[Federal Register Volume 64, Number 150 (Thursday, August 5, 1999)]
[Notices]
[Pages 42766-42789]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20012]



[[Page 42765]]

_______________________________________________________________________

Part II





Department of Health and Human Services





_______________________________________________________________________



Health Care Financing Administration



_______________________________________________________________________



Medicare Program; Schedules of Per-Visit and Per-Beneficiary 
Limitations on Home Health Agency Costs for Cost Reporting Periods 
Beginning On or After October 1, 1999 and Portions of Cost Reporting 
Periods Beginning Before October 1, 2000; Notice

  Federal Register / Vol. 64, No. 150 / Thursday, August 5, 1999 / 
Notices  

[[Page 42766]]



DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[HCFA-1060-NC]
RIN 0938-AJ57


Medicare Program; Schedules of Per-Visit and Per-Beneficiary 
Limitations on Home Health Agency Costs for Cost Reporting Periods 
Beginning on or After October 1, 1999 and Portions of Cost Reporting 
Periods Beginning Before October 1, 2000

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

ACTION: Notice with comment period.

-----------------------------------------------------------------------

SUMMARY: This notice with comment period sets forth revised schedules 
of limitations on home health agency costs that may be paid under the 
Medicare program for cost reporting periods beginning on or after 
October 1, 1999 and portions of cost reporting periods beginning before 
October 1, 2000. These limitations replace the limitations that were 
set forth in our August 11, 1998 notice with comment period (63 FR 
42912).

DATES: Effective Date: These schedules of limitations are effective for 
cost reporting periods beginning on or after October 1, 1999 and 
portions of cost reporting periods beginning before October 1, 2000.
    Comment Date: Written comments will be considered if we receive 
them at the appropriate address, as provided below, no later than 5 p. 
m. on October 4, 1999.

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-1060-NC, P.O. Box 31850, Baltimore, Maryland 
21207-8850

    If you prefer, you may deliver your written comments (one original 
and three copies) to one of the following addresses:

Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, D.C. 20201, or
Room C5-16-03, 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 and address 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-1060-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 443/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).

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

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I. Background

    Section 1861(v)(1)(A) of the Social Security Act (the Act) 
authorizes the Secretary to establish limitations on allowable costs 
incurred by a provider of services that may be paid under the Medicare 
program, based on estimates of the costs necessary for the efficient 
delivery of needed health services. Under this authority, we have 
maintained limitations on home health agency (HHA) costs since 1979. 
Additional statutory provisions specifically governing the limitations 
applicable to HHAs are contained at section 1861(v)(1)(L) of the Act.
    On October 21, 1998, the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act (OCESAA), 1999 (Public Law 105-277) was 
signed into law. Section 5101 of OCESAA amended section 1861(v)(1)(L) 
of the Act by providing for adjustments to the per-beneficiary and per-
visit limitations for cost reporting periods beginning on or after 
October 1, 1998. Program Memoranda (Transmittal) Nos. A-98-38 and A-99-
1 were issued in November 1998 and January 1999, respectively, 
outlining the specific provisions affecting the Interim Payment System 
(IPS). We had published a notice with comment period establishing the 
cost limitations for cost reporting periods beginning on or after 
October 1, 1998 in the Federal Register that was entitled ``Medicare 
Program; Schedules of Per-Visit and Per-Beneficiary Limitations on Home 
Health Agency Costs for Cost Reporting Periods Beginning On or After 
October 1, 1998'' (HCFA-1035-NC) on August 11, 1998 (63 FR 42912). 
OCESAA made the following adjustments to these limitations:
    Providers with a 12-month cost reporting period ending during 
Fiscal Year (FY) 1994, whose per-beneficiary limitations were less than 
the national median, which is to be set at 100 percent for comparison 
purposes, will get their current per-beneficiary limitation plus \1/3\ 
of the difference between their rate and the adjusted national median 
per-beneficiary limitation. New providers or providers without a 12-
month cost reporting period ending in Federal Fiscal Year (Federal FY) 
1994 whose first cost reporting period begins before October 1, 1998 
will receive 100 percent of the national median per-beneficiary 
limitation.
    New providers whose first cost reporting periods begin during 
Federal FY 1999 will receive 75 percent of the national median per-
beneficiary limitation as published in the August 11, 1998 notice. In 
the case of a new provider or a provider that did not have a 12-month 
cost reporting period ending during Federal FY 1994 that filed an 
application for HHA provider status before September 15, 1998 or that 
was approved as a branch of its parent agency before that date and 
becomes a

[[Page 42767]]

subunit of the parent agency or a separate freestanding agency on or 
after that date, the per-beneficiary limitation will be set at 100 
percent of the national median. The per-visit limitation effective for 
costreporting periods beginning on or after October 1, 1998 is set at 
106 percent of the median instead of 105 percent of the median, as 
previously required in the Balanced Budget Act of 1997 (BBA) (Public 
Law 105-33), enacted on August 5, 1997.
    There is contingency language for the home health prospective 
payment system (PPS) provided in the BBA that was also amended by 
section 5101 of OCESAA. If the Secretary for any reason does not 
establish and implement the PPS for home health services, the Secretary 
will provide for a reduction by 15 percent to the per-visit cost limits 
and per-beneficiary limits, as those limits would otherwise be in 
effect on September 30, 2000.
    Section 1861(v)(1)(L)(i)(V) of the Act specifies that the per-visit 
limits shall not exceed 106 percent of the median of the labor-related 
and nonlabor per-visit costs for freestanding HHAs. The reasonable 
costs used in the per-visit calculations will be updated by the home 
health market basket reduced by 1.1 percentage points as required by 
section 1861(v)(1)(L)(ix) of the Act and excluding any change 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 as required by 
section 1861(v)(1)(L)(iv) of the Act.
    Section 1861(v)(1)(L)(v)(I) of the Act requires the per-beneficiary 
annual limitation be a blend of (1) an agency-specific per-beneficiary 
limitation based on 75 percent of 98 percent of the reasonable costs 
(including nonroutine medical supplies) for the agency's 12-month cost 
reporting period ending during Federal FY 1994, and (2) a census region 
division per-beneficiary limitation based on 25 percent of 98 percent 
of the regional average of these costs for the agency's census division 
for cost reporting periods ending during FY 1994, standardized by the 
hospital wage index. However, section 1861(v)(1)(L)(viii)(I) of the Act 
provides that if the per-beneficiary limitation imposed under this 
section of the Act is less than the median described under section 
1861(v)(1)(L)(vi)(I) of the Act (but determined as if any reference 
under section 1861(v)(1)(L)(v) of the Act to ``98 percent'' were a 
reference to ``100 percent''), the per-beneficiary limitation imposed 
under section 1861(v)(1)(L)(v) will be increased by \1/3\ of this 
difference. The reasonable costs used in the per-beneficiary limitation 
calculations in (1) and (2) above will be updated by the home health 
market basket reduced by 1.1 percentage points and 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 as 
required by sections 1861(v)(1)(L)(ix) and (iv) of the Act 
respectively. This per-beneficiary limitation based on the blend of the 
agency-specific and census region division per-beneficiary limitations 
will then be multiplied by the agency's unduplicated census count of 
beneficiaries (entitled to benefits under Medicare) to calculate the 
HHA's aggregate per-beneficiary limitation for the cost reporting 
period or portion of cost reporting period subject to the limitation.
    Section 1861(v)(1)(L)(viii)(II) provides that for new providers and 
providers without a 12-month cost reporting period ending in Federal FY 
1994 but for which the first cost reporting period begins before 
Federal FY 1999, the per-beneficiary limitation will be a national per-
beneficiary limitation that will be determined as if any reference to 
98 percent were a reference to 100 percent. The national per-
beneficiary limitation is defined in section 1861(v)(1)(L)(vi) of the 
Act.
    For new providers for which the first cost reporting period begins 
during or after Federal FY 1999 as defined in section 
1861(v)(1)(L)(viii)(III) of the Act, the per-beneficiary limitation 
will be equal to 75 percent of the national per-beneficiary limitation.
    In the case of a new provider or a provider without a 12-month cost 
reporting period ending in FY 1994, section 1861(v)(1)(L)(viii)(II) 
shall apply to an HHA that filed an application for HHA provider status 
under Medicare before September 15, 1998 or that was approved as a 
branch of its parent agency before that date and becomes a subunit of 
the parent agency or a separate agency on or after that date.
    Payments by Medicare under this system of payment limitations must 
be the lower of an HHA's actual reasonable allowable costs, per-visit 
limitations in the aggregate, or a per-beneficiary limitation in the 
aggregate.
    Section 1895(a) of the Act, as amended by OCESAA, requires the 
Secretary to provide for payments for home health services in 
accordance with a PPS for cost reporting periods and portions of cost 
reporting periods beginning on or after October 1, 2000. This, in 
effect, will result in a dual payment system for agencies with cost 
reporting periods spanning both Federal FY 2000 and Federal FY 2001. 
Section 5101(e) of OCESAA also amended the contingency clause in 
section 4603(e) of the BBA, whereby, if the Secretary does not 
establish and implement the home health PPS, the per-visit and per-
beneficiary limitations in effect on September 30, 2000 will be reduced 
by 15 percent and applied to portions of cost reporting periods 
beginning on or after October 1, 2000.
    Whether there is a home health PPS or a continuation of the IPS on 
or after October 1, 2000, agencies will need to separately aggregate 
visits and the unduplicated census count for services furnished before 
and after October 1, 2000. These statistics will be needed in order to 
recalculate the appropriate Medicare liability on the Medicare cost 
report. The visits and unduplicated census counts for home health 
services furnished on or after October 1, 1999 and before October 1, 
2000 will have the per-visit and per-beneficiary limitations updated to 
the end of the agency's cost reporting period applied. For services 
furnished after October 1, 2000, the agency will be paid either under 
the home health PPS or the per-visit and per-beneficiary limitations 
set forth in this notice less 15 percent. We will be modifying our 
Provider Statistical and Reimbursement Report (PS & R), which is used 
by our contractors for verifying statistical data used for the payment 
of Medicare services, to accommodate the change from IPS to PPS or IPS 
to a reduced IPS effective October 1, 2000.
    This notice with comment period sets forth cost limitations for 
cost reporting periods beginning on or after October 1, 1999 and 
portions of cost reporting periods beginning before October 1, 2000. 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 
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 available final hospital 
wage index, that is, the preclassified hospital wage index effective 
for hospital discharges on or after March 1, 1999, which uses data from 
Medicare cost reports for cost reporting periods beginning in FY 1995. 
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 Board (MGCRB) under section 
1886(d)(10) of the Act, or decisions by the Secretary.

[[Page 42768]]

II. Analysis of and Responses to Public Comments to the August 11, 
1998 Per-Visit and Per-Beneficiary Limitations Notice

    We received nine items of timely correspondence on the August 11, 
1998 notice. The comments pertaining to the per-visit and per-
beneficiary limitations and our responses are discussed below.
    Comment: Commenters recommended that we explain specifically and 
provide an example of how we envision prorating the unduplicated census 
count between agencies for a beneficiary that receives services from 
multiple agencies with different fiscal year ends.
    Response: In the final rule with comment period entitled ``Schedule 
of Per-Beneficiary Limitations on Home Health Agency Costs for Cost 
Reporting Periods Beginning on or After October 1, 1997'' published in 
the Federal Register on March 31, 1998 (63 FR 15718), we specifically 
stated, ``The per-beneficiary limitation will be prorated based on a 
ratio of the number of visits furnished to the individual beneficiary 
by the HHA during its cost reporting period to the total number of 
visits furnished by all HHAs to that individual beneficiary during the 
same period.'' (63 FR 15727) The number of agencies providing visits to 
the beneficiary is irrelevant. It is the total number of visits the 
beneficiary receives by all agencies during the specified agency's cost 
reporting period that triggers whether proration is required. What 
point the other agencies are in their cost reporting period does not 
enter into the computation. However, the total number of visits could 
be different for each agency because of their individual cost reporting 
periods.
    Comment: Commenters encouraged us to explain how the data needed 
for proration will be gathered and made available to intermediaries and 
providers.
    Response: The requirement to prorate the per-beneficiary limitation 
when a beneficiary receives home health services from multiple agencies 
is statutory. Due to other systems priorities for compliance with Y2K, 
we are unable to make the necessary changes in our systems to 
accommodate the data needed to do proration at a national level. That 
does not, however, preclude contractors from making the necessary 
adjustments for proration within their current operating systems.
    Comment: Commenters stated that it is unclear in the Federal 
Register when and under what circumstances the intermediaries are to 
apply the Offset Adjustment for the Implementation of the Home Health 
Outcome Assessment Information (OASIS) adjustment factor. Commenters 
questioned whether the intermediaries should apply the adjustment 
factor immediately and across the board to all agencies that request 
the adjustment factor, or upon instructions from HCFA.
    Response: In the August 11, 1998 Federal Register (63 FR 42916), we 
specifically state that the OASIS adjustment will only apply to the 
labor component of the specified per-visit limitations in the first 
year of implementation of a new assessment tool. See section III.F of 
this notice with comment period regarding our overall application of 
the OASIS adjustment.
    Comment: Commenters recommended that we clarify whether the option 
for being classified as an ``old'' or ``new'' provider applies to 
merged providers whose per-beneficiary limitation is based on a weight-
average. Commenters also recommend that we clarify whether the option 
will be extended to HHAs that undergo similar mergers or 
consolidations, including changes in status and ownership, after the 
October 1, 1998 notification deadline.
    Response: Agencies that experienced certain changes in status were 
given the option to apply the provisions in the March 31, 1998 Federal 
Register or the provisions in the August 11, 1998 Federal Register up 
to the October 1, 1998 notification deadline. The option mainly 
impacted those agencies that may have been classified as new providers 
subject to the national per-beneficiary limitation. However, old 
providers that merged after the cost reporting period ending during 
Federal FY 1994 will be treated the same under this August 11, 1998 
provision. That is, the surviving provider number will dictate the per-
beneficiary limitation that will be applied to the merged agencies for 
all mergers after October 1, 1998.
    Comment: Commenters stated that some intermediaries for hospital-
based agencies have yet to notify providers of their per-beneficiary 
amounts or unduplicated census counts. The per-beneficiary amount and 
unduplicated census count are important factors that enable providers 
to make informed decisions regarding the providers' requests to change 
their provider status. Therefore, commenters recommended that we 
consider extending the deadline for HCFA notifying providers of their 
decision to its end of the comment period (October 13, 1998).
    Response: We do not believe it is necessary to extend the 
notification deadline. Considering the importance of the per-
beneficiary limitations on an agency's financial needs, the 
notification deadline of October 1, 1998 provided agencies adequate 
time to assess the impact of the earlier provisions relating to new 
provider status and make the election if warranted.
    Comment: Commenters disagreed with our position that providers may 
not request exceptions to their per-beneficiary amounts. Commenters 
believed that we acknowledge that there will be valid circumstances not 
anticipated by the per-visit limitation methodology that will cause an 
agency to incur cost in excess of that allowed by the per-visit 
limitation. Commenters stated that we provide ``atypical'' home health 
service exceptions for those unique situations through 42 CFR 
413.30(f)(1). Therefore, it appears that, since the statute is silent 
on the matter of exceptions, we have the discretion to extend 
authorization for exceptions of the per-beneficiary limitations.
    Response: We do not agree. Section 1861(v)(1)(L)(ii) of the Act 
specifically provides for exemptions and exceptions to the per-visit 
limitations so deemed by the Secretary. As we stated in the March 31, 
1998 Federal Register, we do not believe that the Congress intended the 
general rules at Sec. 413.30 to apply to the establishment of the per-
beneficiary limitations. The statute does not provide any such 
exceptions or exemptions to the per-beneficiary limitations.
    Comment: A commenter stated that the limits as published used the 
wrong wage indices. Section 1861(v)(1)(L)(iii) of the Act requires the 
use of the most recently published hospital wage index, which would be 
the hospital wage indices published in the final rule entitled 
``Changes to the Hospital Inpatient Prospective Payment Systems and 
Fiscal Year 1999 Rates'' Federal Register on July 31, 1998 (63 FR 
40954).
    Response: The statute requires us to use the most recent available 
area wage indices applicable under section 1886(d)(3)(E) of the Act to 
establish the limitations, which will be those indices that have been 
published and in effect for hospitals. The wage indices published in 
the Federal Register on July 31, 1998 were not effective under section 
1886(d)(3)(E) of the Act until October 1, 1998. Therefore, when the 
home health limitations were published, the wage indices in effect for 
hospitals were those published in August, 1997 and effective October 1, 
1997. Therefore, we believe the wage indices published for HHAs are in 
accordance with the statute.
    Comment: Commenters recommended that the Medicare cost report and 
the Payment Statistical and Reimbursement report should be changed to

