SECTION 1.   Section 1 of Chapter 118G of the General Laws, as most recently amended by chapter 324 of the acts of 2006, is hereby further amended by inserting, after the definition of “health maintenance organization,” the following:— “Home health care provider,” any organization certified as a provider of services under the Medicare Health Insurance Program for the Aged (Title XVIII of the federal Social Security Act) that meets the Medicare and Medicaid Conditions of Participation for Home Health Agencies in Massachusetts.

SECTION 2.  Section 7 of said Chapter 118G, as appearing in the 2004 Official Edition, is hereby amended by deleting clause (1) thereof and inserting in its place the following:—(1) shall determine, after public hearing, at least annually for institutional providers and for home health care providers, and at least biennially for all other non-institutional providers, the rates to be paid by each governmental unit to providers of health care services;

SECTION 3.  Said chapter 118G is hereby further amended by adding at the end thereof the following new section:—Section X. (a) Notwithstanding the provision of any general or special law to the contrary, including any other section of chapter 118G or chapter 118E of the General Laws, the division shall (i) adjust rates of payment for home health care providers on an annual basis, with such rates to be established as of January first of each year, and (ii) establish rates of payment for home health care providers on a prospective basis, whenever possible.  For purposes of (ii) above, the division shall use as base year costs for rate determination purposes for a particular rate year the reported costs of a calendar year not more than four years prior to such particular rate year, adjusted for inflation, changes in technology and such other factors as the division may reasonably determine.

(b) This section shall apply to the rates established for home health care providers pursuant to any waiver of otherwise applicable federal requirements that the division or the division of medical assistance has obtained or may obtain from the secretary of health and human services for the purpose of implementing any type of managed care service delivery system, or for any home health services purchased by the executive office of elder affairs pursuant to an interagency services agreement with the division of medical assistance. 

SECTION 4. This act shall take effect upon its passage.