(1) Provisions for exemptions.

The secretary's designee shall grant an exemption from the requirements for a certificate of need for the construction, development, or other establishment of a nursing home, or the addition of beds to an existing nursing home, that is owned and operated by a continuing care retirement community meeting the eligibility requirements of (a) of this subsection and submitting an application for an exemption meeting the requirements of (b) of this subsection.

(a) Eligibility requirements. To be eligible for an exemption under this section, an applicant entity shall demonstrate that:

(i) Nursing home services will be offered only to contractual residents;

(ii) Residents will be provided a contractually guaranteed range of services from independent living through skilled nursing, including some assistance with daily living activities;

(iii) The facility contractually assumes responsibility for the cost of services exceeding the residents financial responsibility under the contract, so that no third party, including the medicaid program, is liable for the costs of care, even if the resident depletes his or her personal resources. This exclusion does not pertain to insurance purchased by the retirement community or its residents;

(iv) The entity has offered continuing care contracts and has operated a nursing home continuously since January 1, 1988, or has obtained a certificate of need to establish a nursing home;

(v) A binding agreement is maintained with the state assuring that financial liability for services to residents, including nursing home services, will not fall upon the state;

(vi) It does not operate, and has not undertaken a project that would result in the ratio of nursing home beds to independent living units exceeding one nursing home bed for every four independent living units, exclusive of nursing home beds; and

(vii) It has obtained a professional review of pricing and long-term solvency of the applicant entity within the prior five years which was fully disclosed to residents.

(b) Requirements for an application for exemption. An application for an exemption from a certificate of need shall meet the following requirements:

(i) The application for an exemption shall be submitted at least thirty days prior to the commencement of construction, submitting an application for nursing home licensure, or commencing operation of a nursing home, whichever occurs first;

(ii) A complete application shall be submitted in such form and manner as has been prescribed by the department. The information which the department prescribes shall include:

(A) All of the information required to make a determination that the applicant entity qualifies in accordance with (a) of this subsection; and

(B) A complete description of the construction, development or other establishment of a nursing home, or the addition of nursing home beds to which the exemption application pertains.

(2) Action on an application for exemption.

(a) Within thirty days after receipt of a complete application for exemption from certificate of need requirements, the department shall send the applicant a written notice whether the exemption has been granted or denied.

(b) The secretary's designee shall deny an exemption if it is determined the applicant has not met the requirements of subsection (1)(a) and (b) of this section. Written notice of the denial shall include the specific reasons for the denial.

(3) Subsequent sale, lease, acquisition, or use of, part or all, of an exempt continuing care retirement community.

Subsequent sale, lease, acquisition or use of exempt continuing care retirement communities shall require prior certificate of need approval to qualify for licensure as a nursing home unless the department determines such sale, lease, acquisition, or use is by a continuing care retirement community that meets the conditions identified in subsection (1)(a) and (b) of this section.