(A) The medicaid director may establish an alternative purchasing model for nursing facility services provided by designated discrete units of nursing facilities to medicaid recipients with specialized health care needs. If the alternative purchasing model is established, the director shall do all of the following with regard to the model:

1. (1) Establish criteria that a discrete unit of a nursing facility must meet to be designated as a unit that, under the alternative purchasing model, may admit and provide nursing facility services to medicaid recipients with specialized health care needs;
2. (2) Specify the health care conditions that medicaid recipients must have to have specialized health care needs, which may include dependency on a ventilator, severe traumatic brain injury, the need to be admitted to a long-term acute care hospital or rehabilitation hospital if not for nursing facility services, and other serious health care conditions;

3. (3) For each fiscal year, set the total per medicaid day payment rate for nursing facility services provided under the alternative purchasing model at either of the following:

   1. (a) Sixty per cent of the statewide average of the total per medicaid day payment rate for long-term acute care hospital services as of the first day of the fiscal year;
   2. (b) Another amount determined in accordance with an alternative methodology that includes improved health outcomes as a factor in determining the payment rate;
4. (4) Require, to the extent the director considers necessary, a medicaid recipient to obtain prior authorization for admission to a long-term acute care hospital or rehabilitation hospital as a condition of medicaid payment for long-term acute care hospital or rehabilitation hospital services.