Sec. 2. The office's managed care organization shall regard a hospital as a contracted provider in the office's managed care program, which provides a capitated prepayment managed care system, for the provision of medical services to each individual who:
(1) is eligible to receive services under IC 12-15 and has enrolled in the office's managed care services program;
(2) resides in the same city in which the hospital is located; and
(3) has selected a primary care provider who:
(A) is a contracted provider with the office's managed care organization; and
(B) has medical staff privileges at the hospital.