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7 AAC 150.190. Optional payment rate methodology and criteria for small facilities. (a) The provisions of this section apply to a small facility that

(1) had 4,000 or fewer acute care patient days at an general acute care, specialty, or inpatient psychiatric hospital or at a combined general acute care hospital-nursing facility or had 15,000 or fewer Medicaid nursing facility days at a nursing facility that is not combined with a general acute care hospital during the small facility’s fiscal year that ended 12 months before the beginning of the prospective year;

(2) elects to participate in rate setting under (c) of this section; and

(3) is not a general acute care hospital reimbursed under the Diagnosis Related Groups (DRG) payment methodology under 7 AAC 150.250. (b) The department will use the methodology and criteria set out in this section to review and set prospective payment rates for a small facility that elects rate setting under (c) of this section. (c) A small facility without a rate agreement may not elect to participate in a rate agreement under (d) of this section until after a re-basing occurs under 7 AAC 150.160. A small facility that does not elect to participate in a new rate agreement after a rate agreement expires may not elect to participate in a rate agreement under (d) of this section until after a re-basing occurs under 7 AAC 150.160. A small facility that elects to participate in rate setting under this section must

(1) make an affirmative election to do so; and

(2) notify the department staff that oversees Medicaid payment rates of the facility’s election on the written notification form provided by the department under this section and return the form to the department staff that oversees Medicaid payment rates not later than 30 days after the date of the department’s providing the notification by mail or electronic mail. (d) The department will not establish prospective payment rates under this section for a small facility unless the

(1) small facility enters into a rate agreement with the department that contains at least the following terms:

(A) the rate agreement between the department and the small facility may not expire or lapse before four facility fiscal years have elapsed;

(B) the small facility may not revoke its election to participate in rate setting under this section until after the last day of the small facility’s fourth fiscal year; and

(2) department determines that the rate agreement does not conflict with the public concern that needy persons in the state receive uniform and high quality medical care; factors that the department will consider in making that determination include

(A) the distribution of medical services and resources in the communities of the