[[Page 42769]]

accommodate the requirement to use the wage index that corresponds to 
the location where the home health service is furnished.
    Response: Both the Medicare cost report and the Payment Statistical 
and Reimbursement report have been modified to accommodate the site-of-
service requirement for applying the wage index.
    Comment: Commenters believed it is our intent to allow retroactive 
application of the August 11, 1998 new and old agency provisions to 
both Federal FY 1998 and 1999 cost reports.
    Response: Before October 1, 1998, providers will have the option of 
being paid as either an ``old'' or ``new'' agency when the surviving 
provider number had a 12-month cost reporting period ending in Federal 
FY 1994. After October 1, 1998, providers will be paid on the basis of 
being an ``old'' provider only if the surviving provider number had a 
12-month cost reporting period ending in Federal FY 1994. Providers 
will no longer have the option of being ``old'' or ``new'' after 
October 1, 1998.
    Comment: Commenters stated that the failure to consider the effects 
of proration on the calculation on the per-beneficiary limitations is 
questionable. If proration of the per-beneficiary limitation is to be 
applied to cost reporting periods covered by the interim payment 
system, proration must be considered in the calculation of the per-
beneficiary limitation.
    Response: During the period used for establishing the per-
beneficiary limitations, proration of the unduplicated census count was 
not required. As we stated in the August 11, 1998 Federal Register, the 
proration as specified in the statute applies to the application of the 
per-beneficiary limitation and not the calculation of the per-
beneficiary limitation. The methodology for establishing the per-
beneficiary limitations in the statute could have specifically 
incorporated a proration provision in the methodology, but it did not.
    Comment: Commenters stated that an HHA that was required to file 
two partial year cost reports during Federal FY 1994 solely due to the 
fact that it was located in a State where it was forced to change 
fiscal intermediaries should be considered an ``old clause v'' 
provider. For example, an HHA operating for several years as a 
hospital-based HHA has the hospital cease operations during Federal FY 
1994. The HHA continues operations under the same ownership as a 
freestanding entity and later experiences a change in ownership. Due to 
the State where the HHA is located, the HHA was required to change to a 
new fiscal intermediary and the partial year cost reports were required 
to be filed. If the HHA were located in a different State, a change in 
fiscal intermediary would not have occurred.
    Response: Section 1861(v)(1)(L)(vi)(I) of the Act requires that for 
new providers and those providers without a 12-month cost reporting 
period ending in FY 1994, the per-beneficiary shall equal the median of 
those limitations applied to old providers. The situation described in 
the comment is a provider with less than a 12-month cost reporting 
period. The provider does not meet the statutory requirements for 
treatment as an ``old clause v'' provider.
    Comment: Commenters believed that the OASIS adjustment should not 
be phased out after 1 year. They recommended that we should clarify the 
start and end dates for the OASIS adjustment and consider extending the 
adjustment until cost limits can adequately account for the costs 
associated with complying with OASIS requirements.
    Response: We recognize there are various costs associated with 
complying with OASIS reporting requirements. There are one-time costs 
as described in the August 11, 1998 Federal Register that include 
training of data entry staff, telephone installation, and other costs 
associated with setting up OASIS. There are also ongoing OASIS costs 
that include audits to ensure data accuracy, data entry, editing and 
auditing, supplies, and telephone costs. We have broken these costs 
down to the various elements and have grouped the costs into various 
categories. See section III. F of this notice on how these costs are 
broken down and the various time frames associated with adjusting the 
per-visit limitations for these costs.
    Comment: The commenters believed that the OASIS adjustment should 
encompass the full range of costs associated with OASIS implementation.
    Response: We agree that any adjustment derived for OASIS should 
encompass the full range of reasonable costs associated with each 
necessary expenditure. Section III. F of this notice, fully explains 
the adjustments to the per-visit limitations for the costs associated 
with the OASIS requirement.
    Comment: The commenters believed that the OASIS adjustment should 
apply to both the per-visit and per-beneficiary limitations. This 
adjustment could possibly be included in the market basket index used 
to update the per-beneficiary limitations for new and old providers.
    Response: As we stated in the Federal Register dated August 11, 
1998 (63 FR 42920), the statute requires the per-beneficiary 
limitations to be based upon the costs incurred during a particular 
base year, the Federal FY 1994, and does not contemplate adjustments 
due to costs incurred subsequent to the base year.

III. Update of Per-Visit Limitations

    The methodology used to develop the schedule of per-visit 
limitations in this notice is the same as that used in setting the 
limitations effective October 1, 1998. We are using the latest settled 
cost report data from freestanding HHAs to develop the per-visit cost 
limitations. We have updated the per-visit cost limitations to reflect 
the expected cost increases between the cost reporting periods in the 
database and September 30, 2000 by the home health market basket 
reduced by 1.1 percentage points as required by section 
1861(v)(1)(L)(ix) of the Act, and 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 as required by section 
1861(v)(1)(L)(iv) of the Act.

A. Data Used

    To develop the schedule of per-visit limitations effective for cost 
reporting periods beginning on or after October 1, 1999, we extracted 
actual cost per-visit data from the most recent settled Medicare cost 
reports for periods beginning on or after October 1, 1994 and settled 
by March 1999. The majority of the cost reports were from Federal FY 
1996. We then adjusted the data using the latest available market 
basket indices to reflect expected cost increases occurring between the 
cost reporting periods contained in our database and September 30, 
2000, reduced by 1.1 percentage points as required by section 
1861(v)(1)(L)(ix) of the Act and 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 as required by section 
1861(v)(1)(L)(iv) of the Act.

B. Wage Index

    A wage index is used to adjust the labor-related portion of the 
per-visit limitation to reflect differing wage levels among areas. In 
establishing the per-visit limitation, we used the FY 1999 hospital 
wage index effective for hospital discharges on or after March 1, 1999, 
which is based on 1995 hospital wage data.
    Each HHA's labor market area is determined based on the definitions 
of

[[Page 42770]]

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 most recently published hospital wage index 
(that is, the FY 1999 hospital wage index, which was published in the 
Federal Register on February 25, 1999 (63 FR 9378)) without regard to 
whether those hospitals have been reclassified to a new geographic 
area, to establish the HHA cost limitations. Therefore, the schedule of 
per-visit limitations reflects the MSA definitions that are currently 
in effect under the hospital PPS.
    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 entitled ``Schedule of Limits on 
Home Health Agency Costs Per Visit'' (57 FR 29410). These exceptions 
have been recognized in setting hospital cost limitations 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 (Public Law 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 purposes of the hospital PPS. This provision is 
intended to ensure equitable treatment under the hospital PPS. Under 
this authority, the following counties have been deemed to be urban 
areas for purposes of payment under the inpatient hospital prospective 
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 Fall-Warwick, RI MSA

    We are continuing to grant these urban exceptions for the purpose 
of applying the Medicare hospital wage index to the HHA per-visit 
limitations. These exceptions result in the same New England County 
Metropolitan Area (NECMA) definitions for hospitals, skilled nursing 
facilities, 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, these four counties are urban under 
either definition, NECMA or MSA.
    Section 1861(v)(1)(L)(iii) requires the use of 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 without regard to whether these hospitals have 
been reclassified to a new geographic area under section 1886(d)(8)(B) 
of the Act. 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.

C. Standardization for Wage Levels

    After adjustment by the market basket index reduced by 1.1 
percentage points, as required by section 1861(v)(1)(L)(ix) of the Act, 
and 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, as required by section 1861(v)(1)(L)(iv) of the 
Act, we divided each HHA's per-visit costs into labor and nonlabor 
portions. The labor portion of cost (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 cost 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 less than $10 and per-visit costs more 
than $800, retaining only those per-visit costs within two standard 
deviations of the median in each service.

E. Basic Service Limitation

    We calculate a basic service limitation to 106 percent of the 
median labor and nonlabor portions of the per-visit costs of 
freestanding HHAs for each type of service. (See Table 6a in section 
VIII.)

F. Offset Adjustment for the Implementation of the Home Health Outcome 
Assessment Information

    In the August 11, 1998 per-visit and per-beneficiary limitations 
notice (63 FR 42912), we discussed a proposed adjustment for HHAs for 
the agency collection of OASIS data. Collecting and reporting OASIS is 
a condition of participation for HHAs who bill Medicare. As we stated 
in the August 11, 1998 notice, we believe there will be no permanent 
ongoing incremental costs associated with OASIS collection. We do, 
however, believe both one-time and ongoing costs are associated with 
reporting OASIS data. Our proposed OASIS adjustment is based on 
information from the Medicare Quality and Improvement Demonstration as 
well as OASIS demonstration data. We assume, for purposes of deriving 
the OASIS proposed adjustment, that the typical HHA has 486 admissions 
and 30,000 visits per year and an 18-person staff. OASIS reporting 
adjustments are unlike the one-time OASIS collection adjustments 
published in the August 11, 1998 Federal Register, which were based 
only on the number of skilled visits. These reporting adjustments are 
based on total Medicare visits. This adjustment factor was calculated 
by including the estimated OASIS costs in the baseline costs used to 
determine the median of the per-visit costs. The per-beneficiary 
limitation cannot be adjusted for OASIS.
    The three tables below reflect our estimates of the costs to an HHA 
for OASIS reporting for a typical agency and form the basis for the 
per-visit OASIS reporting adjustment. Those agencies that exceed the 
per-visit limit may use the tables in this notice and in our August 11, 
1998 notice to calculate an additional adjustment, over the limit, to 
account for their recurring and nonrecurring costs for OASIS collection 
and reporting. No adjustment is available for the per-beneficiary 
limit, which is set explicitly in the statute. Once the OASIS reporting 
system is fully implemented and we have gathered sufficient data, we 
plan to review the ongoing cost and time components that constitute the 
tables below.

[[Page 42771]]



                                   Table 1.--Continuous OASIS Adjustment: Base
                                              [For data reporting]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Cost per
           Type of adjustment                        Source                      Formula                visit
----------------------------------------------------------------------------------------------------------------
Audits to ensure data accuracy..........  University of Colorado       (((((10 records per month *      $.02542
                                           (CHPR), BLS Occupational     12 months)) * .25 hrs) *
                                           Employment Survey (1996),    $25.42)/30,000 avg
                                           1994 & 1995 HCFA Cost        visits)...professional
                                           Report Data.                 staff.
Data entry, editing, & auditing.........  University of                ((((8.5 hrs per month * 12)       .06
                                           Colorado(CHPR), Estimated    + (5 hrs per month * 12) +
                                           average salary for           (1 hr per month * 12) + (5
                                           clerical staff 1994 & 1995   hrs per year)) * $10 per
                                           HCFA Cost Report Data.       hour) / 30,000 avg visits).
Supplies................................  HCFA-3006-IFC OASIS          $250 avg cost/30,000 avg          .008333
                                           Reporting (64 FR 3748),      visits.
                                           1994 & 1995 HCFA Cost
                                           Report Data.
Ongoing telephone costs.................  Bell Atlantic 1994 & 1995    (((($13.14 per month, per         .007808
                                           HCFA Cost Report Data (for   line) + ($ 6.38 per month
                                           average size HHA).           subscriber fee)) * 12
                                                                        months)/30,000 avg visits).
                                                                                                   -------------
    Total...............................  ...........................  ...........................      $.101561
----------------------------------------------------------------------------------------------------------------


                      Table 2.--Continuous OASIS Adjustment: 5-Year Depreciation Averaging
                                              [For data reporting]
----------------------------------------------------------------------------------------------------------------
                                                                                                       Cost per
            Type of adjustment                        Source                      Formula               visit
----------------------------------------------------------------------------------------------------------------
Computer Hardware........................  American Hospital
                                            Association's Health Data
                                            & Coding Standards Group's
                                            ``Estimated Useful Lives
                                            of Depreciable Hospital
                                            Assets {revised 1998}
    --Computer...........................  Average cost for PC with     $2050 computer depreciated      $.022777
                                            minimal acceptable           over 3 years (($2050/3)/
                                            standards 1994 & 1995 HCFA   30,000 avg visits
                                            Cost Report Data
    --Printer............................  Average cost for printer     $600 printer cost                   .004
                                            with minimal acceptable      depreciated over 5 years
                                            standards 1994 & 1995 HCFA   (($600/5)/30,000 avg
                                            Cost Report Data             visits
                                           First 3 Year's Adjustment..  * Note: computer & printer       .026777
                                                                         depreciation.
                                           Next 2 Year's Adjustment...  * Note: printer ONLY                .004
                                                                         depreciation.
                                           5-Year Average Adjustment..  (((.026777 * 3) + (.004 *         .01766
                                                                         2))/5).
----------------------------------------------------------------------------------------------------------------


                Personal Computer Minimal Specifications
------------------------------------------------------------------------
         Description                     Minimal specifications
------------------------------------------------------------------------
Warranty.....................  Minimum 3 year.
Processor....................  Pentium II Processor running at 400Mhz w/
                                512 Cache.
Operating System.............  32-bit operating system with Graphical
                                User Interface.
Hard Drive...................  3 Gb Hard drive minimum.
Memory.......................  32Mb minimum.
CD ROM.......................  14-32X, IDE, integrated sound.
Floppy Drive.................  3.5'' 1.44Mb diskette drive.
Fax Modem....................  56K v.90 Data/Fax.
Monitor......................  17'' Color Monitor.
Graphics.....................  8Mb AGP.
Mouse........................  Wheel mouse.
Keyboard.....................  104 key ergonomic keyboard.
Anti Virus...................  Anti Virus Software.
Management Software..........  System management client software/
                                license.
Printer......................  600 dpi Laser printer with cable.
------------------------------------------------------------------------


                                    Table 3.--OASIS Adjustment: ``One-Time''
                                              [For data reporting]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Cost per
           Type of adjustment                        Source                      Formula                visit
----------------------------------------------------------------------------------------------------------------
Training of Data Entry Staff............  BLS Employer Provided        (24 hrs * $10)/30,000 avg        $.008
                                           Training (Hrs of Training    visits.
                                           [1995] & an estimated
                                           average salary for
                                           clerical personnel 1994 &
                                           1995 HCFA Cost Report Data.

