SECTION 1. Notwithstanding any special or general law to the contrary, the executive office of health and human services shall investigate and establish a zero interest loan trust fund for the purpose of establishing a program to convert entire or parts of licensed nursing facilities to single-occupancy rooms or community-based residences. The community-based residences shall provide alternative services for underserved elderly and disabled persons and shall include, but not be limited to, affordable independent housing, assisted living residences, group homes for the developmentally disabled, and outpatient medical and dental services programs. The office shall establish the criteria for nursing facilities to be eligible for conversions, the physical plant re-adaptation of nursing facilities, and the eligible enrollees in the conversion program as well as a funding program to support the operations of single-occupancy rooms in nursing facilities. Provided further an advisory committee shall oversee the development of the program. Said committee shall be composed of the following members, or their designee: the secretary health and human services, the secretary of elder affairs, the director of the office of Medicaid, the commissioner of public health, the chairs of the joint committee on health care financing, the chairs of the house and senate committees on ways and means, a representative from the Massachusetts Senior Care Association, a representative from Leading Age and two consumer representatives.

SECTION 2. Notwithstanding any special or general law to the contrary, there shall be established and set up on the books of the commonwealth the Massachusetts Nursing Home Conversion Loan Fund, hereinafter referred to as the fund, the proceeds of which shall be used to provide zero-interest loans to convert entire or parts of licensed nursing facilities to community-based residences. There shall be credited to the fund any appropriations or other monies authorized by the general court and specifically designated to be credited to the fund; proceeds of any bonds or notes of the commonwealth issued for the purpose; any federal grants or loans; any private gifts, grants or donations made available; and any income derived from the investment of amounts credited to the fund. The secretary of the executive office of health and human services shall pursue and maximize all opportunities to qualify for federal financial participation.

SECTION 3. Notwithstanding any special or general law to the contrary, the executive office of health and human services shall establish a bed reconfiguration program which shall incentivize nursing facilities to reduce bed capacity. This program shall include, but not be limited to, financial incentive payments for the removal of beds, for the purpose of covering total facility costs that will now be allocated over a smaller bed capacity.

SECTION 4. Notwithstanding any special or general law to the contrary, the Department of Public Health shall establish a hardship waiver program to 105 CMR 150.017 and 105 CMR 150.320 for facilities that meet certain criteria including, but not limited to, facilities that are landlocked, facilities that are located in historical designation areas, and facilities who care for specialized resident populations.

SECTION 5. Chapter 118E of the General Laws is hereby amended by inserting after section 78 the following section:-

Section 79. 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.