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(l) The department will not pay for hearing item rental or a rent-to-purchase arrangement if the rental price would be more expensive than the purchase price. The department will pay a hearing services provider for hearing item rental or a rent-to-purchase arrangement as follows:

(1) for a rental period that is 30 days or longer, the department will pay a monthly rental fee that is equal to 10 percent of the allowed purchase price, as calculated under 7 AAC 145.340;

(2) for a rental period that is less than 30 days, the department will pay an amount equal to the monthly rental fee divided by the number of days in the month, times the number of days in the rental period;

(3) the department will not pay a rental fee for a rental period that exceeds 12 months of continuous use; if the length of need is more than 12 months of continuous use, the prescriber must administer another hearing assessment and request prior authorization for the purchase of a new hearing item; the department will pay the difference between the allowed purchase price and the total monthly rental fees already paid by the department if the hearing services provider

(A) transfers ownership of the hearing item, including any warranty, to the recipient for whom it was rented; and

(B) replaces the rented hearing item with a new hearing instrument if the rented hearing item was previously used by anyone other than the recipient before it was rented to the recipient;

(4) before the total rental fee payments equal the allowed purchase price, the department will not separately pay the cost of labor, repairs, and maintenance; labor, repairs, and maintenance must be included in the rental fee and must be documented in the rental agreement;

(5) when total rental payments reach the allowed purchase price of a new hearing item, the department will pay the cost of labor, repair, and maintenance after 60 days or when the warranty expires, whichever is later. (m) The department will not pay a hearing services provider separately for the provider’s administrative expenses. The following costs are considered administrative expenses and are included in the payment for the hearing item:

(1) telephone responses to questions;

(2) mileage;

(3) travel expenses;

(4) travel time;

(5) equipment set up;

(6) installation;

(7) office inventory supply;