DEVELOPMENT OF FUNDING AND RESOURCES.

(a) The department shall seek input from the lead entity regarding the feasibility of a capitated funding model for the provision of services under the pilot program. If the department determines that a capitated funding model is feasible, the department shall develop a capitated funding model that provides a fixed rate of funding per child receiving services under the pilot program.

(b) Regardless of whether the department implements a capitated funding model under Subsection (a), the department shall ensure that the funding model for the pilot program:

(1) accounts for the additional costs of providing services to geographically dispersed populations in rural areas, including:

(A) increased transportation costs;

(B) challenges in achieving economies of scale in the provision of services;

(C) increased costs for recruiting and retaining qualified staff in rural areas; and

(D) costs related to building and maintaining service provider networks in rural areas;

(2) includes financial risk-sharing mechanisms;

(3) incentivizes desired outcomes and cost savings;

(4) supports innovation;

(5) allows for the reinvestment of cost savings into the program; and

(6) allows the lead entity to flexibly allocate funds within the scope of applicable law.

(c) The department shall pursue leveraging various funding sources, including state and federal funds, to implement and sustain the pilot program.