The department shall review all initial and annual update disclosure reports and shall categorize each children’s institution, based on the type of care provided, into one (1) of the following categories:
(1) Foster homes;
(2) Residential schools;
(3) Children’s camps;
(4) Children’s therapeutic outdoor program; or
(5) Each children’s institution not otherwise categorized in subsections (1) through (4) of this section, except any day school, shall be designated as a “children’s residential care facility.”