Commencing in 1974, the state department shall, on or before February 1 of each year, notify all public agencies which refer patients to long-term health care facilities of all of the long-term health care facilities in the area found upon inspection within the previous 12-month period to be without class “A” or “B” violations. Public agencies shall give priority to such long-term health care facilities in referring publicly assisted patients. No public agency shall refer patients to long-term health care facilities with any uncorrected class “A” violations or five or more uncorrected class “B” violations, except those long-term health care facilities which the director may exempt because of a lack of facilities of the same type in the area sufficient to satisfy the demand for services provided by such type of facilities.