(1)    Definitions. In this section:

      (a)    “Developmental disability” has the meaning given in s. 51.01 (5) (a).

      (b)    “Intermediate facility” has the meaning given for an intermediate care facility for the mentally retarded under 42 U.S. Code § 1396d (d), other than a center for the developmentally disabled, as defined in s. 51.01 (3).

      (bm)    “Most integrated setting” means a setting that enables an individual to interact with persons without developmental disabilities to the fullest extent possible.

      (c)    “Nursing facility” has the meaning given under 42 U.S. Code § 1396r (a).

   (2)   Placements and admissions to intermediate facilities. Except as provided in sub. (5), no person may protectively place or continue protective placement of an individual with a developmental disability in an intermediate facility and no intermediate facility may admit or continue service for such an individual unless, before the protective placement, continued placement following review under s. 55.18, or admission and after having considered a plan developed under sub. (4), a court under s. 55.12 or 55.18 (1) (ar) finds that protective placement in the intermediate facility is the most integrated setting that is appropriate to the needs of the individual or that the county of residence of the individual would not reasonably be able to provide community-based care in accordance with the plan within the limits of available state and federal funds and county funds required to be appropriated to match state funds, taking into account information presented by all affected parties. An intermediate facility to which an individual who has a developmental disability applies for admission shall, within 5 days after receiving the application, notify the county department that is participating in the program under s. 46.278 of the county of residence of the individual who is seeking admission concerning the application.

   (3)   Placements and admissions to nursing facilities. Except as provided in sub. (5), if the department or an entity determines from a screening under s. 49.45 (6c) (b) that an individual requires active treatment for developmental disability, no individual may be protectively placed in a nursing facility or have protective placement in a nursing facility continued following review under s. 55.18, and no nursing facility may admit or continue service for the individual, unless the department or entity that conducts the screening determines that the individual’s need for care cannot fully be met in an intermediate facility or under a plan under sub. (4) or that the county of residence of the individual would not reasonably be able to provide community-based care in accordance with the plan within the limits of available state and federal funds and county funds required to be appropriated to match state funds.

   (4)   Plan for home or community-based care. Except as provided in a contract specified in sub. (4m), a county department that participates in the program under s. 46.278 shall develop a plan for providing home or community-based care in a noninstitutional community setting to an individual who is a resident of that county, under any of the following circumstances:

      (a)    Within 120 days after any determination made under s. 49.45 (6c) (c) 3. that the level of care required by a resident that is provided by a facility could be provided in an intermediate facility or under a plan under this subsection.

      (b)    Within 120 days after receiving written notice under sub. (2) of an application.

      (c)    Within 120 days after a proposal is made under s. 55.12 (6) to provide protective placement to the individual in an intermediate facility or a nursing facility.

      (d)    Within 120 days after receiving written notice under s. 55.18 (1) (ar) of the protective placement of the individual in a nursing facility or an intermediate facility.

      (e)    Within 90 days after extension of a temporary protective placement order by the court under s. 55.135 (5).

   (4m)   Contract for plan development. The department shall contract with a public or private agency to develop a plan under sub. (4), and the county department is not required to develop such a plan, for an individual, as specified in the contract, to whom all of the following apply:

      (a)    The individual resides in a county with a population of less than 100,000 in which are located at least 2 intermediate facilities that have licenses issued to private nonprofit organizations that are exempt from federal income tax under section 501 (a) of the Internal Revenue Code.

      (b)    Placement for the individual is in, or proposed to be in, an intermediate facility specified under par. (a) that has agreed to reduce its licensed bed capacity to an extent and according to a schedule acceptable to the facility and the department.

   (4n)   Contract for plan payment. The department and the county specified in sub. (4m) (a) shall negotiate a contract under which the department shall provide payment, from the appropriation account under s. 20.435 (4) (b), to implement a plan to provide care in a noninstitutional community setting to an individual who has established residence in the county in order to be admitted to an intermediate facility in the county. The contract may provide for the negotiation of a memorandum of understanding between the parties that identifies the relative functions and duties of the department and the county in implementing plans under sub. (4) for residents of intermediate facilities in the county.

   (5)   Exceptions. Subsections (2) and (3) do not apply to entrance to a facility under s. 49.45 (6c) (e) 1., to an emergency protective placement under s. 55.135, or to a temporary protective placement under s. 55.135 (5) or 55.055 (5).