[[Page 42772]]

 
Telephone installation..................  1994 & 1995 HCFA Cost        ($28 processing fee) + ($40       .002266
                                           Report Data.                 per line connect fee)/
                                                                        30,000 avg visits.
                                                                                                   -------------
  Total One Time Adjustment.............  ...........................  ...........................      $.010266
----------------------------------------------------------------------------------------------------------------

Discussion of OASIS Adjustment Tables
    These tables reflect our estimates of the costs to an HHA for 
complying with the requirement to report data using the OASIS data set. 
We are using three tables based on time parameters. Table 1 shows the 
continuous OASIS costs for an HHA that include labor costs for the 
audits that are conducted to ensure data accuracy, labor costs for data 
entry and the editing and auditing costs associated with it, costs of 
supplies, and telephone costs. We estimate these continuous OASIS costs 
to total $.101561 per visit. Table 2 shows the OASIS personal computer 
costs for those HHAs that are unable to run OASIS because they lack the 
requisite hardware needed to support automation of it. We estimate this 
percentage to be 50 percent as explained in the OASIS reporting 
regulation (HCFA-3006-IFC 64 FR 3748). These costs consist of a 
personal computer and printer as described in Table 2. For years 1 
through 3, HHAs are able to depreciate both their personal computer and 
printer. We estimate this OASIS cost to be $.0267 per visit. For years 
4 and 5, HHAs can only depreciate their printer. We estimate this OASIS 
cost to be $.004 per visit.
    In order for HHAs to keep pace with ever evolving computing 
standards, to include enhancements to computer hardware and software, 
as well as future versions of HAVEN's OASIS software, this process of 
the depreciation of computer hardware is one that would repeat itself 
every 5 years. In that vein, a yearly average computer hardware 
depreciation adjustment was computed so as to yield a continuous OASIS 
adjustment for each year. This was accomplished by multiplying the 
first 3 years' computer hardware depreciation adjustment of $.026777 by 
3, multiplying the following 2 years' computer hardware depreciation 
adjustment of $.004 by 2, summing those two factors, and dividing that 
sum by the total number of depreciable years (5) to get a yearly 
average for the computer hardware depreciation adjustment of $.01766. 
This yearly average computer hardware depreciation adjustments 
($.01766), when added to the base continuous OASIS adjustment 
($.10156), results in a total continuous OASIS adjustment of $.11916.
    Table 3 shows one-time OASIS costs (year 1) for an HHA that include 
training of data entry staff and telephone installation. We estimate 
these one-time OASIS costs to total $.0103 per visit. Any OASIS costs 
recognized under the revised per-visit limits established by this 
notice will be reflected in the budget neutral baseline for computing 
HHA prospective rates when we convert to that payment system.

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

    Section 4207(d)(2) of the Omnibus Budget Reconciliation Act of 1990 
(OBRA '90) (Public Law 101-508) requires that, in updating the wage 
index, aggregate payments to HHAs will remain the same as they would 
have been if the wage index had not been updated. Therefore, overall 
payments to HHAs are not affected by changes in the wage index values.
    To comply with the requirements of section 4207(d)(2) of OBRA '90 
that updating the wage indices be budget neutral, we determined that it 
is necessary to apply a budget neutrality adjustment factor of 1.039 to 
the labor-related portions of the per-visit and per-beneficiary 
limitations for cost reporting periods beginning on or after October 1, 
1999. This is the first year for which the per-beneficiary limitations 
have been in place long enough to be affected by an update in the wage 
indices. Because aggregate payments to HHAs encompass both the per-
visit and the per-beneficiary limitations, the budget neutrality 
adjustment factor had to be determined using both per-visit and per-
beneficiary limitations in order to comply with the OBRA '90 budget 
neutrality requirement. Therefore, overall payments to HHAs are not 
affected by changes in the wage index values as applied to the labor-
related portions of both limitations.
    To determine the budget neutrality adjustment factor, we used the 
data obtained from the 574 providers in the audited cost report data 
set developed for home health prospective payment. This sample was 
extrapolated to reflect a national total of HHAs. We believe this is 
the most current and accurate data we can obtain to reflect the effects 
of both the per-visit limits and the per-beneficiary limits. This data 
set includes a count of the number of beneficiaries served by each 
agency. This information is not available on the data set used to 
calculate the per-visit limitations. For each agency in the per-visit 
limitation database, we replaced its current wage index with the one 
corresponding to the 1982 hospital wage index. For each agency in the 
per-beneficiary limitation database, we replaced their current wage 
index with one corresponding to the 1994 hospital wage index. Some MSAs 
that currently exist did not exist at the time this index was created 
and therefore have no matching 1982 or 1994 wage index. Since the 
unmatchable MSAs represented a small percentage of the total visits in 
the databases, we deleted these agencies from the analysis. We then 
determined what Medicare program payments would be using the 1982 and 
1994 wage indices. We determined payments using the new wage index and 
adjusted the labor portion of the payment by the factor necessary to 
match program payments if the 1982 and 1994 wage indices were used with 
respect to both limitations. (See the examples in section VIII. of this 
notice regarding the adjustment of the per-visit and per-beneficiary 
limitations by the wage index and the budget neutrality adjustment 
factor.)

V. Update of the Per-Beneficiary Limitations

    The methodologies and data used to develop the schedule of per-
beneficiary limitations set forth in this notice are the same as those 
used in setting the per-beneficiary limitations that were effective for 
cost reporting periods beginning on or after October 1, 1998. We have 
updated the per-beneficiary limitations to reflect the expected cost 
increases occurring between the cost reporting periods ended during FY 
1994 and September 30, 2000, reduced by 1.1 percentage points and 
excluding any changes in the home health market

[[Page 42773]]

basket with respect to cost reporting periods that began on or after 
July 1, 1994 and before July 1, 1996.

A. Data Used

    The cost report data used to develop the schedule of per-
beneficiary limitations set forth in this notice are for cost reporting 
periods ending in Federal FY 1994, as required by section 1861(v)(1)(L) 
of the Act. We have updated the per-beneficiary limitations to reflect 
the expected cost increases occurring between the cost reporting 
periods for the data contained in the database and September 30, 2000 
reduced by 1.1 percentage points and 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 interim payment system sets limitations according to two 
different methodologies. For agencies with cost reporting periods 
ending during FY 1994, the limitation is based on 75 percent of 98 
percent of the agencies' own reasonable costs and 25 percent of 98 
percent of the average census region division costs. At the end of the 
agency's cost reporting period subject to the per-beneficiary 
limitations, the labor component of the census region division per-
beneficiary limitation is adjusted by a wage index based on where the 
home health services are furnished.
    For new providers and providers without a cost reporting period 
ending during FY 1994, the per-beneficiary limitation is based on the 
standardized national median of the blended agency-specific and census 
region division per-beneficiary limitations described above. See 
section C. below, which further defines how these limitations are 
effectuated for new providers and providers without a 12-month cost 
reporting period ending during FY 1994. This is done by arraying the 
agencies' per-beneficiary limitations and selecting the median case. 
The national per-beneficiary limitation is then standardized for the 
effect of the wage index. The wage index is applied to the labor 
component of the national per-beneficiary limitation at the end of the 
cost reporting period beginning on or after October 1, 1999 and is 
based on where the home health services are furnished.

B. Wage Index

    A wage index is used to adjust the labor-related portion of the 
standardized regional average per-beneficiary limitation and the 
national per-beneficiary limitation to reflect differing wage levels 
among areas. In establishing the regional average per-beneficiary 
limitation and national per-beneficiary limitation, we used the FY 1999 
hospital wage index effective with discharges on or after March 1, 
1999, which is based on 1995 hospital wage data.
    Each HHA's labor market area is determined based on the definitions 
of MSAs issued by OMB. Section 1861(v)(1)(L)(iii) of the Act requires 
us to use the current hospital wage index (that is, the FY 1999 
hospital wage index, which was published in the Federal Register on 
February 25, 1999 (63 FR 9378)), without regard to whether these 
hospitals have been reclassified to a new geographic area, to establish 
the HHA cost limitations. Therefore, the schedules of standardized 
regional average per-beneficiary limitations and the national per-
beneficiary limitation reflect the MSA definitions that are currently 
in effect under the hospital PPS.
    As we did for the per-visit limitations, 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 
limitations 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 (Public Law 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 purposes of the hospital 
PPS. This provision is intended to ensure equitable treatment under the 
hospital PPS. Under this authority, the following counties have been 
deemed to be urban areas for purposes of payment under the inpatient 
hospital prospective 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 Fall-Warwick, RI MSA.
    We are continuing to grant these urban exceptions for the purpose 
of applying the Medicare hospital wage index to the HHA standardized 
regional average per-beneficiary limitations and the national per-
beneficiary limitation. These exceptions result in the same NECMA 
definitions for hospitals, skilled nursing facilities, 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, these 
four counties are urban under either definition, NECMA or MSA.
    Section 1861(v)(1)(L)(iii) of the Act requires the use of 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 without regard to whether these 
hospitals have been reclassified to a new geographic area under section 
1886(d)(8)(B) of the Act. The wage index, as applied to the labor 
portion of the regional per-beneficiary limitation and the labor 
portion of the national per-beneficiary limitation, must be based on 
the geographic location in which the home health service is actually 
furnished.

C. New Providers and Providers Without a 12-Month Cost Reporting Period 
Ending During Federal Fiscal Year 1994

    For a new provider or a provider without a 12-month cost reporting 
period ending in FY 1994 but for which the first cost reporting period 
began before October 1, 1998, the per-beneficiary limitation will be a 
national per-beneficiary limitation, that will be equal to the median 
of these limitations applied to other HHAs without the 2 percent 
reduction.
    For a new provider whose first cost reporting period begins on or 
after October 1, 1998, the per-beneficiary limitation will be 75 
percent of the national per-beneficiary limitation including the 2 
percent reduction.
    A new provider or a provider without a 12-month cost reporting 
period ending in FY 1994, which filed an application for HHA provider 
status before September 15, 1998, or which was approved as a branch of 
its parent agency before that date and becomes a subunit of the parent 
agency or a separate agency on or after that date, will be subject to 
the national per-beneficiary limitation (without the 2 percent 
reduction).

VI. Market Basket

    The 1993-based cost categories and weights are listed in Table 4 
below.

[[Page 42774]]



 Table 4.--1993-Based Cost Categories, Basket Weights, and Price Proxies
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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.
    Movable Capital..............        0.880  PPI Machinery &
                                                 Equipment.
Other Expenses, including                5.322  CPI-U All Items Less
 allocated Contract Services\1\                  Food & Energy.
 Non-Labor.
                                  -------------
      Total......................      100.000
------------------------------------------------------------------------

VII. Update of Database

    The data used to develop the cost per-visit limitations, the census 
region per-beneficiary limitations, and the national per-beneficiary 
limitation were adjusted 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, 2000, 
reduced by 1.1 percentage points as required by section 
1861(v)(1)(L)(ix) of the Act and 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 as required by section 
1861(v)(1)(L)(iv) of the Act. The following inflation factors were used 
in calculating the per-visit limitations, the census region per-
beneficiary limitations, and national per-beneficiary limitations:

                     Table 5.--Factors for Inflating Database Dollars to September 30, 1999
                                       [Inflation adjustment factors \1\]
----------------------------------------------------------------------------------------------------------------
                    FY end                         1993       1994       1995       1996       1997       1998
----------------------------------------------------------------------------------------------------------------
October 31....................................    1.13775    1.10901    1.10487    1.10291    1.07843    1.04734
November 30...................................    1.13492    1.10771    1.10487    1.10193    1.07571    1.04500
December 31...................................    1.13210    1.10652    1.10487    1.10076    1.07305    1.04272
January 31....................................  .........    1.12929    1.10568    1.10487    1.09935    1.07042
February 28...................................  .........    1.12650    1.10519    1.10487    1.09771    1.06782
March 31......................................  .........    1.12374    1.10503    1.10487    1.09585    1.06524
April 30......................................  .........    1.12107    1.10492    1.10487    1.09381    1.06263
May 31........................................  .........    1.11850    1.10487    1.10487    1.09162    1.05999
June 30.......................................  .........    1.11604    1.10487    1.10487    1.08926    1.05732
July 31.......................................  .........    1.11388    1.10487    1.10468    1.08674    1.05472
August 31.....................................  .........    1.11202    1.10487    1.10428    1.08405    1.05219
September 30..................................  .........    1.11045    1.10487    1.10369    1.08121   1.04974
----------------------------------------------------------------------------------------------------------------
\1\ Source: The HHA Price Index, produced by HCFA. The forecasts are from Standard and Poor's DRI HCC 1st QTR
  1999;@USSIM/TREND25YR0299@CISSIM/Control 1991 forecast exercise which has historical data through 1999:1.

    Multiplying nominal dollars for a given FY end by their respective 
inflation adjustment factor will express those dollars in the dollar 
levels for the FY ending September 30, 1999.
    The procedure followed to develop these tables, based on 
requirements from BBA, 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 reduced by 1.1 percentage 
points for cost reporting periods beginning in Federal FY 2000.

A. Short Period Adjustment Factors for Cost Reporting Periods 
Consisting of Less Than 12 Months

    HHAs with cost reporting periods beginning on or after October 1, 
1999 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 FY has already begun or when a 
provider experiences a change of ownership before the end of the cost 
reporting period. The data used in calculating the limitations were 
updated to September 30, 2000. Therefore, the cost limitations 
published in this notice are for a 12-month cost reporting period 
beginning October 1, 1999 and ending September 30, 2000. For 12-month 
cost reporting periods beginning after October 1, 1999 and before 
October 1, 2000, cost reporting period adjustment factors are provided 
in Addendum 2. However, when a cost reporting period consists of

[[Page 42775]]

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 limitations to agencies with cost 
reporting periods of fewer than 12 months, we are publishing an example 
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 16th of the month, we will consider the period to have begun on the 
1st of that month. If the start of the cost reporting period begins on 
or after the 16th 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 16th 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 
16th of the month, it will be considered to have ended at the end of 
that month.
    Example: 1. After approval by its intermediary, an HHA that had a 
1994 base year changed its FY end from June 30 to December 31. Due to 
this change, the HHA had a short cost reporting period beginning on 
July 1, 2000 and ending on December 31, 2000. The cost reporting period 
ending during FY 1994 was the cost reporting period ending on June 30, 
1994. The limitations that apply to this short period must be adjusted 
as follows:
    Step 1--From Addendum 3, sum the index levels for the months of 
July 2000 through December 2000: 6.89916
    Step 2--Divide the results from Step 1 by the number of months in 
short period: 6.899166=1.14986
    Step 3--From Addendum 3, sum the index levels for the months in the 
common period of October 1999 through September 2000: 13.6905
    Step 4--Divide the results in Step 3 by the number of months in the 
common period: 13.6905  x  12 = 1.140875
    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 per-visit 
and per-beneficiary limitations: 1.14986  x  1.140875 = 1.00788
    Step 6--Apply the results from Step 5 to the published limitations. 
For example:

a. Urban skilled nursing per-visit labor portion
    $78.07  x  1.00788 = $78.69
b. Urban skilled nursing per-visit nonlabor portion
    $22.45  x  1.00788 = $22.63
c. West South Central Census region division labor portion per-
beneficiary limitation
    $4,667.91  x  1.00788 = $4,704.69
d. West South Central Census region division nonlabor portion per-
beneficiary limitation
    $1,342.17  x  1.0788 = $1,447.93

    Step 7--Also apply the results from Step 5 to the calculated 
agency-specific per-beneficiary amount that has been updated to 
September 30, 2000 using Table 2.

B. Adjustment Factor for Reporting Year Beginning After October 1, 1999 
and Before October 1, 2000

    If an HHA has a 12-month cost reporting period beginning on or 
after November 1, 1999, the per-visit limitation and the adjusted 
census region division per-beneficiary limitation and the agency-
specific per-beneficiary limitation or the adjusted national per-
beneficiary limitations are again revised by an adjustment factor from 
Addendum 2 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 reduced by 1.1 percentage points as required by 
section 1861(v)(1)(L)(ix) of the Act and 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 as required by 
section 1861(v)(1)(L)(iv) of the Act and is used to account for 
inflation in costs that will occur after the date on which the per-
beneficiary limitations become effective.
    In adjusting the agency-specific per-beneficiary limitation for the 
market basket increases since the end of the cost reporting period 
ending during Federal FY 1994, the intermediary will increase the 
agency-specific per-beneficiary limitation to September 30, 2000. That 
way when the limitations need to be further adjusted for the cost 
reporting period, all elements of the limitation calculations can be 
adjusted by the same factor. For example, if an HHA is providing 
services in the Dallas MSA only and has a cost reporting period 
beginning January 1, 2000, its occupational therapy per-visit 
limitation and its per-beneficiary limitation would be further adjusted 
as follows:

  Computation of Revised Per-Visit Limitations for Occupational Therapy
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Adjusted per-visit limitation..............................      $113.24
Adjustment factor from Addendum 2..........................      1.00394
Revised per-visit limitation...............................     $113.69
------------------------------------------------------------------------
\1\ Adjusted by appropriate wage index applicable to the Dallas MSA and
  the budget neutrality adjustment factor of 1.039.


