(A) If, upon completion of the hearing and consideration of the record, the court finds upon clear and convincing evidence that the person is mentally ill, needs involuntary treatment and because of his condition:

(1) lacks sufficient insight or capacity to make responsible decisions with respect to his treatment; or

(2) there is a likelihood of serious harm to himself or others, the court shall order in-patient or out-patient treatment at a mental health facility, public or private, designated by the Department of Mental Health and may order out-patient treatment following in-patient treatment. If the court finds that the person is not mentally ill and not in need of involuntary treatment, the court shall dismiss the proceedings.

(B) If the court orders out-patient treatment and the respondent fails to adhere to the prescribed out-patient treatment order or program, the treatment facility shall report the failure to the court and the court upon notice to the respondent and his counsel shall order a supplemental hearing and may further order in-patient treatment in a designated facility as needed. The probate court issuing the order for out-patient treatment shall maintain jurisdiction over the person for the purpose of supplemental proceedings as set forth in this chapter and every order issued pursuant to this subsection must be so conditioned. An order for in-patient treatment at a mental health facility does not raise a presumption of incompetency and no rights may be denied a person unless specifically ordered by the court.