(a) The initial license, issued by the Department to an applicant when the hospital includes a distinct part which will function as a skilled nursing or intermediate care service, shall include a separate provisional authorization for the distinct part. The provisional authorization for the distinct part service shall terminate six months from the date of issuance. The Department shall give the distinct part, and supporting elements of the hospital, a full and complete inspection within 30 days prior to termination of the provisional authorization. A regular authorization will be included in the license if the hospital and distinct part meet all applicable requirements for licensure. If the hospital does not meet the requirements for licensure but has made substantial progress toward meeting such requirements, as determined by the Department, the initial provisional license shall be renewed for six months. If the Department determines that there has not been substantial progress toward meeting licensure requirements at the time of the first full inspection provided by this section, or if the Department determines upon its inspection made within 30 days of the termination of a renewed provisional license that there is lack of full compliance with such requirements, no further license shall be issued.

(b) An applicant who has been denied provisional licensing may contest such denial by filing a statement of issues, as provided in Section 11504 of the Government Code: The proceedings to review such denial shall be conducted pursuant to the provisions of Chapter 5 (commencing with Section 11500), Part 1, Division 3, Title 2, of the Government Code.