; (ii) ensure that the States represent a diverse selection of geographic areas, including rural and underserved areas; and (iii) give preference to States that demonstrate the potential to expand the availability of and access to maternity care services in a demonstration area and increase the quality of services provided by freestanding birth centers without increasing net Federal spending. (E) Payment for services provided by freestanding birth centers (i) In general Amounts expended by a State to conduct a demonstration program under this paragraph shall be treated as medical assistance for purposes of subsection (a) of this section. Under a demonstration program conducted under this paragraph by a State, payments shall be made by the State for freestanding birth center services that meet the criteria established under paragraph (2)(A)(i) furnished by a freestanding birth center in accordance with the prospective payment system for such services established pursuant to the guidance issued under paragraph (2)(A)(ii). (ii) Limitations Payments shall be made under this subparagraph to a State only for freestanding birth center services that are— (I) described in the demonstration program application submitted by the State and approved by the Secretary