  Computation of Revised Per-Beneficiary Limitations for an HHA With a
                            1994 Base Period
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Agency-specific component inflated through December 31,        $4,086.60
 2000: $5,560.00  x  .98  x  .75...........................
West south central division component: $5,886.10 \1\  x      \1\ $1,442.
 .98  x  .25...............................................          091
Blended per-beneficiary limitation for Dallas-MSA..........    $5,528.69
Adjustment factor from Addendum 2..........................      1.00394
Adjusted blended per-beneficiary limitation for Dallas MSA.   $5,550.47
------------------------------------------------------------------------
\1\ Adjusted by the appropriate wage index applicable to the Dallas MSA
  and the budget neutrality factor of 1.039.


  Computation of Revised Per-Beneficiary Limitation for a New Provider
  Whose First Cost Reporting Period Began Before October 1, 1997 in the
                               Dallas MSA
------------------------------------------------------------------------
 
------------------------------------------------------------------------
National per-beneficiary limitation for Dallas MSA \1\.....  \1\ $3,513.
                                                                      73
Adjustment factor from Addendum 2..........................      1.00394
Adjusted national per-beneficiary limitation...............   $3,527.57
------------------------------------------------------------------------
\1\ From Table 6C Adjusted by the appropriate wage index applicable to
  the Dallas MSA and the budget neutrality factor of 1.039.

VIII. Schedules of Per-Visit and Per-Beneficiary Limitations

    The schedules of limitations set forth below apply to cost 
reporting periods beginning on or after October 1, 1999. The 
intermediaries will compute the adjusted limitations using the wage 
indicies published in Addenda 1a and 1b for each MSA and non-MSA for 
which the HHA provides services to Medicare beneficiaries. The 
intermediary will notify each HHA it services of its applicable 
limitations for the area(s) where the HHA furnishes HHA services to 
Medicare beneficiaries. Each HHA's aggregate limitations cannot be 
determined prospectively but depend on each HHA's Medicare utilization 
(visits and unduplicated

[[Page 42776]]

census count) by location of the HHA services furnished for the cost 
reporting periods subject to this document.
    Section 1861(v)(1)(L)(vi)(II) of the Act requires the per-
beneficiary limitations to be prorated among HHAs for Medicare 
beneficiaries who use services furnished by more than one HHA. The per-
beneficiary limitation will be prorated based on a ratio of the number 
of visits furnished to the individual beneficiary by the HHA during its 
cost reporting period to the total number of visits furnished by all 
HHAs to that individual beneficiary during the same period.
    The proration of the per-beneficiary limitation will be done based 
on the fraction of services the beneficiary received from the HHA. For 
example, if an HHA furnished 100 visits to an individual beneficiary 
during its cost reporting period ending September 30, 2000, and that 
same individual received a total of 400 visits during that same period 
from that and other agencies, the HHA would count the beneficiary as a 
.25 unduplicated census count of Medicare patients for the cost 
reporting period ending September 30, 2000.
    The HHA costs that are subject to the per-visit limitations include 
the cost of medical supplies routinely furnished in conjunction with 
patient care. Durable medical equipment, orthotic, prosthetic, 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 the per-visit schedule of limitations. (See Chapter 
IV of the Home Health Agency Manual (HCFA Pub. II).)
    The HHA costs that are subject to the per-beneficiary limitations 
include the costs of medical supplies routinely furnished and 
nonroutine medical supplies furnished in conjunction with patient care. 
Durable medical equipment directly identifiable as services to an 
individual patient is excluded from the per-beneficiary limitations and 
is paid without regard to this schedule of per-beneficiary limitations.
    The intermediary will determine the aggregate limitations for each 
HHA according to the location where the services are furnished by the 
HHA. Medicare payment is based on the lower of the HHA's total 
allowable Medicare costs plus the allowable Medicare costs of 
nonroutine medical supplies, the aggregate per-visit limitation plus 
the allowable Medicare costs of nonroutine medical supplies, or the 
aggregate per-beneficiary limitation. An example of how the aggregate 
limitations are computed for an HHA providing HHA service to Medicare 
beneficiaries in both Dallas, Texas, and rural Texas is as follows:
    Example: HHA X, an HHA located in Dallas, TX, has 11,550 skilled 
nursing visits, 4,300 physical therapy visits, 8,900 home health aide 
visits and an unduplicated census count of 400 Medicare beneficiaries 
in the Dallas MSA and 5,000 skilled nursing visits, 2,300 physical 
therapy visits, 4,300 home health aide visits, and an unduplicated 
census count of 200 Medicare beneficiaries in rural Texas during its 
12-month cost reporting period ending September 30, 2000. The 
unadjusted agency-specific per-beneficiary amount for the base period 
(cost reporting period ending September 30, 1994) is $4,825.00. The 
aggregate limitations are calculated as follows:

                              Determining the Aggregate Per-Beneficiary Limitation
----------------------------------------------------------------------------------------------------------------
                                                                                       Unduplicated
                                                                                       census count   Total per-
                MSA/Non-MSA area                      Per-beneficiary limitation       of Medicare   beneficiary
                                                                                      beneficiaries   limitation
----------------------------------------------------------------------------------------------------------------
Dallas, TX......................................  ($4,825.00  x  1.11045  x  .98  x            400    $2,152,064
                                                   .75) plus (($4,667.91  x  .9369
                                                   x  1.039) plus $1,342.17))  x
                                                   .98  x  .25.
Rural, TX.......................................  ($4,825.00  x  1.11045 .98  x                200     1,033,162
                                                   .75) plus (($4,667.91  x  .7565
                                                   x  1.039) plus 1,342.17))  x  .98
                                                    x  .25.
Aggregate Limitation............................  ..................................  .............    3,185,226
----------------------------------------------------------------------------------------------------------------


             Determining the Aggregate Per-Visit Limitation
------------------------------------------------------------------------
                                    Number of    Per-visit
        Area/Type of visit            visits     limit \1\   Total limit
------------------------------------------------------------------------
Dallas-MSA:
    Skilled nursing..............       11,550      $ 98.45   $1,137,098
    Physical therapy.............        4,300       112.84      485,212
    Home health aide.............        8,900        45.36      403,704
Rural Texas:
    Skilled nursing..............        5,000        92.33      461,650
    Physical therapy.............        2,300       105.71      243,133
    Home health aide.............        4,300        38.80      166,840
Aggregate limitation.............  ...........  ...........  $2,897,637
------------------------------------------------------------------------
\1\ The per-visit has been adjusted by the appropriate wage index and
  the budget neutrality adjustment factor of 1.039.

    For the cost reporting period ending September 30, 2000, the HHA 
incurred $2,935,500 in Medicare costs for the discipline services and 
$335,000 for the costs of Medicare nonroutine medical supplies. 
Medicare reimbursement for this HHA would be $3,185,226, which is the 
lesser of the actual costs of $2,935,500 plus the costs of nonroutine 
medical supplies of $335,000 or the aggregate per-visit limitation of 
$2,897,637 plus the costs of nonroutine medical supplies of $335,000 or 
the aggregate per-beneficiary limitation of $3,185,226.
    Before the limitations are applied during settlement of the cost 
report, the HHA's actual costs are reduced by the amount of individual 
items of costs (for example, administrative compensation and contract 
services) that are found to be excessive under the Medicare principles 
of provider payment. That is,

[[Page 42777]]

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 (see 
Sec. 413.106) and the limitation on costs that are substantially out of 
line with those of comparable HHAs (see Sec. 413.9).

                    Table 6a.--Per-Visit Limitations
------------------------------------------------------------------------
                                    Per-Visit      Labor       Nonlabor
          Type of visit             limitation    portion    Portion \1\
------------------------------------------------------------------------
MSA (NECMA) location:
    Skilled nursing care.........      $100.52       $78.07       $22.45
    Physical therapy.............       115.22        89.49        25.73
    Speech therapy...............       116.71        90.65        26.06
    Occupational therapy.........       115.63        89.81        25.82
    Medical social services......       140.99       109.51        31.49
    Home health aide.............        46.32        35.98        10.34
NonMSA location:
    Skilled nursing care.........       110.74        86.01        24.73
    Physical therapy.............       126.78        98.47        28.31
    Speech therapy...............       132.64       103.02        29.62
    Occupational therapy.........       132.12       102.61        29.50
    Medical social services......       173.67       134.89        38.78
    Home health aides............        46.53        36.14        10.39
------------------------------------------------------------------------
\1\ Nonlabor portion of per-visit limitations for HHAs located in
  Alaska, Hawaii, Puerto Rico, and the Virgin Islands is increased by
  multiplying it by the following cost-of-living adjustment factors.


------------------------------------------------------------------------
                                                              Adjustment
                          Location                              factor
------------------------------------------------------------------------
Alaska.....................................................        1.250
Hawaii:
    County of Honolulu.....................................        1.250
    County of Hawaii.......................................        1.150
    County of Kauai........................................        1.225
    County of Maui.........................................        1.225
    County of Kalawao......................................        1.225
Puerto Rico................................................        1.100
Virgin Islands.............................................        1.200
------------------------------------------------------------------------


   Table 6b.--Standardized Per-Beneficiary Limitation by Census Region
                        Division, Labor/Nonlabor
------------------------------------------------------------------------
                                                   Labor       Nonlabor
            Census region division               component    component
------------------------------------------------------------------------
New England (CT, ME, MA, NH, RI, VT)..........    $2,797.47      $804.37
Middle Atlantic (NJ, NY, PA)..................     2,073.06       596.06
South Atlantic (DE, DC, FL, GA, MD, NC, SC,        3,127.39       899.23
 VA, WV)......................................
East North Central (IL, IN, MI, OH, WI).......     2,535.84       729.14
East South Central (AL, KY, MS, TN)...........     4,808.31     1,382.55
West North Central (IA, KS, MN, MO, NE, ND,        2,435.65       700.32
 SD)..........................................
West South Central (AR, LA, OK, TX)...........     4,667.91     1,342.17
Mountain (AZ, CO, ID, MT, NV, NM, UT, WY).....     3,076.15       884.49
Pacific (AK, CA, HI, OR, WA)..................     2,383.02       685.20
------------------------------------------------------------------------


 Table 6c.\1\--Standardized Per-Beneficiary Limitation for New Agencies
  and Agencies Without a 12-month Cost Report Ending During FY 1994 for
       Which the First Cost Reporting Began Before October 1, 1998
------------------------------------------------------------------------
                                                   Labor       Nonlabor
                                                 component    component
------------------------------------------------------------------------
National......................................    $2,786.53      $801.21
------------------------------------------------------------------------
\1\ This is the national rate set at 100 percent.


Table 6d.\2\--Standardized Per-Beneficiary Limitations for New Providers
 for Which the First Cost Reporting Period Begins on or After October 1,
                                  1998
------------------------------------------------------------------------
                                                   Labor       Nonlabor
                                                 component    component
------------------------------------------------------------------------
National......................................    $2,048.10      $588.89
------------------------------------------------------------------------
\2\ This is the national rate set at 75 percent of 98 percent of Table
  6c.


 Table 6e.--Standardized Per-Beneficiary Limitations for Puerto Rico and
                                  Guam
------------------------------------------------------------------------
                                                   Labor       Nonlabor
                                                 component    component
------------------------------------------------------------------------
Puerto Rico...................................    $2,030.66      $583.88
Guam..........................................     1,962.40       564.25
------------------------------------------------------------------------

IX. Regulatory Impact Statement

A. Introduction

    We have examined the impacts of this notice with comment as 
required by Executive Order 12866, the Regulatory Flexibility Act (RFA) 
(Pub. L. 96-354), and the Unfunded Mandates Reform Act

[[Page 42778]]

of 1995 (Pub. L. 104-4). 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).
    For purposes of the RFA, small entities include small business as 
defined under the Small Business Administration, nonprofit 
organizations, and small governmental jurisdictions. Most HHAs are 
considered small entities either by nonprofit status or by meeting the 
Small Business Administration's standard for a small business (annual 
revenues of $5 million or less) .
    Table 7 illustrates the Distribution of HHAs by type participating 
in Medicare as of April 13, 1999.

                Table 7.--Number of HHAs by Provider Type
------------------------------------------------------------------------
                     HHA provider type                          Number
------------------------------------------------------------------------
Visiting Nurse Association.................................          484
Combination Gov't and Voluntary............................           34
Official Health Agency.....................................         1067
Rehab Facility-Based.......................................            2
Hospital-Based.............................................         2486
Skilled Nursing Facility-Based.............................          174
Other......................................................         4612
                                                            ------------
    Total..................................................         8859
------------------------------------------------------------------------

Source: HCFA--On Line Survey Certification and Reporting System 
Standard Report 10--4/13/99
    The following RFA analysis, together with the rest of this 
preamble, explains the rationale for and purposes of this notice, 
analyzes alternatives, and presents the measures we propose to minimize 
the burden on small entities.
    We anticipate this notice, in total, will not have a significant 
impact on a substantial number of small entities. The policies set 
forth in this notice are consistent with those set forth in the 
``Schedules of Per-Visit and Per-Beneficiary Limitations on Home Health 
Agency Costs for Cost Reporting Periods Beginning On or After October 
1, 1998'' (63 FR 42912) as subsequently amended by section 5101 of 
OCESAA '99, and the financial effect os this notice on HHAs is confined 
to our rebasing of the per-visit limitations. We estimate that the 
financial effect of this notice will be a cost to the Medicare program 
of approximately $40 million in Federal FY 2000, which amount does not 
meet the $100 million RFA threshold for an economically significant 
rule.
    In addition, we have examined the options for lessening the burden 
on small entities; however, the statute does not allow for any 
exceptions to these limitations based on size of entity. Therefore, 
there are no options to lessen the regulatory burden that are 
consistent with the statute. Although this notice does not meet the 
$100 million threshold for an RFA analysis, we are preparing a 
voluntary one because this notice with comment is an integral part of 
the HHA IPS.
    Section 202 of the Unfunded Mandates Reform Act requires agencies 
to prepare an assessment of anticipated costs and benefits before 
proposing any rule that may result in an annual expenditure by State, 
local, or tribal governments, in the aggregate, or by private sector, 
of $100 million (adjusted annually for inflation). We believe that 
there are no costs associated with this notice with comment that apply 
to these governmental and private sectors. Therefore, the law does not 
apply.
    This notice with comment is not a major rule as defined in title 5, 
United States Code, section 804(2) and is not an economically 
significant rule under Executive Order 12866. However, we are preparing 
a regulatory impact statement because this notice with comment is an 
integral part of the HHA IPS.

