(1) In accordance with section 9435(b) of the Omnibus Budget Reconciliation Act of 1986, Public Law 99-509, the department may not pay a nursing facility provider for services provided to an eligible Medicaid/Medicare individual who has elected the Medicare hospice benefit.

(a) This rule applies where the hospice provider and the nursing facility provider have made a written agreement under which the hospice provider agrees to provide professional management of the individual's hospice care and the nursing facility provider agrees to provide room and board to the individual.

(b) When this rule applies, the department will pay the hospice provider in accordance with the department's rules governing Medicaid reimbursement to hospice providers.