Each contractor who is rendering authorized services to the department or its clients shall submit claims for payment, as agreed upon between the department and the contractor, no later than twelve months after the date of service. If the claims for payment are not presented within the twelve-month period there shall not be a charge against the state. The twelve-month period may be shortened by contract or regulation. The twelve-month period may be extended by contract or regulation, but only if required by applicable state or federal law or regulation. The department may grant exceptions to the twelve-month period for initial claims when billing delays are caused by either of the following:

(a) The department's certification or authorization of services for a client for a retroactive period; or

(b) The provider proves to the department's satisfaction that there are other extenuating circumstances.

This provision shall apply to all claims for payment submitted on or after the effective date.