To amend title XVIII of the Social Security Act to direct the Secretary of Health and Human Services to carry out a demonstration program under the Medicare Program to examine the clinical and cost effectiveness of providing medical adult day care center services to Medicare beneficiaries.

Directs the Secretary of Health and Human Services to establish a demonstration project under which the Secretary shall, as part of a plan of an episode of care for home health services established for a Medicare beneficiary, permit a home health agency, directly or under arrangements with a medical adult day care facility, to provide medical adult day care services as a substitute for a portion of home health services that would otherwise be provided in the beneficiary's home.