(b) Any application for establishment wherein a determination of public need is made pursuant to this section, shall be subject to the provisions of subdivision (d) of section 670.1 of this Part.

1. (1) In determining the need for residential health care facilities, beds and services, consideration shall be given to the needs of persons who receive or are eligible to receive medical assistance benefits at the time of admission to a facility pursuant to title XIX of the Federal Social Security Act and title 11 of article 5 of the Social Services Law, hereafter referred to as Medicaid patients, and the extent to which the applicant serves or proposes to serve such persons, as reflected by factors including, but not necessarily limited to, the applicant's admissions policies and practices. An application by an applicant that is or will be a provider that participates in the medical assistance (Medicaid) program shall not be approved unless the applicant agrees to comply with the requirements of this subdivision. An applicant that, at the time of consideration of its application by the Public Health Council, proposes not to participate in the Medicaid program may be approved, provided all other review criteria have been met, upon the condition that if, in the future, it does participate in the Medicaid program, it would comply fully with the requirements of this subdivision.
2. (2) To ensure that the needs of Medicaid patients in an applicant's service area are met and that such patients have adequate access to appropriate residential health care facilities, beds and services, applicants shall be required to accept and admit at least a reasonable percentage of Medicaid patients as determined pursuant to this subdivision. Such reasonable percentage of Medicaid patient admissions, also referred to herein as the Medicaid patient admissions standard, shall be equal to 75 percent of the annual percentage of all residential health care facility admissions, in the long-term care planning area in which the applicant facility is located, that are Medicaid patients. The calculation of such planning area percentage shall not include admissions to residential health care facilities that have an average length of stay of 30 days or less. If there are four or fewer residential health care facilities in a planning area, the applicable Medicaid patient admissions standard for such planning area shall be equal to 75 percent of the planning area annual percentage of all residential health care facility admissions that are Medicaid patients or 75 percent of the annual percentage of all residential health care facility admissions, in the health systems agency area in which the facility is located, that are Medicaid patients, whichever is less. In calculating such percentages, the department will use the most current admissions data which have been received and analyzed by the department. An applicant will be required to make appropriate adjustments in its admissions policies and practices so that the proportion of its own annual Medicaid patient admissions is at least equal to 75 percent of the planning area percentage or health systems agency area percentage, whichever is applicable.

3. (3) The proportion of an applicant's admissions that must be Medicaid patients, as calculated under paragraph (2) of this subdivision, may be increased or decreased based on the following factors:

   1. (i) the number of individuals within the planning area currently awaiting placement to a residential health care facility and the proportion of total individuals awaiting such placement that are Medicaid patients, provided that patients awaiting placement include, but need not be limited to, alternate level of care patients in general hospitals;
   2. (ii) the proportion of the facility's total patient days that are Medicaid patient days and the length of time that the facility's patients who are admitted as private paying patients remain such before becoming Medicaid eligible;
   3. (iii) the proportion of the facility's admissions who are Medicare patients or patients whose services are paid for under provisions of the Federal Veterans' Benefit Law;
   4. (iv) the facility's patient case mix based on the intensity of care required by the facility's patients or the extent to which the facility provides services to patients with unique or specialized needs; and

   5. (v) the financial impact on the facility due to an increase in Medicaid patient admissions.

      (4)

   6. (i) An applicant shall submit a written plan, subject to the approval of the department, for reaching the Medicaid patient admissions standard required by this subdivision. The plan shall provide for reaching the standard within no longer than a two-year period and the facility shall give preference, as necessary, to Medicaid patients in order to reach the admissions standard within the prescribed time period.
   7. (ii) Once the Medicaid patient admissions standard is reached, the facility shall not reduce its proportion of Medicaid patient admissions so as to go below the standard unless and until the applicant, in writing, requests the approval of the department to adjust the standard and the department's written approval is obtained. In reviewing requests to adjust a facility's Medicaid patient admissions standard, the department shall consider factors which may include, but need not be limited to, those factors set forth in paragraphs (2) and (3) of this subdivision.

   8. (iii) After a facility's initial Medicaid patient admissions standard has been reached, the department may increase such facility's Medicaid patient admissions standard, based on the criteria set forth in this subdivision, if the percentage of Medicaid patients admitted by residential health care facilities in the facility's planning area or health systems agency area, as appropriate, increases due to factors other than an increase in Medicaid patient admissions by the applicant.

      (5)

   9. (i) Subject to the provisions of subparagraph (ii) of this paragraph, after the phase-in period provided for in paragraph (4) of this subdivision, a facility shall be prohibited from failing, refusing or neglecting to accept or admit a Medicaid patient for whom it is otherwise able to provide care, regardless of whether the level of reimbursement received for such patient is less than the rate the facility charges private pay patients, unless the facility has reached and is maintaining compliance with the Medicaid patient admissions standard imposed by this subdivision. Compliance with the requirements of this subdivision shall be determined on the basis of a facility's total annual admissions, so that a facility may exercise its discretion in determining when during a year it will admit a sufficient number of Medicaid patients to maintain its Medicaid patient admissions standard.
   10. (ii) A facility may be exempt from the requirement of admitting a Medicaid patient in order to meet or maintain its Medicaid patient admissions standard if it can demonstrate in writing to the satisfaction of the commissioner that the Medicaid patient was denied admission solely in order to admit another patient who had a greater need of residential health care facility services, as determined by the intensity of care anticipated to be required by such patient, and that there was only one bed available in the facility at the time of the admission decision to accommodate a new admission. Facilities shall not be required to obtain prior department approval in order to accept a non-Medicaid patient in place of a Medicaid patient pursuant to this subparagraph, but shall maintain sufficient documentation including, but not necessarily limited to, a copy of the patient review instrument for the patient admitted and the Medicaid patient denied admission in order to justify the admission decision. Copies of such documentation shall be provided to the department upon request.

(c)