1. Background

    This notice with comment period sets forth revised schedules of 
limitations on HHA costs that may be paid under the Medicare program 
for cost reporting periods beginning on or after October 1, 1999 and 
portions of cost reporting periods beginning before October 1, 2000. 
These limitations replace the limitations that were set forth in our 
August 11, 1998 notice with comment period (63 FR 42912).
    The methodology used to develop the schedule of per-visit 
limitations in this notice is the same as that used in setting the 
limitations effective October 1, 1998. We are using the latest settled 
cost report data from freestanding HHAs to develop the per-visit cost 
limitations. We have updated the per-visit cost limitations to reflect 
the expected cost increases between the cost reporting periods in the 
database and September 30, 2000 reduced by 1.1 percentage points as 
required by section 1861(v)(1)(L)(ix) of the Act and 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 as 
required by section 1861(v)(1)(l)(iv) of the Act.
    To develop the schedule of per-visit limitations effective for cost 
reporting periods beginning on or after October 1, 1999, we extracted 
actual cost per-visit data from the most recent settled Medicare cost 
reports for periods beginning on or after October 1, 1994 and settled 
by March 1999. The majority of the cost reports were from Federal FY 
1996. We then adjusted the data using the latest available market 
basket indices to reflect expected cost increases occurring between the 
cost reporting periods contained in our database and September 30, 
2000, reduced by 1.1 percentage points as required by section 
1861(v)(1)(L)(ix) of the Act and 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 as required by section 
1861(v)(1)(L)(iv) of the Act.
    A wage index is used to adjust the labor-related portion of the 
per-visit limitation to reflect differing wage levels among areas. In 
establishing the per-visit limitation, we used the FY 1999 hospital 
wage index, which is based on 1995 hospital wage data.
    The methodologies and data used to develop the schedule of per-
beneficiary limitations set forth in this notice are the same as those 
used in setting the per-beneficiary limitations that were effective for 
cost reporting periods beginning on or after October 1, 1998. We have 
updated the per-beneficiary limitations to reflect the expected cost 
increases occurring between the cost reporting periods ended during 
Federal FY 1994 and September 30, 2000, 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 as required by 
law.
    The cost report data used to develop the schedule of per-
beneficiary limitations set forth in this notice are for cost reporting 
periods ending in Federal FY 1994, as required by section 1861(v)(1)(L) 
of the Act. We have updated the per-beneficiary limitations to reflect 
the expected cost increases occurring between the cost reporting 
periods for the data contained in the database and September 30, 2000 
(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 wage index is used to adjust the labor-related portion of the 
standardized regional average per-beneficiary limitation and the 
national per-

[[Page 42779]]

beneficiary limitation to reflect differing wage levels among areas. In 
establishing the regional average per-beneficiary limitation and 
national per-beneficiary limitation, we used the FY 1999 hospital wage 
index effective with discharges on or after March 1, 1999, which is 
based on 1995 hospital wage data.
    For new providers and providers without a 12-month cost reporting 
period ending in Federal FY 1994 but for which the first cost reporting 
period began before October 1, 1998, the per-beneficiary limitation 
will be a national per-beneficiary limitation that will be equal to the 
median of these limitations applied to other HHAs without the two 
percent reduction required in the original BBA legislation.
    For new providers for which the first cost reporting period begins 
on or after October 1, 1998, the per-beneficiary limitation will be the 
75 percent of the national per-beneficiary limitations with the 2 
percent reduction.
    A new provider or a provider without a 12-month cost reporting 
period in Federal FY 1994 that filed an application for home HHA 
provider status before September 15, 1998, or that was approved as a 
branch of its parent agency before that date and becomes a subunit of 
the parent agency or a separate agency on or after that date will be 
subject to the national per-beneficiary limitation without the 2 
percent reduction.
    The requirements for the per-visit and per-beneficiary limitations 
are set forth in Section 1861(v)(1)(L) of the Act. (See Section I of 
this notice for an expanded discussion.) These requirements are 
numerically explicit and allow us no administrative latitude. Thus, it 
is not possible to consider other alternatives for these limitations.

2. Effects of This Notice With Comment on HHAs

    This notice updates the HHA IPS for Federal FY 2000. As we 
mentioned earlier in this regulatory impact analysis, we estimate that 
there will be a cost to the Medicare program of approximately $40 
million in Federal FY 2000. Payments by Medicare under this system of 
payment limitations must be the lower of an HHA's actual reasonable 
allowable costs, per-visit limitations in the aggregate, or a per-
beneficiary limitation in the aggregate. The settled cost report data 
that we are using have been adjusted by the most recent market basket 
factors, reduced by 1.1 percentage points as required by section 
1861(v)(1)((l)(ix) of the Act, and excluding market basket increases 
for cost reporting periods beginning on or after July 1, 1994 and 
before July 1, 1996, as required by section 1861(v)(1)(L)(iv) of the 
Act to reflect the expected cost increases occurring between the cost 
reporting periods for the data contained in the database and September 
30, 2000.
    The following quantitative analysis presents the projected effects 
of the statutory changes effective for Federal FY 2000. We are unable 
to identify the effects of the changes to the cost limits on individual 
HHAs. However, Table 8 below illustrates the proportion of HHAs that 
are likely to be affected by the limits. This table is a model of our 
estimate of the revision in the schedule of the per-visit and per-
beneficiary limitations.
    Table 8 represents the projected effects of the HHA IPS and is 
based on the 574 providers in the audited cost report sample developed 
for HHA PPS extrapolated into a national weighted total of 7,161 HHAs. 
This sample has been adjusted by the most recent market basket factors 
to reflect the expected cost increases occurring between the cost 
reporting periods for the data contained in the database and September 
30, 2001. Table 8 reflects cost reporting periods beginning Federal FY 
2000 and those portions of cost reporting periods after October 1, 2000 
that have a cost reporting period beginning in Federal FY 2000. These 
portions will be subject to the limits in this notice minus 15 percent.
    Column one of this table divides HHAs by a number of 
characteristics including provider type, region, and urban versus rural 
location. For purposes of this impact table four regions have been 
defined: Northeast, South, Midwest, and West. The Northeast Region 
consists of Connecticut, Massachusetts, Maine, New Hampshire, New 
Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, and 
the Virgin Islands. The South Region consists of Alabama, Arkansas, the 
District of Columbia, Delaware, Florida, Georgia, Kentucky, Louisiana, 
Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, 
Tennessee, Texas, Virginia, and West Virginia. The Midwest Region 
consists of Iowa, Illinois, Indiana, Kansas, Michigan, Minnesota, 
Missouri, North Dakota, Nebraska, Ohio, South Dakota, and Wisconsin. 
The West Region consists of Alaska, Arizona, California, Colorado, 
Hawaii, Idaho, Montana, New Mexico, Nevada, Oregon, Utah, Washington, 
and Wyoming.
    This table takes into account the behaviors that we believe HHAs 
will engage in to reduce the adverse effects of section 4602 of the BBA 
on their allowable costs. We believe these behavioral offsets might 
include an increase in the number of low-cost beneficiaries served, a 
general decrease in the number of visits provided, and earlier 
discharge of patients who are not eligible for Medicare home health 
benefits because they no longer need skilled services but have only 
chronic, custodial care needs. We believe that, on average, these 
behavioral offsets will result in a 65 percent reduction in the effects 
these limits might otherwise have on an individual HHA for the per-
beneficiary limitations and a 50 percent reduction for the per-visit 
limitations.
    Column one of this table divides HHAs by a number of 
characteristics including their ownership, whether they are old or new 
agencies, whether they are located in an urban or rural area, and the 
region in which they are located. Column two shows the number of 
agencies that fall within each characteristic or group of 
characteristics. For example, there are 2,549 rural freestanding HHAs 
in our database. Column three shows the percent of HHAs within a group 
that are projected to exceed the per-visit limitation (and therefore 
will not be affected by the per-beneficiary limitation) before the 
behavioral offsets are taken into account. Column four shows the 
average percent of costs over the per-visit limitation for an agency in 
that cell, including behavioral offsets. Column five shows the percent 
of HHAs within a group that are projected to exceed the per-beneficiary 
limitation (and therefore will not be affected by the per-visit 
limitation) before the behavioral offsets are taken into account. 
Column six shows the average percent of costs over the per-beneficiary 
limitation for an agency in that category, including behavioral 
offsets. It is important to note that in determining the expected 
percentage of an agency's costs exceeding the cost limitations, column 
four (percent of costs exceeding visit limits) and column six (percent 
of costs exceeding beneficiary limits) are not to be added together. 
Either the per-visit limitation or the per-beneficiary limitation is 
exceeded, but not both.

[[Page 42780]]



                            Impact of Table 8.--The IPS HHA Limits, Effective 10/1/99
----------------------------------------------------------------------------------------------------------------
                                                               Percent of   Percent of   Percent of   Percent of
                                                                agencies      costs       agencies      costs
                                                  Number of    exceeding    exceeding    exceeding    exceeding
                                                   agencies      visit        visit     beneficiary  beneficiary
                                                                 limits       limits       limits       limits
----------------------------------------------------------------------------------------------------------------
                GEOGRAPHIC AREA
ALL AGENCIES...................................         7161         14.9          1.3         78.6         12.1
FREESTANDING...................................         4703          6.8          0.3         86.0         14.1
HOSPITAL-BASED.................................         2458         30.4          2.8         64.3          9.1
    OLD AGENCIES...............................         4467         17.2          1.6         78.2         10.3
        FREESTANDING...........................         2467          7.9          0.4         87.6         11.5
        HOSPITAL-BASED.........................         2000         28.8          2.7         66.7          9.1
    NEW AGENCIES*..............................         2693         10.9          0.7         79.2         17.2
        FREESTANDING...........................         2235          5.5          0.3         84.3         18.4
        HOSPITAL-BASED.........................          458         37.2          4.1         54.3          9.4
ALL URBAN......................................         4612         15.2          1.5         79.1         12.0
    FREESTANDING...............................         3397          7.1          0.4         85.7         14.0
    HOSPITAL BASED.............................         1215         38.0          3.0         60.4          9.1
    OLD AGENCIES...............................         2574         16.0          1.7         82.0         10.2
        FREESTANDING...........................         1611          8.9          0.5         88.3         11.4
        HOSPITAL-BASED.........................          963         37.6          2.9         62.4          9.1
    NEW AGENCIES...............................         2038         12.2          0.9         74.8         16.9
        FREESTANDING...........................         1786          5.5          0.3         83.4         18.0
        HOSPITAL-BASED.........................          252         39.3          4.0         52.9          8.8
ALL RURAL......................................         2549         14.2          0.8         77.7         12.4
    FREESTANDING...............................         1306          5.9          0.1         86.7         14.3
    HOSPITAL-BASED.............................         1243         23.0          2.1         68.2          9.3
    OLD AGENCIES...............................         1894         10.1          1.0         80.2         10.5
        FREESTANDING...........................          857          6.0          0.1         86.1         11.6
        HOSPITAL-BASED.........................         1037         20.6          2.1         70.6          9.1
    NEW AGENCIES...............................          655         10.9          0.2         80.4         18.9
        FREESTANDING...........................          449          5.7          0.0         88.0         20.3
HOSPITAL-BASED.................................          206         34.7          1.4         55.9         11.6
                   BY: REGION
    OLD AGENCIES...............................         4467         17.2          1.6         78.2         10.3
        MIDWEST................................         1298         16.9          2.6         78.6          6.8
        NORTHEAST..............................          649          7.4          0.3         89.2         10.3
        SOUTH..................................         1857         17.0          1.2         80.1         12.0
        WEST...................................          662         28.4          4.1         61.4          8.4
    NEW AGENCIES...............................         2693         10.9          0.7         79.2         17.2
        MIDWEST................................          607         15.2          1.0         73.1         10.9
        NORTHEAST..............................          247         19.6          2.4         60.2          9.9
        SOUTH..................................         1316          7.2          0.4         83.5         21.4
        WEST...................................          524         11.3          0.3         84.4        16.2
----------------------------------------------------------------------------------------------------------------
* New Agencies Are Those Without a 12-Month Cost Reporting Period Beginning in Federal FY 1994.

B. Percent of Costs Exceeding Per-Visit Limitations (Column Four)

    Results from this column indicate that, for an HHA that reaches the 
per-visit limitation first, the average percent of the agency's costs 
exceeding the per-visit limitation for an HHA in the ``all agencies'' 
category is 1.3 percent after the behavioral offset. This relatively 
low number should not be surprising since the intent of section 4602 of 
the BBA is to control the soaring expenditures of the Medicare home 
health benefit that have been driven largely by increased utilization 
rather than the price per visit. For the all agencies category sorted 
by provider type, the average percent of freestanding HHAs exceeding 
the per-visit limitation is 0.3 percent; for hospital-based HHAs, it is 
2.8 percent. This also should not be surprising as hospital-based HHAs 
have historically had higher overhead costs. All discussion of the 
analysis of the per-visit limitation is based on the fact that HHAs in 
these categories reached the per-visit limitation and therefore are not 
affected by the per-beneficiary limitation. For the overall old 
agencies category (HHAs that filed a 12-month cost report that ended 
during Federal FY 1994), the average percent of the agency's costs 
exceeding the per-visit limitation is 1.6 percent; for freestanding 
HHAs, it is 0.4 percent; and for hospital-based HHAs, it is 2.7 
percent. For the overall new agencies category (such as HHAs that did 
not have a 12-month cost reporting period ended in Federal FY 1994 or 
that entered the Medicare program after Federal FY 1994), the average 
percent of the agency's costs exceeding the per-visit limitation is 0.7 
percent, for freestanding HHAs, it is 0.3 percent; and for hospital-
based HHAs, it is 4.1 percent.
    For the urban areas HHA category, the average percent of the 
agency's costs exceeding the per-visit limitation is 1.5 percent. For 
freestanding HHAs, it is 0.4 percent; and for hospital-based HHAs, it 
is 3.0 percent. For the rural areas HHA category, the average percent 
of such agency's cost exceeding the per-visit limitation is 0.8 
percent; for freestanding HHAs, it is 0.1 percent; and for hospital-
based HHAs, it is 2.1 percent.
    For the old agencies urban provider type category, the average 
percent of the agency's costs exceeding the per-visit limitation for 
freestanding HHAs is 0.5 percent; and for hospital-based HHAs, it is 
2.9 percent. For the old agencies rural provider type, the average 
percent of the agency's costs exceeding the per-visit limitation for 
freestanding HHAs is 0.1

[[Page 42781]]

percent; and for hospital-based HHAs, is 2.1 percent. For the old 
agencies region category, the average percent of the agency's costs 
exceeding the per-visit limitation ranges from a low of 0.3 percent in 
the Northeast region to a high of 4.1 percent in the West region. The 
other regions range between 1.2 and 2.6 percent.
    For the new agencies urban provider type category, the average 
percent of the agency's costs exceeding the per-visit limitation for 
freestanding HHAs is 0.3 percent while for hospital-based HHAs it is 
4.0 percent. For the new agencies rural provider type category the 
average percent; of the agency's costs exceeding the per-visit 
limitation for freestanding HHAs is 0.0 percent and for hospital based 
HHAs is 1.4 percent. For the new agencies region category, the average 
percent of the agency's costs exceeding the per-visit limitation ranges 
from a low of 0.3 percent in the West region to a high of 2.4 percent 
in the Northeast region. The other regions range between 0.4 percent 
and 1.0 percent.

