(1) Provisions for exemptions of qualified rural hospitals and rural health care facilities.

The secretary's designee shall grant an exemption from the requirement for a certificate of need for an increase in licensed bed capacity to a rural hospital meeting the eligibility requirements of (a) of this subsection and submitting an application for an exemption meeting the requirements of (c) of this subsection. The secretary's designee shall grant an exemption from the requirement for a certificate of need for the construction, development, or other establishment of a new hospital to a rural health care facility meeting the eligibility requirements of (b) of this subsection and submitting an application for an exemption meeting the requirements of (c) of this subsection.

(a) Eligibility requirements for a rural hospital exemption. To be eligible for an exemption from the requirements under this section, a rural hospital, shall demonstrate that:

(i) The applicant hospital meets the definition of a rural hospital as defined by the department;

(ii) The request is being made within three years of the date the beds licensed under chapter 70.41 RCW were reduced;

(iii) The increase in licensed beds will result in no more than had previously been licensed; and

(iv) The rural hospital became a rural primary care hospital under the provisions of Part A Title XVIII of the Social Security Act Section 1820, 42 U.S.C., 1395c et seq. after its licensure reduction.

(b) Eligibility requirements for a rural health care facility exemption. To be eligible for an exemption from the requirements under this section, a rural health care facility, shall demonstrate that:

(i) The applicant facility meets the definition of a rural health care facility under RCW 70.175.100;

(ii) The applicant facility was previously licensed as a hospital under chapter 70.41 RCW;

(iii) The request is being made within three years of the effective date of the rural health care facility license;

(iv) There will be no increase in the number of beds previously licensed under chapter 70.41 RCW and there is no redistribution in the number of beds used for acute care or long-term care;

(v) The rural health care facility has been in continuous operation; and

(vi) The rural health care facility has not been purchased or leased.

(c) Requirements for an application for exemption by a rural hospital or rural health care facility. An application for an exemption from a certificate of need shall meet the following requirements:

(i) The application for a rural hospital exemption shall be submitted at least thirty days prior to the effective date of the hospital license that increases the number of beds at the rural hospital or at the time an application is made to the department to increase the number of licensed beds at the rural hospital, whichever occurs first.

(ii) The application for a rural health care facility exemption shall be submitted at least thirty days prior to the effective date of the hospital license that converts the rural health care facility back to a hospital or at the time an application is made to the department to convert back to a hospital, whichever occurs first;

(iii) 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:

All of the information required to make a determination that the rural hospital qualifies in accordance with (a) of this subsection or that the rural health care facility qualifies with (b) of this subsection.

(2) Action on an application for exemption by a rural hospital or rural health care facility.

(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 request has been granted or denied.

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