(1) The director of the office of behavioral health shall establish designated service areas to provide substance use disorder treatment services in a particular geographical region of the state.

(2) To be selected as a designated managed service organization to provide services in a particular designated service area, a private corporation; for profit or not for profit; or a public agency, organization, or institution shall apply to the office of behavioral health for a designation in the form and manner specified by the executive director or the executive director's designee. The designation process is in lieu of a competitive bid process pursuant to the "Procurement Code", articles 101 to 112 of title 24. The director of the office of behavioral health shall make the designation based on factors established by the executive director or the executive director's designee. The factors for designation established by the executive director or the executive director's designee include the following:

(a) Whether the managed service organization has experience working with public treatment agencies and collaborating with other public agencies;

(b) Whether the managed service organization has experience working with publicly funded clients, including expertise in treating priority populations designated by the office of behavioral health;

(c) Whether the managed service organization has offices in and provides services in the substate planning area or is willing to relocate to the substate planning area;

(d) Whether the managed service organization has experience using the cost-share principles used by the office of behavioral health in its contracts with providers and is willing to cost-share;

(e) Whether the managed service organization has developed an effective, integrated information and fiscal reporting system and has experience working with and is able to comply with state and federal reporting requirements;

(f) Whether the managed service organization has experience engaging in a clinical quality improvement process; and

(g) Whether the managed service organization has experience with public funding requirements and state contracting requirements.

(3) The designation of a managed service organization by the director of the office of behavioral health, as described in subsection (2) of this section, is an initial decision of the department which may be reviewed by the executive director in accordance with the provisions of section 24-4-105. Review by the executive director in accordance with section 24-4-105 constitutes final agency action for purposes of judicial review.

(4) The terms and conditions for providing substance use disorder treatment services must be specified in the contract entered into between the office of behavioral health and the designated managed service organization.

(5) The contract may include a provisional designation for ninety days. At the conclusion of the ninety-day provisional period, the director of the office of behavioral health may choose to revoke the contract or, subject to meeting the terms and conditions specified in the contract, may choose to extend the contract for a stated time period.

(6) A managed service organization that is designated to serve a designated service area may subcontract with a network of service providers to provide treatment services for alcohol and drug abuse and substance use disorders within the particular designated service area.

(7) (a) The director of the office of behavioral health may revoke the designation of a designated managed service organization upon finding that the managed service organization is in violation of the performance of the provisions of or rules promulgated pursuant to this article 80. The revocation must conform to the provisions and procedures specified in article 4 of title 24, and occur only after notice and an opportunity for a hearing is provided as specified in article 4 of title 24. A hearing to revoke a designation as a designated managed service organization constitutes final agency action for purposes of judicial review.

(b) Once a designation has been revoked pursuant to subsection (7)(a) of this section, the director of the office of behavioral health may designate one or more service providers to provide the treatment services pending designation of a new designated managed service organization or may enter into contracts with subcontractors to provide the treatment services.

(c) From time to time, the director of the office of behavioral health may solicit applications from applicants for managed service organization designation to provide substance use disorder treatment services for a specified planning area or areas.