C. Percent of Costs Exceeding Per-Beneficiary Limitation (Column Six)

    Results from this column indicate that, for an HHA that reaches the 
per-beneficiary limitation first, the average percent of the agency's 
costs exceeding the per-beneficiary limitation for an HHA in the ``all 
agencies'' category is 12.1 percent after the behavioral offset; for 
freestanding HHAs, it is 14.1 percent; and for hospital-based HHAs, it 
is 9.1 percent. All discussion of the analysis of the per-beneficiary 
limitation is based on the fact that HHAs in these categories reached 
the per-beneficiary limitation and therefore are not affected by the 
per-visit limitation.
    For the overall old agencies category (HHAs that filed a 12-month 
cost report that ended during Federal FY 1994), the average percent of 
the agency's costs exceeding the per-beneficiary limitation is 10.3 
percent; for freestanding HHAs, it is 11.5 percent; and for hospital-
based HHAs it is 9.1 percent. For the overall new agencies category 
(including HHAs that did not have a 12-month cost reporting period 
ended in Federal FY 1994 or that entered the Medicare program after 
Federal FY 1994), the average percent of the agency's costs exceeding 
the per-beneficiary limitation is 17.2 percent; for freestanding HHAs, 
it is 18.4 percent; and for hospital-based HHAs, it is 9.4 percent. Old 
agencies will not be affected as much by the per-beneficiary 
limitations as the new agencies, on average, because the new agencies 
have, in general, reported higher costs per patient related to higher 
levels of utilization. Moreover, the statutory provision for old 
providers that bases 75 percent of the limitation on their own cost 
experience would implicitly result in less of an impact than 
experienced by the new providers whose limitations are based on a 
national median that may be higher or lower than their previous costs. 
Also, we believe the differing impacts of these limits is an inherent 
result of beginning to draw unexplained variation among providers 
utilization and cost closer to national norms that existed before the 
rapid increase in home health expenditures of the post '93 to '94 
period.
    For the urban areas HHA category, the average percent of the 
agency's costs exceeding the per-beneficiary limitation is 12.0 
percent; for freestanding HHAs, it is 14.0 percent; and for hospital-
based HHAs, it is 9.1 percent. For the rural areas HHA category, the 
average percent of the agency's costs exceeding the per-beneficiary 
limitation is 12.4 percent; for freestanding HHAs, it is 14.3 percent; 
and for hospital-based HHAs, it is 9.3 percent. For the old agencies 
urban provider type category, the average percent of the agency's costs 
exceeding the per-beneficiary limitation for freestanding HHAs is 11.4 
percent; and for hospital-based HHAs is 9.1 percent. For the old 
agencies rural provider type category, the average percent of the 
agency's costs exceeding the per-beneficiary limitation for 
freestanding HHAs is 11.6 percent; and for hospital-based HHAs is 9.1 
percent. For the old agencies region category, the average percent of 
the agency's costs exceeding the per-beneficiary limitation ranges from 
a low of 6.8 percent in the Midwest region to a high of 12.0 percent in 
the South region. The other regions range between 8.4 percent and 10.3 
percent. The differences between regions reflect the pattern of highly 
disparate costs that have been reported historically between geographic 
areas that cannot be explained by differences in patient 
characteristics but appear more related to patterns of HHA business 
practices. The impact tracks the pre-HH IPS pattern of regions with 
highest costs.
    For the new agencies urban provider type category, the average 
percent of the agency's costs exceeding the per-beneficiary limitation 
for freestanding HHAs is 18.0 percent; and for hospital based HHAs, it 
is 8.8 percent. For the new agencies rural provider type category the 
average percent of the agency's costs exceeding the per-beneficiary 
limitation for freestanding HHAs is 20.3 percent; and for hospital-
based HHAs is 11.6 percent. For the new agencies region category, the 
average percent of the agency's costs exceeding the per-beneficiary 
limitation ranges from a low of 9.9 percent in the Northeast region to 
a high of 21.4 percent in the South region. The other regions range 
from 10.9 percent to 16.2 percent. In general, newer agencies in 
regions that have exceptionally high cost histories experience a bigger 
impact due to their being limited to the national median.
    Although there is considerable variation in these limitations, we 
believe this is a reflection of the wide variation in payments that 
have been recognized under the present cost reimbursement system. 
Moreover, we believe the differing impacts of these limitations is an 
inherent result of beginning to draw unexplained variation among 
providers closer to which existed before the rapid increase in home 
health expenditures of the post '93 to '94 period. Because this rule 
limits payments to HHAs to the lesser of actual cost, the per-visit 
limitations, or the per-beneficiary limitation, we have estimated the 
combined impact of these limitations in terms of the number of agencies 
affected to a greater or lesser extent by both limits.
    We estimate that in Federal FY 2000, 15 percent of the HHAs will be 
limited by the per-visit limitation while 79 percent will be limited to 
the per-beneficiary limitation. It is important to note again that an 
HHA is affected either by the per-visit limitation or the per-
beneficiary. They will not be affected by both.
    Medicare payments to managed care plans are based on fee-for-
service Medicare benefits. Although we do not know what home health 
services are supplied for these payments, we know how much we pay the 
plans as a result of fee-for-service home health payments. Thus, 
managed care payments are figured in as part of our cost/savings 
estimates. Managed care plans are not expected to reduce home health 
services as a result of this notice. For Federal FY 2000, we estimate 
that 20 percent of the Medicare cost will be for payments to managed 
care plans, our estimate for Federal FY 2003 is 26 percent.
    We believe that the effect of this notice on State Medicaid 
programs overall will be small. However, because of the flexibility and 
variation in State Medicaid policies and service delivery systems as 
well as differences in provider behavior in reaction to these limits, 
it is impossible to predict which States will be affected or the 
magnitude of the impact.
    We have reviewed this notice under the threshold criteria of 
Executive Order 12612. We have determined that it does

[[Page 42782]]

not significantly affect the rights, roles, and responsibilities of 
States.

X. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, agencies are required to 
provide a 60-day notice in the Federal Register and solicit public 
comments before a collection of information requirement is submitted to 
the Office of Management and Budget for review and approval. This 
document does not impose information collection and record keeping 
requirements. Consequently, it need not be reviewed by the Office of 
Management and Budget under the authority of the Paperwork Reduction 
Act of 1995.

XI. Other Required Information

A. Waiver of Proposed Notice

    In adopting notices such as this, we ordinarily publish a proposed 
notice in the Federal Register to provide a period for public comment 
before the provisions of the notice take effect. However, we may waive 
this procedure if for good cause we find that prior notice and comment 
are impracticable, unnecessary, or contrary to public interest. (5 USC 
section 553(b)(B)).
    Section 1861(v)(1)(L) of the Act requires that the Secretary 
establish revised HHA cost limits for cost reporting periods beginning 
on or after July 1, 1991 and annually thereafter (except for cost 
reporting periods beginning on or after July 1, 1994 and before July 1, 
1996). In accordance with the statute, we have used the same 
methodology to develop the schedules of limits that were used in 
setting the limits effective for cost reporting periods beginning on or 
after October 1, 1997. These 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, 2000 as required by section 
1861(v)(1)(L)(ix) of the Act excluding market basket increases, reduced 
by 1.1 percentage points with respect to cost reporting periods that 
began on or after July 1, 1994 and before July 1, 1996 as required by 
section 1861(v)(1)(L)(iv) of the Act. In addition, as required under 
section 1861(v)(1)(L) of the Act, we have used the most recently 
published hospital wage index.
    Therefore, for good cause we find that it was unnecessary to 
undertake notice and comment procedures. Generally, the methodology 
used to develop these schedules of limits is dictated by statute and 
does not require the exercise of discretion. These methodologies have 
also been previously published for public comment. It was also 
necessary to inform HHAs of their new cost limitations in a timely 
manner so that HHAs could benefit from the most recently published wage 
index and updated market basket adjustment factor.
    Accordingly, for good cause, we waive prior notice and comment 
procedures. However, we are providing a 60-day comment period for 
public comment, as indicated at the beginning of this notice.

B. 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 document.

    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: June 16, 1999.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
    Dated: June 29, 1999.
Donna E. Shalala,
Secretary.

                Addendum 1a.--Wage Index for Urban Areas
------------------------------------------------------------------------
                                                                  Wage
              Urban area  (Constituent counties)                  index
------------------------------------------------------------------------
0040  Abilene, TX.............................................    0.7981
  Taylor, TX
0060  Aguadilla, PR...........................................    0.4727
  Aguada, PR
  Aguadilla, PR
  Moca, PR
0080  Akron, OH...............................................    0.9900
  Portage, OH
  Summit, OH
0120  Albany, GA..............................................    0.7975
  Dougherty, GA
  Lee, GA
0160  Albany-Schenectady-Troy, NY.............................    0.8610
  Albany, NY
  Montgomery, NY
  Rensselaer, NY
  Saratoga, NY
  Schenectady, NY
  Schoharie, NY
0200  Albuquerque, NM.........................................    0.8613
  Bernalillo, NM
  Sandoval, NM
  Valencia, NM
0220  Alexandria, LA..........................................    0.8526
  Rapides, LA
0240  Allentown-Bethlehem-Easton, PA..........................    1.0204
  Carbon, PA
  Lehigh, PA
  Northampton, PA
0280  Altoona, PA.............................................    0.9335
  Blair, PA
0320  Amarillo, TX............................................
  Potter, TX                                                      0.8474
  Randall, TX
0380  Anchorage, AK...........................................    1.2818
  Anchorage, AK
0440  Ann Arbor, MI...........................................    1.1033
  Lenawee, MI
  Livingston, MI
  Washtenaw, MI
0450  Anniston, AL............................................    0.8658
  Calhoun, AL
0460  Appleton-Oshkosh-Neenah, WI.............................    0.8825
  Calumet, WI
  Outagamie, WI
  Winnebago, WI
0470  Arecibo, PR.............................................    0.4867
  Arecibo, PR
  Camuy, PR
  Hatillo, PR
0480  Asheville, NC...........................................    0.8940
  Buncombe, NC
  Madison, NC
0500Athens, GA................................................    0.8673
  Clarke, GA
  Madison, GA
  Oconee, GA
0520  Atlanta, GA.............................................    0.9915
  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-Cape May, NJ...................................    1.1536
  Atlantic, NJ
  Cape May, NJ
0600  Augusta-Aiken, GA-SC....................................    0.9233
  Columbia, GA
  McDuffie, GA
  Richmond, GA
  Aiken, SC
   Edgefield, SC
0640  Austin-San Marcos, TX...................................    0.8782
  Bastrop, TX

[[Page 42783]]

 
  Caldwell, TX
  Hays, TX
  Travis, TX
  Williamson, TX
0680  Bakersfield, CA.........................................    0.9531
  Kern, CA
 
0720  Baltimore, MD...........................................    0.9642
  Anne Arundel, MD
  Baltimore, MD
  Baltimore City, MD
  Carroll, MD
  Harford, MD
  Howard, MD
  Queen Anne's, MD
0733  Bangor, ME..............................................    0.9474
  Penobscot, ME
0743Barnstable-Yarmouth, MA...................................    1.5382
  Barnstable, MA
0760  Baton Rouge, LA.........................................    0.8872
  Ascension, LA
  East Baton Rouge, LA
  Livingston, LA
  West Baton Rouge, LA
0840  Beaumont-Port Arthur, TX................................    0.8659
  Hardin, TX
  Jefferson, TX
  Orange, TX
0860  Bellingham, WA..........................................    1.1434
  Whatcom, WA
0870  Benton Harbor, MI.......................................    0.8531
    Berrien, MI
0875  Bergen-Passaic, NJ......................................    1.2186
    Bergen, NJ
    Passaic, NJ
0880  Billings, MT............................................    0.9143
    Yellowstone, MT
0920  Biloxi-Gulfport-Pascagoula, MS..........................    0.8276
    Hancock, MS
    Harrison, MS
    Jackson, MS
0960  Binghamton, NY..........................................    0.9059
    Broome, NY
    Tioga, NY
1000  Birmingham, AL..........................................    0.9073
    Blount, AL
    Jefferson, AL
    St. Clair, AL
    Shelby, AL
1010  Bismarck, ND............................................    0.8025
    Burleigh, ND
    Morton, ND
1020  Bloomington, IN.........................................    0.8965
    Monroe, IN
1040  Bloomington-Normal, IL..................................    0.8851
    McLean, IL
1080  Boise City, ID..........................................    0.9160
    Ada, ID
    Canyon, ID
1123  Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH........    1.1269
    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....................................    1.0038
    Boulder, CO
1145  Brazoria, TX............................................    0.8906
    Brazoria, TX
1150  Bremerton, WA...........................................    1.1055
    Kitsap, WA
1240  Brownsville-Harlingen-San Benito, TX....................    0.8237
    Cameron, TX
1260  Bryan-College Station, TX...............................    0.7820
    Brazos, TX
1280  Buffalo-Niagara Falls, NY...............................    0.9587
    Erie, NY
    Niagara, NY
1303  Burlington, VT..........................................    0.9577
    Chittenden, VT
    Franklin, VT
    Grand Isle, VT
1310  Caguas, PR..............................................    0.4400
    Caguas, PR
    Cayey, PR
    Cidra, PR
    Gurabo, PR
    San Lorenzo, PR
1320  Canton-Massillon, OH....................................    0.8813
    Carroll, OH
    Stark, OH
1350  Casper, WY..............................................    0.8701
    Natrona, WY
1360  Cedar Rapids, IA........................................    0.8814
    Linn, IA
1400  Champaign-Urbana, IL....................................    0.8723
    Champaign, IL
1440  Charleston-North Charleston, SC.........................    0.9114
    Berkeley, SC
    Charleston, SC
    Dorchester, SC
1480  Charleston, WV..........................................    0.8990
    Kanawha, WV
    Putnam, WV
1520  Charlotte-Gastonia-Rock Hill, NC-SC.....................    0.9686
    Cabarrus, NC
    Gaston, NC
    Lincoln, NC
    Mecklenburg, NC
    Rowan, NC
    Stanly, NC
    Union, NC
    York, SC
1540  Charlottesville, VA.....................................    1.0272
    Albemarle, VA
    Charlottesville City, VA
    Fluvanna, VA
    Greene, VA
1560  Chattanooga, TN-GA......................................    0.9074
    Catoosa, GA
    Dade, GA
    Walker, GA
    Hamilton, TN
    Marion, TN
1580  Cheyenne, WY............................................    0.8149
    Laramie, WY
1600  Chicago, IL.............................................    1.0461
    Cook, IL
    DeKalb, IL
    DuPage, IL
    Grundy, IL
    Kane, IL
    Kendall, IL
    Lake, IL
    McHenry, IL
    Will, IL
1620  Chico-Paradise, CA......................................    1.0145
    Butte, CA
1640  Cincinnati, OH-KY-IN....................................    0.9595
    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.........................    0.8040
    Christian, KY
    Montgomery, TN
1680  Cleveland-Lorain-Elyria, OH.............................    0.9886
    Ashtabula, OH
    Cuyahoga, OH
    Geauga, OH
    Lake, OH
    Lorain, OH
    Medina, OH
1720  Colorado Springs, CO....................................    0.9390
    El Paso, CO
1740  Columbia, MO............................................    0.8942
    Boone, MO
1760  Columbia, SC............................................    0.9290
    Lexington, SC
    Richland, SC
1800  Columbus, GA-AL.........................................
  Russell, AL                                                     0.8511
    Chattahoochee, GA
    Harris, GA
    Muscogee, GA
1840  Columbus, OH............................................    0.9781
    Delaware, OH
    Fairfield, OH
    Franklin, OH
    Licking, OH
    Madison, OH
    Pickaway, OH
1880  Corpus Christi, TX......................................    0.8513
    Nueces, TX
    San Patricio, TX
1900  Cumberland, MD-WV.......................................    0.8242
    Allegany, MD
    Mineral, WV
1920  Dallas, TX..............................................    0.9369
    Collin, TX
    Dallas, TX
    Denton, TX
    Ellis, TX
    Henderson, TX
    Hunt, TX
    Kaufman, TX
    Rockwall, TX
1950  Danville, VA............................................    0.9045
    Danville City, VA
    Pittsylvania, VA

[[Page 42784]]

