(B) The department shall implement the care management system in some or all counties and shall designate the medicaid recipients who are required or permitted to participate in the system. In the department's implementation of the system and designation of participants, all of the following apply:

1. (1) In the case of individuals who receive medicaid on the basis of being included in the category identified by the department as covered families and children, the department shall implement the care management system in all counties. All individuals included in the category shall be designated for participation, except for individuals included in one or more of the medicaid recipient groups specified in 42 C.F.R. 438.50(d). The department shall ensure that all participants are enrolled in medicaid managed care organizations that are health insuring corporations.
2. (2) In the case of individuals who receive medicaid on the basis of being aged, blind, or disabled, the department shall implement the care management system in all counties. Except as provided in division (C) of this section, all individuals included in the category shall be designated for participation. The department shall ensure that all participants are enrolled in medicaid managed care organizations that are health insuring corporations.
3. (3) Alcohol, drug addiction, and mental health services covered by medicaid shall not be included in any component of the care management system when the nonfederal share of the cost of those services is provided by a board of alcohol, drug addiction, and mental health services or a state agency other than the department of medicaid, but the recipients of those services may otherwise be designated for participation in the system.

(C)

1. (1) In designating participants who receive medicaid on the basis of being aged, blind, or disabled, the department shall not include any of the following, except as provided under division (C)(2) of this section:

   1. (a) Individuals who are under twenty-one years of age;
   2. (b) Individuals who are institutionalized;
   3. (c) Individuals who become eligible for medicaid by spending down their income or resources to a level that meets the medicaid program's financial eligibility requirements;
   4. (d) Dual eligible individuals;
   5. (e) Individuals to the extent that they are receiving medicaid services through a medicaid waiver component.

2. (2) The department may designate any of the following individuals who receive medicaid on the basis of being aged, blind, or disabled as individuals who are permitted or required to participate in the care management system:

   1. (a) Individuals who are under twenty-one years of age;
   2. (b) Individuals who reside in a nursing facility;
   3. (c) Individuals who, as an alternative to receiving nursing facility services, are participating in a home and community-based services medicaid waiver component;
   4. (d) Dual eligible individuals.

(D) Subject to division (B) of this section, the department may do both of the following under the care management system:

1. (1) Require or permit participants in the system to obtain health care services from providers designated by the department;
2. (2) Require or permit participants in the system to obtain health care services through medicaid managed care organizations.