(a) The counties contracting pursuant to subdivision (a) of Section 14087.5 may arrange for the delivery of Medi-Cal services to Medi-Cal beneficiaries, except that the counties may exclude all of the following:
(1) Long-term care services rendered by nursing facilities or all categories of intermediate care facilities for the developmentally disabled.
(2) Dental services.
(3) Services in any federal or state hospital.
(4) Home- or community-based care waivered services.
(b) Exclusion of these services shall be subject to the approval of the department and the California Medical Assistance Commission.