 
1960  Davenport-Moline-Rock...................................
  Island, IA-IL                                                   0.8413
    Scott, IA
    Henry, IL
  Rock Island, IL
2000  Dayton-Springfield, OH..................................    0.9605
    Clark, OH
    Greene, OH
    Miami, OH
    Montgomery, OH
  2020  Daytona Beach, FL.....................................    0.9134
    Flagler, FL
    Volusia, FL
2030  Decatur, AL.............................................    0.8233
    Lawrence, AL
  Morgan, AL
2040  Decatur, IL.............................................    0.8035
    Macon, IL
2080  Denver, CO..............................................    1.0331
    Adams, CO
    Arapahoe, CO
    Denver, CO
    Douglas, CO
    Jefferson, CO
2120  Des Moines, IA..........................................    0.8448
    Dallas, IA
    Polk, IA
    Warren, IA
2160  Detroit, MI.............................................    1.0544
    Lapeer, MI
    Macomb, MI
    Monroe, MI
    Oakland, MI
    St. Clair, MI
    Wayne, MI
2180  Dothan, AL..............................................    0.7892
    Dale, AL
    Houston, AL
2190  Dover, DE...............................................    0.9363
    Kent, DE
2200  Dubuque, IA.............................................    0.8222
    Dubuque, IA
2240  Duluth-Superior, MN-WI..................................    0.9962
    St. Louis, MN
    Douglas, WI
2281  Dutchess County, NY.....................................    1.0530
    Dutchess, NY
2290  Eau Claire, WI..........................................    0.8573
    Chippewa, WI
    Eau Claire, WI
2320  El Paso, TX.............................................    0.9215
  El Paso, TX
2330  Elkhart-Goshen, IN......................................    0.9305
    Elkhart, IN
2335  Elmira, NY..............................................    0.8440
    Chemung, NY
2340Enid, OK..................................................    0.7983
    Garfield, OK
2360  Erie, PA................................................    0.9271
    Erie, PA
2400  Eugene-Springfield, OR..................................    1.1193
    Lane, OR
2440  Evansville-Henderson, IN-KY.............................    0.8528
    Posey, IN
    Vanderburgh, IN
    Warrick, IN
    Henderson, KY
2520  Fargo-Moorhead, ND-MN...................................    0.9520
    Clay, MN
    Cass, ND
2560  Fayetteville, NC........................................    0.8389
    Cumberland, NC
2580  Fayetteville-Springdale-Rogers, AR......................    0.8614
    Benton, AR
    Washington, AR
2620  Flagstaff, AZ-UT........................................    0.9483
    Coconino, AZ
    Kane, UT
2640  Flint, MI...............................................    1.1031
    Genesee, MI
2650  Florence, AL............................................    0.7676
    Colbert, AL
    Lauderdale, AL
2655  Florence, SC............................................    0.8501
    Florence, SC
2670  Fort Collins-Loveland, CO...............................    1.0770
    Larimer, CO
2680  Ft. Lauderdale, FL......................................    0.9807
    Broward, FL
2700  Fort Myers-Cape Coral, FL...............................    0.8942
    Lee, FL
2710  Fort Pierce-Port St. Lucie, FL..........................    1.0241
    Martin, FL
    St. Lucie, FL
2720  Fort Smith, AR-OK.......................................    0.7623
    Crawford, AR
    Sebastian, AR
    Sequoyah, OK
2750  Fort Walton Beach, FL...................................    0.8615
    Okaloosa, FL
2760  Fort Wayne, IN..........................................    0.9047
    Adams, IN
    Allen, IN
    De Kalb, IN
    Huntington, IN
    Wells, IN
    Whitley, IN
2800  Forth Worth-Arlington, TX...............................    0.9719
    Hood, TX
    Johnson, TX
    Parker, TX
    Tarrant, TX
2840  Fresno, CA..............................................    1.0700
    Fresno, CA
    Madera, CA
2880  Gadsden, AL.............................................    0.8779
    Etowah, AL
2900  Gainesville, FL.........................................    0.9453
    Alachua, FL
2920  Galveston-Texas City, TX................................    1.0894
    Galveston, TX
2960  Gary, IN................................................    0.9435
    Lake, IN
    Porter, IN
2975  Glens Falls, NY.........................................    0.8490
    Warren, NY
    Washington, NY
2980  Goldsboro, NC...........................................    0.8530
     Wayne, NC
2985  Grand Forks, ND-MN......................................    0.8836
    Polk, MN
    Grand Forks, ND
2995  Grand Junction, CO......................................    0.8279
    Mesa, CO
3000  Grand Rapids-Muskegon-Holland, MI.......................    0.9971
    Allegan, MI
    Kent, MI
    Muskegon, MI
    Ottawa, MI
3040  Great Falls, MT.........................................    0.8872
    Cascade, MT
3060  Greeley, CO.............................................    0.9457
    Weld, CO
3080  Green Bay, WI...........................................    0.9156
    Brown, WI
3120  Greensboro-Winston-Salem-High Point, NC.................    0.9547
    Alamance, NC
    Davidson, NC
    Davie, NC
    Forsyth, NCGuilford, NC
    Randolph, NC
    Stokes, NC
    Yadkin, NC
3150  Greenville, NC..........................................    0.9434
    Pitt, NC
3160  Greenville-Spartanburg-Anderson, SC.....................    0.9222
    Anderson, SC
    Cherokee, SC
    Greenville, SC
    Pickens, SC
    Spartanburg, SC
3180  Hagerstown, MD..........................................    1.0183
    Washington, MD
3200  Hamilton-Middletown, OH.................................    0.9233
    Butler, OH
3240  Harrisburg-Lebanon-Carlisle, PA.........................    1.0060
  Cumberland, PA
  Dauphin, PA
  Lebanon, PA
  Perry, PA
3283  Hartford, CT 1 2........................................    1.1831
  Hartford, CT
  Litchfield, CT
  Middlesex, CT
  Tolland, CT
3285  Hattiesburg, MS.........................................    0.7261
  Forrest, MS
  Lamar, MS
3290  Hickory-Morganton-Lenoir, NC............................    0.8904
  Alexander, NC
  Burke, NC
  Caldwell, NC
  Catawba, NC
3320  Honolulu, HI............................................    1.1510
  Honolulu, HI
3350  Houma, LA...............................................    0.8197
  Lafourche, LA
  Terrebonne, LA
3360  Houston, TX.............................................    0.9889
  Chambers, TX
  Fort Bend, TX
  Harris, TX
  Liberty, TX
  Montgomery, TX
  Waller, TX
3400  Huntington-Ashland, WV-KY-OH............................    0.9647
  Boyd, KY
  Carter, KY
  Greenup, KY
  Lawrence, OH
  Cabell, WV

[[Page 42785]]

 
  Wayne, WV
3440  Huntsville, AL..........................................    0.8385
  Limestone, AL
  Madison, AL
3480  Indianapolis, IN........................................    0.9831
  Boone, IN
  Hamilton, IN
  Hancock, IN
  Hendricks, IN
  Johnson, IN
  Madison, IN
  Marion, IN
  Morgan, IN
  Shelby, IN
3500  Iowa City, IA...........................................    0.9481
  Johnson, IA
3520  Jackson, MI.............................................    0.9224
  Jackson, MI
3560  Jackson, MS.............................................    0.8292
  Hinds, MS
  Madison, MS
  Rankin, MS
3580  Jackson, TN.............................................    0.8560
  Madison, TN
  Chester, TN
3600  Jacksonville, FL........................................    0.8900
  Clay, FL
  Duval, FL
  Nassau, FL
  St. Johns, FL
3605  Jacksonville, NC........................................    0.7556
  Onslow, NC
3610  Jamestown, NY...........................................    0.7660
  Chautauqua, NY
3620  Janesville-Beloit, WI...................................    0.9051
  Rock, WI
3640  Jersey City, NJ.........................................    1.1598
  Hudson, NJ
3660  Johnson City-Kingsport-Bristol, TN-VA...................    0.8773
  Carter, TN
  Hawkins, TN
  Sullivan, TN
  Unicoi, TN
  Washington, TN
  Bristol City, VA
  Scott, VA
  Washington, VA
3680  Johnstown, PA...........................................    0.8619
  Cambria, PA
  Somerset, PA
3700  Jonesboro, AR...........................................    0.7407
  Craighead, AR
3710  Joplin, MO..............................................    0.7873
  Jasper, MO
  Newton, MO
3720  Kalamazoo-Battlecreek, MI...............................    1.1331
  Calhoun, MI
  Kalamazoo, MI
  Van Buren, MI
3740  Kankakee, IL............................................    0.9418
  Kankakee, IL
3760  Kansas City, KS-MO......................................    0.9645
  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.............................................    0.9129
  Kenosha, WI
3810  Killeen-Temple, TX......................................    1.0109
  Bell, TX
  Coryell, TX
3840  Knoxville, TN...........................................    0.8918
    Anderson, TN
    Blount, TN
    Knox, TN
    Loudon, TN
    Sevier, TN
    Union, TN
3850  Kokomo, IN..............................................    0.9275
    Howard, IN
    Tipton, IN
3870  La Crosse, WI-MN........................................    0.8913
    Houston, MN
    La Crosse, WI
3880  Lafayette, LA...........................................    0.8255
    Acadia, LA
    Lafayette, LA
    St. Landry, LA
  St. Martin, LA
3920  Lafayette, IN...........................................    0.8841
    Clinton, IN
    Tippecanoe, IN
3960  Lake Charles, LA........................................    0.7674
    Calcasieu, LA
3980  Lakeland-Winter Haven, FL...............................    0.8939
    Polk, FL
4000  Lancaster, PA...........................................    0.9561
    Lancaster, PA
4040  Lansing-East Lansing, MI................................    1.0090
    Clinton, MI
    Eaton, MI
    Ingham, MI
4080  Laredo, TX..............................................    0.7343
    Webb, TX
4100  Las Cruces, NM..........................................    0.8870
    Dona Ana, NM
4120  Las Vegas, NV-AZ........................................    1.1413
    Mohave, AZ
    Clark, NV
    Nye, NV
4150  Lawrence, KS............................................    0.8655
    Douglas, KS
4200  Lawton, OK..............................................    0.8697
    Comanche, OK
4243  Lewiston-Auburn, ME.....................................    0.9149
    Androscoggin, ME
4280  Lexington, KY...........................................    0.8506
    Bourbon, KY
    Clark, KY
    Fayette, KY
    Jessamine, KY
    Madison, KY
    Scott, KY
    Woodford, KY
4320  Lima, OH................................................    0.8949
    Allen, OH
    Auglaize, OH
4360  Lincoln, NE.............................................    0.9303
    Lancaster, NE
4400  Little Rock-North Little Rock, AR.......................    0.8503
    Faulkner, AR
    Lonoke, AR
    Pulaski, AR
    Saline, AR
4420  Longview-Marshall, TX...................................    0.8698
    Gregg, TX
    Harrison, TX
    Upshur, TX
4480  Los Angeles-Long Beach, CA..............................    1.2085
    Los Angeles, CA
4520  Louisville, KY-IN.......................................    0.9093
    Clark, IN
    Floyd, IN
    Harrison, IN
    Scott, IN
    Bullitt, KY
    Jefferson, KY
    Oldham, KY
4600  Lubbock, TX.............................................    0.8496
    Lubbock, TX
4640  Lynchburg, VA...........................................    0.8900
    Amherst, VA
    Bedford, VA
    Bedford City, VA
    Campbell, VA
    Lynchburg City, VA
4680  Macon, GA...............................................    0.8980
    Bibb, GA
    Houston, GA
    Jones, GA
    Peach, GA
    Twiggs, GA
4720  Madison, WI.............................................    1.0018
    Dane, WI
4800  Mansfield, OH...........................................    0.8534
    Crawford, OH
  Richland, OH
4840  Mayaguez, PR............................................    0.4401
    Anasco, PR
    Cabo Rojo, PR
    Hormigueros, PR
    Mayaguez, PR
    Sabana Grande, PR
    San German, PR
4880  McAllen-Edinburg-Mission, TX............................    0.8893
    Hidalgo, TX
4890  Medford-Ashland, OR.....................................    1.0020
    Jackson, OR
4900  Melbourne-Titusville-Palm Bay, FL.......................    0.9216
    Brevard, FL
4920  Memphis, TN-AR-MS.......................................    0.8361
    Crittenden, AR
    DeSoto, MS
    Fayette, TN
    Shelby, TN
    Tipton, TN
4940  Merced, CA..............................................    1.0033
    Merced, CA
5000  Miami, FL...............................................    1.0017
    Dade, FL
5015  Middlesex-Somerset-Hunterdon, NJ........................    1.1152
    Hunterdon, NJ
    Middlesex, NJ
    Somerset, NJ
5080  Milwaukee-Waukesha, WI..................................    0.9356
    Milwaukee, WI
    Ozaukee, WI

[[Page 42786]]

 
    Washington, WI
    Waukesha, WI
5120  Minneapolis-St. Paul, MN-WI.............................    1.0854
    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
5140  Missoula, MT............................................    0.9189
    Missoula, MT
5160  Mobile, AL..............................................    0.8377
    Baldwin, AL
    Mobile, AL
5170  Modesto, CA.............................................    1.0346
    Stanislaus, CA
5190  Monmouth-Ocean, NJ......................................    1.1317
    Monmouth, NJ
    Ocean, NJ
5200  Monroe, LA..............................................    0.8219
    Ouachita, LA
5240  Montgomery, AL..........................................    0.7821
    Autauga, AL
    Elmore, AL
    Montgomery, AL
5280  Muncie, IN..............................................    0.9414
    Delaware, IN
5330  Myrtle Beach, SC........................................    0.8179
    Horry, SC
5345  Naples, FL..............................................    1.0177
    Collier, FL
5360  Nashville, TN...........................................    0.9480
    Cheatham, TN
    Davidson, TN
    Dickson, TN
    Robertson, TN
    Rutherford, TN
    Sumner, TN
    Williamson, TN
    Wilson, TN
5380  Nassau-Suffolk, NY......................................    1.3593
    Nassau, NY
    Suffolk, NY
5483  New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT.....    1.2328
    Fairfield, CT
    New Haven, CT
5523  New London-Norwich, CT..................................    1.1616
    New London, CT
5560  New Orleans, LA.........................................    0.9310
    Jefferson, LA
    Orleans, LA
    Plaquemines, LA
    St. Bernard, LA
    St. Charles, LA
    St. James, LA
    St. John The Baptist, LA
    St. Tammany, LA
5600  New York, NY............................................    1.4461
    Bronx, NY
    Kings, NY
    New York, NY
    Putnam, NY
    Queens, NY
    Richmond, NY
    Rockland, NY
    Westchester, NY
5640  Newark, NJ..............................................    1.1866
    Essex, NJ
    Morris, NJ
    Sussex, NJ
    Union, NJ
    Warren, NJ
5660  Newburgh, NY-PA.........................................    1.1155
    Orange, NY
    Pike, PA
5720  Norfolk-Virginia Beach-Newport News, VA-NC..............    0.8275
    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.............................................    1.4993
    Alameda, CA
    Contra Costa, CA
5790  Ocala, FL...............................................    0.9152
    Marion, FL
5800  Odessa-Midland, TX......................................    0.8656
    Ector, TX
    Midland, TX
5880  Oklahoma City, OK.......................................    0.8708
    Canadian, OK
    Cleveland, OK
    Logan, OK
    McClain, OK
    Oklahoma, OK
    Pottawatomie, OK
5910  Olympia, WA  ...........................................    1.1522
    Thurston, WA
5920  Omaha, NE-IA............................................    0.9972
  Pottawattamie, IA
    Cass, NE
    Douglas, NE
    Sarpy, NE
    Washington, NE
5945  Orange County, CA.......................................    1.1522
    Orange, CA
5960  Orlando, FL.............................................    0.9813
    Lake, FL
    Orange, FL
    Osceola, FL
    Seminole, FL
5990  Owensboro, KY...........................................    0.7771
    Daviess, KY
6015  Panama City, FL.........................................    0.8507
    Bay, FL
6020  Parkersburg-Marietta, WV-OH.............................    0.8016
    Washington, OH
    Wood, WV
6080  Pensacola, FL...........................................    0.8246
    Escambia, FL
    Santa Rosa, FL
6120  Peoria-Pekin, IL........................................    0.8058
    Peoria, IL
    Tazewell, IL
    Woodford, IL
6160  Philadelphia, PA-NJ.....................................    1.1370
    Burlington, NJ
    Camden, NJ
    Gloucester, NJ
    Salem, NJ
    Bucks, PA
    Chester, PA
    Delaware, PA
    Montgomery, PA
    Philadelphia, PA
6200  Phoenix-Mesa, AZ........................................    0.9591
    Maricopa, AZ
    Pinal, AZ
6240  Pine Bluff, AR..........................................    0.7912
    Jefferson, AR
6280  Pittsburgh, PA..........................................    0.9789
    Allegheny, PA
    Beaver, PA
    Butler, PA
    Fayette, PA
    Washington, PA
    Westmoreland, PA
6323  Pittsfield, MA..........................................    1.0819
    Berkshire, MA
6340  Pocatello, ID...........................................    0.8792
    Bannock, ID
6360  Ponce, PR...............................................    0.4788
    Guayanilla, PR
    Juana Diaz, PR
    Penuelas, PR
    Ponce, PR
    Villalba, PR
    Yauco, PR
6403  Portland, ME............................................    0.9561
    Cumberland, ME
    Sagadahoc, ME
    York, ME
6440  Portland-Vancouver, OR-WA...............................    1.1178
    Clackamas, OR
    Columbia, OR
    Multnomah, OR
    Washington, OR
    Yamhill, OR
    Clark, WA
6483  Providence-Warwick-Pawtucket, RI........................    1.0801
    Bristol, RI
    Kent, RI
    Newport, RI
    Providence, RI
    Washington, RI
6520  Provo-Orem, UT..........................................    0.9885
    Utah, UT
6560  Pueblo, CO..............................................    0.8712
    Pueblo, CO
6580  Punta Gorda, FL.........................................    0.9031
    Charlotte, FL
6600  Racine, WI..............................................    0.9130
    Racine, WI
6640  Raleigh-Durham-Chapel Hill, NC..........................    0.9812
    Chatham, NC

