act 
provides that publication of a proposed notice is not required before 
the notice takes effect if ``a statute establishes a specific deadline 
for implementation of a provision and the deadline is less than 150 
days after the date of the enactment of the statute in which the 
deadline is contained.'' In addition, we may waive the 60-day period 
for public comment if we find good cause that prior notice and comment 
are impracticable, unnecessary or contrary to the public interest.
    On July 1, 1997, we published a notice with comment period 
addressing the per-visit limits for HHAs for cost reporting periods 
beginning on or after July 1, 1997. Subsequently, on August 5, 1997, 
Pub. L. 105-33 was enacted. Pub. L. 105-33 changed certain factors in 
the calculation of the limit for cost reporting periods beginning on or 
after October 1, 1997, and added other provisions relating to this 
limit. These statutory provisions were generally effective for cost 
reporting periods beginning on or after October 1, 1997.
    In accordance with section 1871(b)(2)(B) of the Act, publication of 
a proposed notice with prior comment period is not required before 
implementing the statutory provisions of Pub. L. 105-33 that take 
effect for cost reporting periods beginning on or after October 1, 
1997. In addition, as discussed in section III above, in accordance 
with the statute, we have used the same methodology to develop the 
schedule of limits that was used in setting the limits effective for 
cost reporting periods beginning on or after July 1, 1996. The cost 
limits have been updated by the appropriate market basket adjustment 
factor to reflect the cost increases occurring between the cost 
reporting periods for the data contained in the database and September 
30, 1998. Moreover, as required under section 1861(v)(1)(L)(iii) of the 
Act, we have updated the wage index using the most recent hospital wage 
index. Therefore, we believe that in this instance, it would be 
impracticable and unnecessary to publish a proposed notice and find 
good cause to waive publication of a proposed notice. However, we are 
providing a 60-day period for public comment on these provisions.

B. Waiver of 30-day Delay in Effective Date

    Generally, the Administrative Procedure Act requires us to provide 
a 30-day delay before effectuation of a final rule unless we find good 
cause to dispense with that delay. 5 U.S.C. section 553(d). To the 
extent this requirement applies to this Notice with comment, we find 
good cause to waive the 30-day delay in effective date.
    As noted previously, these per-visit cost limits are effective for 
cost reporting periods beginning on or after October 1, 1997. Section 
1861(v)(1)(L)(vii) of the Act requires the Secretary to establish there 
per-visit cost limits by January 1, 1998 and requires that they apply 
to cost reporting periods beginning on or after October 1, 1997. That 
statutory requirement is clear. A 30-day delay in implementing these 
cost limits is unnecessary. Therefore, we find that it is unnecessary 
to provide for a 30-day delay in effective date and find good cause to 
waive the delay in effective date.

C. Effect of the Contract with America Advancement Act, Pub. L. 104-121

    Normally, under 5 U.S.C. Sec. 801, as added by Sec. 251 of Pub. L. 
No. 104-121, the effective date of a major rule is

[[Page 105]]

delayed 60 days for Congressional review. This has been determined to 
be a major rule under title 5, United States Code, section 804(2). 
However, as indicated in section XI.A of the preamble to this notice 
with comment period, for good cause, we find that prior notice and 
comment procedures are impracticable and unnecessary. Pursuant to 5 
U.S.C. section 808(2), a major rule shall take effect at such time as 
the Federal agency promulgating the rule determines if for good cause 
it finds that notice and public procedure is impracticable or 
unnecessary. Accordingly, under the exemption provided in 5 U.S.C 
section 808(2), this schedule of limits is effective for cost reporting 
periods beginning on or after October 1, 1997.

D. Public Comments

    Because of the large number of items of correspondence we normally 
receive on a notice with comment period, we are not able to acknowledge 
or respond to them individually. However, we will consider all comments 
concerning the provisions of this notice that we receive by the date 
and time specified in the ``Dates'' section of this notice, and we will 
respond to those comments in a subsequent notice.

    Authority: Section 1861(v)(1)(L) of the Social Security Act (42 
U.S.C. 1395x(v)(1)(L)); section 4207(d) of Pub. L. 101-508 (42 
U.S.C. 1395x (note)).

(Catalog of Federal Domestic Assistance Program No. 93.773 
Medicare--Hospital Insurance)

    Dated: December 8, 1997.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
    Dated: December 22, 1997.
Donna E. Shalala,
Secretary.
[FR Doc. 97-34221 Filed 12-31-97; 8:45 am]
BILLING CODE 4120-01-P