(a) No revenues resulting from the privilege assessment established by this article and applied to increases in covered services or reimbursement levels or other enhancements of the Medicaid program shall be subject to reduction or elimination while the privilege assessment is in effect.

(b) Every nursing facility participating in the Medicaid program in the State of Alabama shall be reimbursed according to the reimbursement methodology contained in Chapter 560-X-22 of the Alabama Medicaid Agency Administrative Code (Supp. 12/31/95) on January 31, 1998, which methodology is incorporated by reference herein, except that the following shall apply:

(1) The ceiling for the operating cost center described in Title 560-X-22-.06 (2)(a) of the Alabama Medicaid Agency Administrative Code (Supp. 12/95) shall be computed at the median plus five percent.

(2) The ceiling for the direct patient care cost center described in Title 560-X-22-.06 (2)(b) of the Alabama Medicaid Agency Administrative Code (Supp. 12/95) shall be computed at the median plus 10 percent, and the provider's actual allowable reported cost per patient day plus 11 percent, or the established ceiling plus 11 percent, whichever is less, will be used for each provider's rate computation.

(3) The Medicaid Inflation Index described in Title 560-X-22-.07 of the Alabama Medicaid Agency Administrative Code (Supp. 12/95) shall be computed without regard to the trend factor variance described in Title 560-X-22-.07 (5) of the Alabama Medicaid Agency Administrative Code (Supp. 12/95).

(4) In calculating the ceiling for the operating cost center, the direct patient care cost center or the indirect patient care cost center, any increase in that ceiling over such ceiling set in the year next preceding, shall not exceed an amount equal to the product of such ceiling for the previous year times the sum of the Medicaid Inflation Index, described in Title 560-X-22-.07 of the Alabama Medicaid Agency Administrative Code (Supp. 12/95), plus four percent.

(5) In determining the reimbursement in any fiscal year to a nursing facility for certain specialized medical equipment as described in Title 560-X-22-.14 (19) of the Alabama Medicaid Agency Administrative Code (Supp. 12/95), there shall be added to the daily Medicaid per diem rate computed for that fiscal year, without regard to the cost of such specialized medical equipment, an amount equal to the actual cost of such specialized medical equipment utilized for Medicaid residents during the fiscal year next preceding and divided by the actual number of Medicaid patient days incurred during that preceding fiscal year. For the purpose of this subdivision the terms Medicaid patient days, Medicaid per diem rate, and fiscal year shall have the meanings assigned to them in Title 560-X-22 et seq. of the Alabama Medicaid Agency Administrative Code (Supp. 12/95).

(6) For the period that the federal financial participation under Title XIX of the Social Security Act for certain intergovernmental transfers is available to the Alabama Medicaid program, the Commissioner of the agency may pay an enhancement, not to exceed the upper limits for Medicare nursing facility payments, to rural hospital connected nursing facilities under governmental authority or control. Notwithstanding the foregoing, the enhancement shall not be limited by the provisions of Title 560-X-22 of the Alabama Medicaid Administrative Code.

(7) Notwithstanding subdivision (3), from October 1, 2011, through September 30, 2014, in applying the inflation factor, zero percent shall be used to compute overall rates.

(c) Payments by the Medicaid program to each nursing facility for nursing home services shall be sufficient to cover the costs determined by cost reporting principles incurred by each such nursing facility in providing care in an economical and efficient manner and that is adequate to permit the provision of care and services necessary to attain or maintain the highest practicable, physical, mental, and psychosocial well-being of each resident eligible for Alabama Medicaid nursing home benefits in conformity with applicable state and federal laws, rules and regulations and quality and safety standards.

(d) Notwithstanding subsection (b), Medicaid shall be empowered to create a special reimbursement model to accommodate enhanced reimbursed care provided in dedicated ventilator units in nursing facilities that meet special physical plant requirements such as dedicated emergency power generation, through-the-wall medical gases and suction, 24-hour per day staffing with trained licensed respiratory therapists, and medical direction through contract with or employment of an Alabama licensed physician who is a board certified pulmonologist.