(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.

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