(1) As used in this section:

    (a) “Medical institution” means that term as defined in section 106(2) of Act No. 280 of the Public Acts of 1939, as amended, being section 400.106 of the Michigan Compiled Laws.

    (b) “Mentally or physically disabled prisoner” means a prisoner whose physical or mental health has deteriorated to a point which renders the prisoner a minimal threat to society.

    (c) “Office of health care” means the office of health care in the department of corrections.

    (2) The director may transfer a mentally or physically disabled prisoner to a medical institution for treatment and care. The transfer shall be effective for the duration of the prisoner’s sentence, the duration of the existing medical condition causing the prisoner to be mentally or physically disabled, or for any other length of time considered necessary by the director, but shall not exceed the term of the sentence.

    (3) The office of health care, upon the request of the director, shall determine whether a prisoner is mentally or physically disabled. The department of corrections shall continue its financial responsibility for the maintenance and care of any inmate transferred to a medical institution under this act. The department shall develop regulations for reimbursement to the institutions to which the parties are transferred.