[[Page 42787]]

 
    Durham, NC
    Franklin, NC
    Johnston, NC
    Orange, NC
    Wake, NC
6660  Rapid City, SD..........................................    0.8208
    Pennington, SD
6680  Reading, PA.............................................    0.9234
    Berks, PA
6690  Redding, CA.............................................    1.1858
    Shasta, CA
6720  Reno, NV................................................    1.1095
    Washoe, NV
6740  Richland-Kennewick-Pasco, WA............................    1.0287
    Benton, WA
    Franklin, WA
6760  Richmond-Petersburg, VA.................................    0.9211
    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............................    1.0757
    Riverside, CA
    San Bernardino, CA
6800  Roanoke, VA.............................................    0.8509
  Botetourt, VA
  Roanoke, VA
  Roanoke City, VA
  Salem City, VA
6820  Rochester, MN...........................................    1.1698
  Olmsted, MN
6840  Rochester, NY...........................................    0.9657
  Genesee, NY
  Livingston, NY
  Monroe, NY
  Ontario, NY
  Orleans, NY
  Wayne, NY
6880  Rockford, IL............................................    0.8615
  Boone, IL
  Ogle, IL
  Winnebago, IL
6895  Rocky Mount, NC.........................................    0.9012
  Edgecombe, NC
  Nash, NC
6920  Sacramento, CA..........................................    1.1962
  El Dorado, CA
  Placer, CA
  Sacramento, CA
6960  Saginaw-Bay City-Midland, MI............................    0.9487
  Bay, MI
  Midland, MI
  Saginaw, MI
6980  St. Cloud, MN...........................................    0.9586
  Benton, MN
  Stearns, MN
7000  St. Joseph, MO..........................................    0.9889
  Andrew, MO
  Buchanan, MO
7040  St. Louis, MO-IL........................................    0.9151
  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...............................................    0.9904
  Marion, OR
  Polk, OR
7120  Salinas, CA.............................................    1.5142
  Monterey, CA
7160  Salt Lake City-Ogden, UT................................    0.9398
  Davis, UT
  Salt Lake, UT
  Weber, UT
7200  San Angelo, TX..........................................    0.7646
  Tom Green, TX
7240  San Antonio, TX.........................................    0.8100
  Bexar, TX
  Comal, TX
  Guadalupe, TX
  Wilson, TX
7320  San Diego, CA...........................................    1.2265
  San Diego, CA
7360  San Francisco, CA.......................................    1.3957
  Marin, CA
  San Francisco, CA
  San Mateo, CA
7400  San Jose, CA............................................    1.3827
  Santa Clara, CA
7440  San Juan-Bayamon, PR....................................    0.4623
  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..............    1.1264
  San Luis Obispo, CA
7480  Santa Barbara-Santa Maria-Lompoc, CA....................    1.1194
  Santa Barbara, CA
7485  Santa Cruz-Watsonville, CA..............................    1.3981
   Santa Cruz, CA
7490  Santa Fe, NM............................................    0.9652
  Los Alamos, NM
  Santa Fe, NM
7500  Santa Rosa, CA..........................................    1.3597
  Sonoma, CA
7510  Sarasota-Bradenton, FL..................................    0.9532
  Manatee, FL
  Sarasota, FL
7520  Savannah, GA............................................    1.0060
    Bryan, GA
    Chatham, GA
    Effingham, GA
7560  Scranton--Wilkes-Barre--Hazleton, PA....................    0.8299
    Columbia, PA
    Lackawanna, PA
    Luzerne, PA
    Wyoming, PA
7600  Seattle-Bellevue-Everett, WA............................    1.1526
    Island, WA
    King, WA
    Snohomish, WA
7610  Sharon, PA..............................................    0.8847
    Mercer, PA
7620  Sheboygan, WI...........................................    0.8225
    Sheboygan, WI
7640  Sherman-Denison, TX.....................................    0.8570
    Grayson, TX
7680  Shreveport-Bossier City, LA.............................    0.9386
    Bossier, LA
    Caddo, LA
    Webster, LA
7720  Sioux City, IA-NE.......................................    0.8481
    Woodbury, IA
    Dakota, NE
7760  Sioux Falls, SD.........................................    0.8912
    Lincoln, SD
    Minnehaha, SD
7800  South Bend, IN..........................................    0.9859
    St. Joseph, IN
7840  Spokane, WA.............................................    1.0928
    Spokane, WA
7880  Springfield, IL.........................................    0.8720
    Menard, IL
    Sangamon, IL
7920  Springfield, MO.........................................    0.8071
    Christian, MO
    Greene, MO
    Webster, MO
8003  Springfield, MA.........................................    1.0990
    Hampden, MA
    Hampshire, MA
8050  State College, PA.......................................    0.9449
    Centre, PA
8080  Steubenville-Weirton, OH-WV.............................    0.8428
    Jefferson, OH
    Brooke, WV
    Hancock, WV
8120  Stockton-Lodi, CA.......................................    1.1075
    San Joaquin, CA

[[Page 42788]]

 
8140  Sumter, SC..............................................    0.8127
    Sumter, SC
8160  Syracuse, NY............................................    0.9400
    Cayuga, NY
    Madison, NY
    Onondaga, NY
    Oswego, NY
8200  Tacoma, WA..............................................    1.0380
    Pierce, WA
8240  Tallahassee, FL.........................................    0.8449
    Gadsden, FL
    Leon, FL
8280  Tampa-St. Petersburg-Clearwater, FL.....................    0.9113
    Hernando, FL
    Hillsborough, FL
    Pasco, FL
    Pinellas, FL
8320  Terre Haute, IN.........................................    0.8991
    Clay, IN
    Vermillion, IN
    Vigo, IN
8360  Texarkana, AR-Texarkana, TX.............................    0.8506
    Miller, AR
    Bowie, TX
8400  Toledo, OH..............................................    0.9991
    Fulton, OH
    Lucas, OH
    Wood, OH
8440  Topeka, KS..............................................    0.9812
    Shawnee, KS
8480  Trenton, NJ.............................................    1.0509
    Mercer, NJ
8520  Tucson, AZ..............................................    0.9028
    Pima, AZ
8560  Tulsa, OK...............................................    0.8463
    Creek, OK
    Osage, OK
    Rogers, OK
    Tulsa, OK
    Wagoner, OK
8600  Tuscaloosa, AL..........................................    0.7641
    Tuscaloosa, AL
8640  Tyler, TX...............................................    0.8818
    Smith, TX
8680  Utica-Rome, NY..........................................    0.8418
    Herkimer, NY
    Oneida, NY
8720  Vallejo-Fairfield-Napa, CA..............................    1.3413
    Napa, CA
    Solano, CA
8735  Ventura, CA.............................................    1.1014
    Ventura, CA
8750  Victoria, TX............................................    0.8381
    Victoria, TX
8760  Vineland-Millville-Bridgeton, NJ........................    1.0440
    Cumberland, NJ
8780  Visalia-Tulare-Porterville, CA..........................    1.0083
    Tulare, CA
8800  Waco, TX................................................    0.8371
    McLennan, TX
8840  Washington, DC-MD-VA-WV.................................    1.0807
  District of Columbia, DC
  Calvert, MD
  Charles, MD
  Frederick, MD
  Montgomery, MD
  Prince Georges, MD
  Alexandria City, VA
  Arlington, VA
  Clarke, VA
  Culpeper, 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                                    0.7958
  Black Hawk, IA
8940  Wausau, WI..............................................    0.9733
  Marathon, WI
8960  West Palm Beach-Boca Raton, FL..........................    1.0219
  Palm Beach, FL
9000  Wheeling, WV-OH.........................................    0.7627
  Belmont, OH
  Marshall, WV
  Ohio, WV
9040  Wichita, KS.............................................    0.8898
  Butler, KS
  Harvey, KS
  Sedgwick, KS
9080  Wichita Falls, TX.......................................    0.7830
  Archer, TX
  Wichita, TX
9140  Williamsport, PA........................................    0.8556
  Lycoming, PA
9160  Wilmington-Newark, DE-MD................................    1.1868
  New Castle, DE
  Cecil, MD
9200  Wilmington, NC..........................................    0.9343
  New Hanover, NC
  Brunswick, NC
9260  Yakima, WA..............................................    1.0318
  Yakima, WA
9270  Yolo, CA................................................    1.1233
  Yolo, CA
9280  York, PA................................................    0.9410
  York, PA
9320  Youngstown-Warren, OH                                       0.9815
  Columbiana, OH
  Mahoning, OH
   Trumbull, OH
9340  Yuba City, CA...........................................    1.0865
  Sutter, CA
  Yuba, CA
9360  Yuma, AZ................................................    1.0058
  Yuma, AZ
------------------------------------------------------------------------


                Addendum 1b.--Wage Index for Rural Areas
------------------------------------------------------------------------
                                                                  Wage
                         Nonurban area                            index
------------------------------------------------------------------------
Alabama.......................................................    0.7294
Alaska........................................................    1.2430
Arizona.......................................................    0.7989
Arkansas......................................................    0.7250
California....................................................    0.9979
Colorado......................................................    0.8436
Connecticut...................................................    1.2074
Delaware......................................................    0.8807
Florida.......................................................    0.8877
Georgia.......................................................    0.7888
Guam..........................................................    0.6516
Hawaii........................................................    1.0910
Idaho.........................................................    0.8477
Illinois......................................................    0.7916
Indiana.......................................................    0.8380
Iowa..........................................................    0.7777
Kansas........................................................    0.7319
Kentucky......................................................    0.7844
Louisiana.....................................................    0.7454
Maine.........................................................    0.8467
Maryland......................................................    0.8555
Massachusetts.................................................    1.0834
Michigan......................................................    0.8875
Minnesota.....................................................    0.8595
Mississippi...................................................    0.7312
Missouri......................................................    0.7452
Montana.......................................................    0.8398
Nebraska......................................................    0.7674
Nevada........................................................    0.9256
New Hampshire.................................................    1.0240
New Jersey \1\................................................  ........
New Mexico....................................................    0.8269
New York......................................................    0.8588
North Carolina................................................    0.8112
North Dakota..................................................    0.7497
Ohio..........................................................    0.8519
Oklahoma......................................................    0.7124
Oregon........................................................    0.9910
Pennsylvania..................................................    0.8664
Puerto Rico...................................................    0.4080
Rhode Island \1\..............................................  ........
South Carolina................................................    0.8046
South Dakota..................................................    0.7508
Tennessee.....................................................    0.7492
Texas.........................................................    0.7565
Utah..........................................................    0.8859
Vermont.......................................................    0.9416
Virginia......................................................    0.7857
Virgin Islands................................................    0.4588
Washington....................................................    1.0489
West Virginia.................................................    0.7875
Wisconsin.....................................................    0.8711
Wyoming.......................................................    0.8768
------------------------------------------------------------------------
\1\ All counties within the State are classified as urban.


          Addendum 2.--Cost Reporting Year--Adjustment Factor 1
------------------------------------------------------------------------
                                                                 The
          If the HHA cost reporting period begins             adjustment
                                                              factor is
------------------------------------------------------------------------
November 1, 1999...........................................      1.00113
December 1, 1999...........................................      1.00244
January 1, 2000............................................      1.00394
February 1, 2000...........................................      1.00544
March 1, 2000..............................................      1.00696
April 1, 2000..............................................      1.00850

[[Page 42789]]

 
May 1, 2000................................................      1.01013
June 1, 2000...............................................      1.01186
July 1, 2000...............................................      1.01369
August 1, 2000.............................................      1.01558
September 1, 2000..........................................      1.01753
------------------------------------------------------------------------
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.


 Addendum 3.--Monthly Index Levels for Calculating Inflation Factors To
      Be Applied to Home Health Agency Per-Beneficiary Limitations
------------------------------------------------------------------------
                           Month                             Index level
------------------------------------------------------------------------
October 1992...............................................       .98672
November 1992..............................................       .98800
December 1992..............................................       .98928
January 1993...............................................       .99313
February 1993..............................................       .99700
March 1993.................................................      1.00088
April 1993.................................................      1.00244
May 1993...................................................      1.00400
June 1993..................................................      1.00556
July 1993..................................................      1.00878
August 1993................................................      1.01200
September 1993.............................................      1.01523
October 1993...............................................      1.01662
November 1993..............................................      1.01800
December 1993..............................................      1.01939
January 1994...............................................      1.02318
February 1994..............................................      1.02700
March 1994.................................................      1.03083
April 1994.................................................      1.03141
May 1994...................................................      1.03200
June 1994..................................................      1.03259
July 1994..................................................      1.03259
August 1994................................................      1.03259
September 1994.............................................      1.03259
October 1994...............................................      1.03259
November 1994..............................................      1.03259
December 1994..............................................      1.03259
January 1995...............................................      1.03259
February 1995..............................................      1.03259
March 1995.................................................      1.03259
April 1995.................................................      1.03259
May 1995...................................................      1.03259
June 1995..................................................      1.03259
July 1995..................................................      1.03259
August 1995................................................      1.03259
September 1995.............................................      1.03259
October 1995...............................................      1.03259
November 1995..............................................      1.03259
December 1995..............................................      1.03259
January 1996...............................................      1.03259
February 1996..............................................      1.03259
March 1996.................................................      1.03259
April 1996.................................................      1.03259
May 1996...................................................      1.03259
June 1996..................................................      1.03259
July 1996..................................................      1.03479
August 1996................................................      1.03700
September 1996.............................................      1.03921
October 1996...............................................      1.04141
November 1996..............................................      1.04361
December 1996..............................................      1.04582
January 1997...............................................      1.04849
February 1997..............................................      1.05117
March 1997.................................................      1.05385
April 1997.................................................      1.05581
May 1997...................................................      1.05778
June 1997..................................................      1.05974
July 1997..................................................      1.06395
August 1997................................................      1.06817
September 1997.............................................      1.07317
October 1997...............................................      1.07406
November 1997..............................................      1.07572
December 1997..............................................      1.07738
January 1998...............................................      1.07986
February 1998..............................................      1.08233
March 1998.................................................      1.08481
April 1998.................................................      1.08735
May 1998...................................................      1.08989
June 1998..................................................      1.09243
July 1998..................................................      1.09588
August 1998................................................      1.09933
September 1998.............................................      1.10280
October 1998...............................................      1.10390
November 1998..............................................      1.10500
December 1998..............................................      1.10610
January 1999...............................................      1.10979
February 1999..............................................      1.11350
March 1999.................................................      1.11722
April 1999.................................................      1.11960
May 1999...................................................      1.12200
June 1999..................................................      1.12440
July 1999..................................................      1.12791
August 1999................................................      1.13144
September 1999.............................................      1.13498
October 1999...............................................      1.13509
November 1999..............................................      1.13520
December 1999..............................................      1.13531
January 2000...............................................      1.13714
February 2000..............................................      1.13898
March 2000.................................................      1.14081
April 2000.................................................      1.14179
May 2000...................................................      1.14276
June 2000..................................................      1.14374
July 2000..................................................      1.14515
August 2000................................................      1.14656
September 2000.............................................      1.14797
October 2000...............................................      1.15056
November 2000..............................................      1.15316
December 2000..............................................      1.15576
January 2001...............................................      1.15778
February 2001..............................................      1.15980
March 2001.................................................      1.16182
April 2001.................................................      1.16414
May 2001...................................................      1.16647
June 2001..................................................      1.16881
July 2001..................................................      1.17100
August 2001................................................      1.17319
September 2001.............................................      1.17539
October 2001...............................................      1.17655
------------------------------------------------------------------------

[FR Doc. 99-20012 Filed 7-30-99; 1:30 pm]
BILLING CODE 4120-03-P