(1)    In order to enable the state to budget accurately for medical assistance and to allocate fiscal resources most appropriately, the maximum number of licensed nursing home beds statewide is 51,795 and the maximum number of beds statewide in facilities primarily serving the developmentally disabled is 3,704. The department may adjust these limits on licensed beds as provided in subs. (2) to (6). The department shall also biennially recommend changes to this limit based on the following criteria:

      (a)    The number of licensed nursing home beds.

      (c)    The total number of additional nursing home beds approved under s. 150.29.

      (d)    The availability of alternatives less costly than increasing the number of nursing home beds to provide long-term care.

      (e)    The amount of medical assistance funds available or to be made available in the following biennial executive budget for additional nursing home beds.

      (f)    The cost of providing additional nursing home beds.

   (2)   The department may increase the statewide bed limit specified in sub. (1) to account for the conversion of community-based residential facilities to nursing homes in order to maintain medical assistance certification, as provided in s. 49.45 (16).

   (2m)   

      (a)    The department may, on July 1, 1990, increase the statewide bed limit in sub. (1) by not more than 25 beds to permit the permanent and complete conversion of a hospital to a nursing home if the hospital seeking conversion:

         1.    Had, on January 1, 1990, an approved bed capacity of no more than 50 beds; and

         2.    Ceases to exist as an acute care hospital by July 1, 1990.

      (b)    The department shall decrease the number of beds authorized for increase under par. (a) by the amount of any addition in the actual number of available beds within the limit specified in sub. (1), up to 25 beds, that exists on July 1, 1990.

   (2r)   

      (a)    The department may, on July 1, 1998, increase the statewide bed limit in sub. (1) by not more than 6 beds to permit the permanent and complete closure of a hospital and its partial conversion to a nursing home if the hospital seeking partial conversion:

         1.    Had, on January 1, 1998, an approved bed capacity of not more than 50 beds.

         2.    Is located north of USH 8.

         3.    Ceases to exist as an acute care hospital by July 1, 1998.

      (b)    The department shall decrease the number of beds authorized for increase under par. (a) by the amount of any addition in the actual number of available beds within the limit specified in sub. (1), up to 6 beds, that exists on July 1, 1998.

      (c)    The application to the department governing the permanent and complete closure of a hospital and partial conversion to a nursing home under par. (a) is exempt from the procedural requirements of this chapter.

   (3)   The department may decrease the statewide bed limit specified in sub. (1) to account for nursing home beds that are not set up or not staffed due to life safety code or physical plant requirements under s. 50.04, but that have not been permanently removed from the nursing home’s bed capacity. In addition, the department may decrease the statewide bed limit specified in sub. (1) to account for beds closed under a medical assistance waiver, as specified in 42 U.S. Code § 1396n (c) or under other medical assistance waivers specified in 42 U.S. Code § 1396 to 1396n.

   (4)   The department may decrease the statewide bed limit in facilities primarily serving the developmentally disabled in order to account for any decreased use of beds at the state centers for the developmentally disabled due to the community integration program under s. 46.275.

   (5)   The department may decrease the statewide bed limits specified in sub. (1) to account for any reduction of available beds not included under sub. (3) or (4), in accordance with criteria promulgated by rule.

   (5m)   The department shall decrease the statewide bed limit specified in sub. (1) to account for any reduction in the approved bed capacity of a skilled nursing facility operated by the department of veterans affairs under s. 45.50, as specified in s. 45.50 (10).

   (5r)   The department shall decrease the statewide bed limit specified in sub. (1) by the number of any beds that a nursing home shall agree to reduce in order to convert a separate area of its total area to a residential care apartment complex under s. 50.034 (4).

   (5t)   The department shall decrease the statewide bed limits specified in sub. (1) to account for any reduction in the licensed bed capacity of a nursing home that has relinquished use of a bed, as specified in s. 49.45 (6m) (ap) 4.

   (6)   The department may adjust the statewide bed limits specified in sub. (1) to account for the partial or total conversion of nursing homes to facilities primarily serving the developmentally disabled or of facilities primarily serving the developmentally disabled to nursing homes. The department may promulgate rules limiting the number of nursing home beds converted under this subsection, allocating the beds so converted, and establishing standards for the limitation and allocation.

   (7)   The department may not approve or license any additional nursing home beds if the addition of those beds would exceed the limits established under subs. (1) to (6).

   (8)   The department may allocate or distribute nursing home beds in a manner, developed by rule, that is consistent with the criteria specified in sub. (1) (a) to (f) and s. 150.39.