(a) No insurer providing inpatient psychiatric care coverage to individuals covered by that insurer's plan shall deny payment to a State-owned psychiatric hospital for medically necessary services provided to that individual solely on the basis that the hospital is a government-owned facility, has no signed provider agreement with the insurer or does not participate in the insurer's network.

(b) The provision of psychiatric services at a State-owned psychiatric hospital shall be an assignment by operation of law to the hospital of the individual's right to recover for such services from that individual's insurer. The department may sue for and recover any amounts due from that individual's insurer.

(c) In determining the medical necessity of any inpatient psychiatric stay at a State-owned psychiatric hospital, it shall be rebuttably presumed that the patient could not be treated in an alternative setting if either of the following applies:

(d) State-owned psychiatric hospitals may enter into provider agreements with insurers and may accept payments under such provider agreements as payment in full, excluding the patient's liability for unpaid deductible and coinsurance amounts. In the absence of a provider agreement, the insurer shall make payment for a hospital stay at its usual rate of payment to contracted psychiatric hospital providers or, in the absence of such a rate, the rate that the medical assistance program would pay for such care.

(e) The department may administratively impose a penalty of up to one thousand dollars ($1,000) per violation against any insurer that fails to comply with the requirements of this section.

(f) For the purposes of this section, the term “insurer” includes: