(a) The individual or entity responsible for adopting rules for an agency shall adopt specific rules for the agency that define good cause for nonrenewal of a provider's contract or reduction of a provider's funding.
(b) In deciding whether to renew a provider's contract or to reduce a provider's funding, an agency shall consider:
(1) the effectiveness of services rendered by various providers;
(2) the cost efficiency of programs undertaken by each provider;
(3) the extent to which the services of each provider meet the needs of groups or classes of individuals who are poor or underprivileged or have a disability;
(4) the degree to which services can be provided by other programs in that area;
(5) the extent to which recipients are involved in the providers' decision making; and
(6) the need to provide services in the state without discrimination as to race, religion, or geographic region.