SECTION 1. Chapter 118E of the General Laws, as appearing in the 2018 official edition

is hereby amended by inserting at the end thereof the following new sections: -

Section 79. In setting Medicaid rates for nursing homes, the executive office of health and human services shall annually recognize inflationary costs by adjusting nursing home allowable resident care base year costs to the rate year using the annual unadjusted Skilled Nursing Facility Market Basket Update as established by the Centers for Medicare & Medicaid in the Medicare Skilled Nursing Facility prospective payment system rule.

Section 80. For the purpose of recognizing current labor and resident care costs in setting Medicaid nursing home rates, the executive office of health and human services shall use as base year costs for rate determination purposes the reported costs of the calendar year not more than 2 years prior to the current rate year.

Section 81. For purposes of recognizing nursing labor costs performed for resident care, the executive office of health and human services shall set the so-called Nursing Cost Per Diem at the statewide average plus 10%.

Section 82: The executive office of health and human services shall ensure that facilities that serve a disproportionately high number of Medicaid residents receive an upward adjustment of no less than 5 percent to their Medicaid rate. To qualify for this upward adjustment, Medicaid residents must represent 75 percent or greater of all resident care days.

Section 83: In setting Medicaid capital rates for the Department of Public Health Determination of Need approved construction projects beginning October 1, 2020 in connection with, but not limited to, conversion of rooms with three or more residents to one- and two-bedded rooms, the executive office of health and human services shall set the rate at no less than the capital payment using the capital standard payment calculation methodology in effect on September 30, 2019 under 101 CMR 206.05.