(1) To the extent allowed by law, the department shall in any contract with a Medicaid accountable care organization to implement Medicaid expansion include a requirement that the Medicaid accountable care organization reimburse hospitals in the Medicaid accountable care organization’s provider network at no less than the Medicaid fee-for-service rate.

(2) Where the department implements Medicaid expansion as a fee-for-service program, the department shall reimburse hospitals at no less than the Medicaid fee-for-service rate.

(3) Nothing in this section prohibits the department or a Medicaid accountable care organization from paying a rate that exceeds the Medicaid fee-for-service rate.