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(iv) the base per visit rate obtained under (iii) of this subparagraph will be adjusted to take into account any increase or decrease in the scope of services during fiscal year 2001 that the department has approved under (f) of this section;

(2) beginning with the health clinic fiscal year 2003, and for each health clinic fiscal year that follows, the payment rate as calculated in (1) of this subsection will be

(A) increased in that fiscal year by using the first quarter publication of Global Insight’s Healthcare Cost Review, Skilled Nursing Facility Total Market Basket for yearly adjustment factors applied to health clinics; for state fiscal year 2018, the department will not adjust for inflation the payment rate under this subparagraph; and

(B) adjusted for that fiscal year to take into account any change in the scope of services that the department has approved under (f) of this section, whether the change in the scope of services is proposed for that fiscal year or occurred in the preceding fiscal year;

(3) the payment rate calculated under this subsection must result in a payment to the health clinic that is equal to or greater than the amount required to be paid to the clinic under 42 U.S.C. 1396a(bb)(1) — (6), adopted by reference in 7 AAC 160.900; if the payment rate calculated under this subsection is less than that amount, the department will pay the health clinic under (b) of this section; for state fiscal year 2018, the department will not adjust for inflation the payment rate under (A) or (B) of this paragraph; to ensure compliance with this paragraph, the department will evaluate annually the

(A) Medicare Economic Index as required by 42 U.S.C. 1396a(bb)(3)(A), adopted by reference in 7 AAC 160.900; and

(B) number set out in the first quarter publication of Global Insight’s Health-Care Cost Review, Skilled Nursing Facility Total Market Basket;

(4) the department will annually evaluate the payment rate calculated under this subsection to ensure it is within the payment limit set under 42 C.F.R. 447.300 — 447.371, adopted by reference in 7 AAC 160.900. (d) For purposes of this section, the department will consider health clinic costs to be allowable costs if they are documented costs as described in 42 C.F.R. 405.2468, adopted by reference in 7 AAC 160.900, after all adjustments, cost disallowances, and reclassifications have been made, if those costs are reasonable in amount, if they are proper and necessary for the efficient delivery of health clinic services, and if they are not disallowed under AS 47.07, 7 AAC 105 — 7 AAC 160, or applicable federal statutes or regulations. Allowable costs do not include overhead costs not directly related to health clinic services, bad debts, charity care, contractual allowances, return on equity, income taxes, or services and supplies furnished to non-Medicaid recipients for free or without regard to the recipient’s ability to pay. (e) In establishing a payment rate under this section, the department will not include services that are paid by a different payment rate methodology in 7 AAC 105 — 7 AAC 160. Services that are paid by a different payment rate methodology include