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HD 577

An Act relative to stabilizing the Commonwealth’s nursing facilities

194th Legislature (2025-2026) Introduced by John Lawn

The bill aims to stabilize Medicaid payments to Massachusetts nursing facilities by updating rate calculations for inflation, current costs, and high-Medicaid-use facilities, plus

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Bill Summary · HD 577

Summary of House Bill HD 577: An Act relative to stabilizing the Commonwealth’s nursing facilities

Overview

HD 577 proposes amendments to Chapter 118E of the General Laws to stabilize Medicaid funding for Massachusetts nursing facilities by adjusting rate-setting to reflect inflation, current costs, and the needs of facilities with high Medicaid usage. The bill would add Sections 79–83 to Chapter 118E, directing how the Executive Office of Health and Human Services (EOHHS) calculates Medicaid rates and capital payments for nursing facilities.

Key Provisions (Sections 79–83)

  • Section 79 — Inflation adjustment using CMS Market Basket: When setting Medicaid rates for nursing homes, EOHHS must annually recognize inflationary costs by adjusting allowable resident care base year costs to the rate year using the annual unadjusted Skilled Nursing Facility (SNF) Market Basket Update established by CMS in the SNF prospective payment system rule.

  • Section 80 — Use of recent base year costs: For rate determination, EOHHS shall use as base year costs the calendar year costs not more than two years prior to the current rate year. This seeks to keep cost data reasonably current without extending too far back.

  • Section 81 — Nursing Cost Per Diem (NCPD) adjustment: To recognize nursing labor costs in resident care, the NCPD shall be set at the statewide average plus 10%. This defines a floor for labor-related reimbursements above the statewide mean.

  • Section 82 — Disproportionate high Medicaid resident adjustments: Facilities with a disproportionately high share of Medicaid residents must receive an upward adjustment of no less than 5% to their Medicaid rate. Qualification requires Medicaid residents to represent at least 75% of all resident care days.

  • Section 83 — Capital rate safeguards for certain CON projects: For DPH Determination of Need-approved construction projects begun on or after Oct 1, 2020 (including projects converting multi-bed rooms to 1- and 2-bed rooms), the rate must be no less than the capital payment under the pre-2020 capital standard payment methodology (as of Sept 30, 2019, 101 CMR 206.05).

Affected Parties

  • Massachusetts nursing facilities participating in Medicaid
  • Facilities with high Medicaid resident shares (≥75% of care days)
  • EOHHS (role in rate setting)
  • Department of Public Health (DPH) via Determination of Need capital rate considerations

Impact and Rationale

  • Aligns Medicaid facility payments with current cost pressures, particularly inflation in labor and resident care costs.
  • Ensures facilities serving more Medicaid residents receive measured support to stabilize operations.
  • Maintains a predictable framework for capital-related reimbursements tied to historic calculation methods, especially for facilities undertaking conversions to smaller room configurations.
  • Overall aim: reduce volatility in nursing facility revenues and improve financial stability of facilities serving Massachusetts residents.

Implementation Timeline and Status

  • The bill text indicates introduction in the 2025-2026 General Court (House Docket No. 577, filed January 10, 2025; introduced in the 194th General Court). Specific status in the current session is not provided in the summary.
  • If enacted, sections would amend Chapter 118E by adding Sections 79–83 and apply to rate setting going forward, incorporating annual inflation updates, updated base years, and targeted adjustments.

Compiled from official sources — confirm details with the bill’s official record.

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