Section 25C1/2. (a) Notwithstanding the provisions of section twenty-five C, no determination of need shall be required for any substantial capital expenditure for construction related to the provision of inpatient services or for any substantial change in inpatient services if, upon application pursuant to subsection (b), the department finds that such substantial capital expenditure or such substantial change in services will be made by or on behalf of one of the following:—

(1) An HMO or combination of HMOs if (A) the HMO or combination of HMOs has in the service area of the HMO or the service areas of the HMOs in combination an enrollment of at least fifty thousand individuals, (B) the facility in which the services will be provided is or will be geographically located so that the services will be reasonably accessible to such enrolled individuals; and (C) at least seventy-five per cent of the patients who can reasonably be expected to receive such inpatient services will be individuals enrolled with such HMO or HMOs in the combination;

(2) A health facility if (A) the facility primarily provides or will provide inpatient services, (B) the facility is or will be controlled, directly or indirectly, by an HMO or a combination of HMOs which has in the service area of the HMO or service areas of the HMOs in the combination an enrollment of at least fifty thousand individuals, (C) the facility is or will be geographically located so that the services will be reasonably accessible to such enrolled individuals, and (D) at least seventy-five per cent of the patients who can reasonably be expected to receive such inpatient services will be individuals enrolled with such HMO or HMOs in the combination; or

(3) A health care facility or portion thereof if (A) the facility is or will be leased by an HMO or combination of HMOs which has in the service area of the HMO or the service areas of the HMOs in the combination an enrollment of at least fifty thousand individuals and on the date the application is submitted under subsection (b) at least fifteen years remain in the term of the lease, (B) the facility is or will be geographically located so that the services will be reasonably accessible to such enrolled individuals, and (C) at least seventy-five percent of the patients who can reasonably be expected to receive such inpatient services will be individuals enrolled with such HMO or HMOs in the combination.

(4) A health care facility if (a) the facility is or is going to be a long-term care facility, an infirmary maintained in a town, a convalescent or nursing home, a rest or charitable home for the aged as defined in section seventy-one, (b) the facility is, or will be located in an underbedded urban area as determined by criteria developed by the department in consultation with the Massachusetts federation of nursing homes and other interested parties, including the department of elder affairs, (c) the facility provides service, or will agree to provide service, to at least seventy per cent of its patients as enrollees in Title XIV of the Federal Social Security Act, (d) the facility presents an adequate quality assurance program plan meeting criteria established by the department subsequent to consultation with the Massachusetts federation of nursing homes and other interested parties, and (e) need for such facility has been established pursuant to an administrative review procedure shall be established by the department within ninety days of the effective date of this act.

(b) Any HMO or health care facility seeking an exemption under subsection (a) shall submit to the department an application for such exemption in such form and manner as the department shall prescribe. The application shall contain such information as the department may require to determine if the requirements of subsection (a) are met and may be subject to such public review and comment as the department deems appropriate. In the case of a proposed health care facility or portion thereof which has not begun to provide services on the date an application is submitted under this paragraph with respect to such facility or portion, the facility or portion shall meet the applicable requirements of subsection (a) when the facility first provides such services. The department shall approve an application submitted under this subsection if it determines that the applicable requirements of subsection (a) are met. Any exemption granted under subsection (a) shall be a valid authorization for use only by the applicant of the health care facility or portion or medical equipment with respect to which the exemption is granted.

(c) In the case of a health care facility which is controlled directly or indirectly by an HMO or combination of HMOs, no determination of need under section twenty-five C shall be required for a substantial capital expenditure solely related to the provision of outpatient services or for a substantial change in outpatient services; provided, however, that no such facility shall acquire a unit of medical, diagnostic, or therapeutic equipment with a fair market value in excess of one hundred and fifty thousand dollars which is intended to serve outpatients unless such facility notifies the department of the facility's intent to acquire such equipment and of the use that will be made of the equipment. Such notice shall be made in writing and shall be received by the department at least thirty days before contractual arrangements are entered into to acquire the equipment with respect to which notice is given. A determination by the department of need therefor shall be required for any such acquisition (i) if the notice required by this subsection is not filed in accordance with the requirements of this subsection, and (ii) if the requirements for exemption under subsection (a) are not met.