PUBLIC LAW 105-33 —AUG. 5, 1997 111 STAT. 469 " (ii) HOME HEALTH MARKET BASKET PERCENTAGE INCREASE. —For purposes of this subsection, the term 'home health market basket percentage increase' means, with respect to a fiscal year, a percentage (estimated by the Secretary before the beginning of the fiscal year) determined and applied with respect to the mix of goods and services included in home health services in the same manner as the market basket percentage increase under section 1886(b)(3)(B)(iii) is determined and applied to the mix of goods and services comprising inpatient hospital services for the fiscal year. "(C) ADJUSTMENT FOR OUTLIERS.— The Secretary shall reduce the standard prospective payment amount (or amounts) under this paragraph applicable to home health services furnished during a period by such proportion as will result in an aggregate reduction in payments for the period equal to the aggregate increase in payments resulting from the application of paragraph (5) (relating to outliers). "(4) PAYMENT COMPUTATION.— "(A) IN GENERAL. — The payment amount for a unit of home health services shall be the applicable standard prospective payment amount adjusted as follows: " (i) CASE MIX ADJUSTMENT. — The amount shall be adjusted by an appropriate case mix adjustment factor (established under subparagraph (B)). "(ii) AREA WAGE ADJUSTMENT.— The portion of such amount that the Secretary estimates to be attributable to wages and wage-related costs shall be adjusted for geographic differences in such costs by an area wage adjustment factor (established under subparagraph (C)) for the area in which the services are furnished or such other area as the Secretary may specify. "(B) ESTABLISHMENT OF CASE MIX ADJUSTMENT FAC- TORS. —The Secretary shall establish appropriate case mix adjustment factors for home health services in a manner that explains a significant amount of the variation in cost among different units of services. "(C) ESTABLISHMENT OF AREA WAGE ADJUSTMENT FAC- TORS. —The Secretary shall establish area wage adjustment factors that reflect the relative level of wages and wagerelated costs applicable to the furnishing of home health services in a geographic area compared to the national average applicable level. Such factors may be the factors used by the Secretary for purposes of section 1886(d)(3)(E). "(5) OUTLIERS. —The Secretary may provide for an addition or adjustment to the payment amount otherwise made in the case of outliers because of unusual variations in the type or amount of medically necessary care. The total amount of the additional payments or payment adjustments made under this paragraph with respect to a fiscal year may not exceed 5 percent of the total payments projected or estimated to be made based on the prospective payment system under this subsection in that year. "(6) PRORATION OF PROSPECTIVE PAYMENT AMOUNTS. — If a beneficiary elects to transfer to, or receive services from,
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