(1) The Department of Health and Human Services, through its care management units, shall establish a statewide project to prevent premature institutionalization of nursing facility medicaid-eligible applicants sixty-five years of age and older through preadmission screening. In any case in which a determination has not been made within forty-eight hours, the nursing facility applicant shall be deemed appropriate for nursing home admission until such time as preadmission screening is completed, notwithstanding that a preadmission screening has not been done. The Department of Health and Human Services shall use the preadmission screening services of the project.

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(2) Subsection (1) of this section becomes operative on July 1, 1997.