Section 12. In administering the medical assistance programs established under this chapter, the division shall formulate such methods, policies, procedures, standards and criteria, except medical standards and criteria, as may be necessary for the proper and efficient operation of those programs in a manner consistent with simplicity of administration and the best interests of recipients.

The division may enter into any types of contracts with providers and manufacturers of medical services, equipment and supplies as the division deems necessary to carry out this chapter including, but not limited to, selective contracts, volume purchase contracts, preferred provider contracts and managed care contracts; provided, however, that those contracts shall be reviewed by the executive office for administration and finance. The division may negotiate the rate of reimbursement to the provider under any such contract and the negotiated rate shall not be subject to sections 13 to 13F, inclusive.

The division may take such further action, consistent with law and within the limits of available funds appropriated for the purposes of this chapter, as may be necessary for carrying out the purposes of this program in conformity with all requirements governing the availability of federal financial participation to the commonwealth under said Title XIX, and Title XXI including said provisions relative to notice and reimbursement, a uniform system of records and accounts to be kept by the regional or local offices and the manner and form of making reports to the division. Without limiting the generality of the foregoing, the division may withhold provider payments to ensure sufficient funds will be available to satisfy any amounts that may become due from a provider, upon notification to the provider of the amount subject to such withholding and the reasons therefor, or where otherwise required or permitted under federal law.

The division may adopt, promulgate, amend and rescind rules and regulations suitable or necessary to carry out the provisions of this chapter and said Title XIX and any amendments thereto, and as interpreted from time to time by the Secretary. Rules and regulations which restrict eligibility or covered services require a public hearing under section 2 of chapter 30A.

Such rules and regulations shall include provisions requiring providers of long term care services intending to withdraw from the medical assistance programs established by this chapter to provide for the continuing care or appropriate relocation of the medical assistance recipients residing in their facilities.

The division may require any long term care provider expressing its intention to withdraw from said programs whose facility is able to meet the standards for participation in said programs to enter into a standard provider contract with the division under which the provider continues to provide services only to those patients residing in its facility at the time the provider announces its intention to withdraw who are eligible for medical assistance or who become eligible for medical assistance during the term of the contract. Such rules and regulations shall also provide that any such provider who has withdrawn from said programs may not participate in said programs for a period of time, not exceeding five years, specified in said regulations.

Such rules and regulations shall also provide that any long term care provider whose facility is unable to meet the standards for participation in said programs shall continue to provide care to the medical assistance recipients residing in its facility until the provider has arranged for the complete relocation of all the medical assistance recipients residing in its facility in accordance with such rules and regulations and with the regulations of the department of public health.

Any provider who violates the provisions of this section by failing to provide care to a medical assistance recipient residing in its facility shall be subject to a fine of one thousand dollars for each violation.

As a method of providing medical assistance to recipients, the division is authorized to contract with any fiscal agent, institution, health insurer, health maintenance organization, health plan, management service or consultant firm consistent with the requirements of 42 CFR Part 434 to administer all or part of the services and benefits available under this chapter; or, to establish a health maintenance organization; provided, that said health maintenance organization shall be operated in accordance with applicable federal and state law.

Notwithstanding any general or special law to the contrary, no health plan offered by, or under a contract with, the division under section 9D or part (a)(26) of 42 USC section 1396d shall constitute the business of insurance and no such plan shall be subject to chapters 175 to 176O, inclusive. Nothing in this paragraph shall affect the legal status or obligations under such insurance laws of any entity otherwise constituting or conducting the business of insurance for any other purpose.