Michigan Behavioral Health & Substance Use Licensing Guide

Licensing agency

LARA, Bureau of Community and Health SystemsNon-Long-Term-Care State Licensing Section

SUD license categories

Methadone, residential and residential withdrawal managementR 325.1301 to 325.1399, amended June 3, 2026

Applications

MI-SLS online licensing systemDecision within 3 months of a complete application

Annual fee

$500 per SUD program licensePsychiatric hospitals and units: $500 plus $10 per bed

Accreditation

Required for Medicaid SUD providers in PIHP networksNo LARA survey waiver for SUD programs today

Licensing or accrediting a program here? Book a free consultation or call 561-396-0813.

Who licenses behavioral health programs in Michigan?

LARA issues the license. The Bureau of Community and Health Systems (BCHS) at the Department of Licensing and Regulatory Affairs licenses substance use disorder (SUD) services programs and psychiatric hospitals and units. SUD programs are held to Article 6 of the Public Health Code, Chapter 2A of the Mental Health Code and LARA's SUD rules.¹

MDHHS controls the funding. Medicaid covers specialty mental health and SUD services when they are delivered under a Prepaid Inpatient Health Plan (PIHP). Each PIHP must be certified by the Department of Health and Human Services as a community mental health services program, and providers contract with the PIHP or an affiliate.² MDHHS also acts as the State Opioid Treatment Authority (SOTA).³

SUD license categories

Since amended rules took effect on June 3, 2026, a LARA SUD license covers one or more of three service categories:⁴

• Methadone program: opioid treatment using methadone.
• Residential program: a staffed residential setting with treatment on site.
• Residential withdrawal management: clinically managed or medically monitored withdrawal management.⁴

Outpatient counseling is no longer a license category. LARA called it a duplicative license for a low-risk service, noting that counselors stay overseen through professional licensing, MCBAP certification and local community mental health authorities.⁵

Outside the license: programs in government-operated facilities, and licensed professionals working within their own scope rather than through an SUD group, if they do not provide methadone. Housing-only recovery residences fit no category.⁴ Psychiatric hospitals and units are licensed separately under the Mental Health Code.^{1, 6}

Law and rules

Part 62 of the Public Health Code bars running an SUD services program without a license (MCL 333.6233) and covers applications, public comment, fees and license terms in MCL 333.6235 to 333.6238.^{7, 8, 9, 10, 11} The program rules are Mich. Admin. Code R 325.1301 to 325.1399.⁴

Psychiatric hospital licensing rests on MCL 330.1134, with rules at R 330.1201 to 330.1299.^{6, 12} LARA plans to rescind those rules and replace them with a new rule set (2025-33 LR).¹³

How to apply for an SUD program license

1. Pick your categoriesMethadone and withdrawal management programs need a physician medical director board certified in addiction medicine or psychiatry, or who completes 30 hours of approved training within a year of hire.⁴
2. Notify the communityShow that you notified churches, schools and incorporated nonprofit civic groups in your service area. LARA must let local residents comment before it licenses you.^{8, 9}
3. Apply in MI-SLSSubmit the application and fees in the Michigan State Licensing System. LARA flags gaps within 30 days, and a file is complete only once the form, attachments and fee are in.^{1, 4}
4. Prelicensure surveyAll three categories get an announced on-site survey and a decision within 3 months of a complete application, then a post-licensure survey within 3 months.⁴
5. Renew every yearA license lasts up to one year. Renewals are paid in MI-SLS by July 31, and unrenewed licenses close September 1. A site that has not offered the service in 12 months cannot renew.^{11, 1, 4}

Changes and inspections: licenses do not transfer, and a change of ownership, location, name, service category or mobile unit needs a change application.^{1, 4} LARA may issue provisional licenses and 90-day temporary permits, and visits each program at least every three years, unannounced after the first survey.^{11, 4}

Licensing fees

Both statutes set these amounts until October 1, 2027. Psychiatric fees are not refunded after a denial or revocation.^{10, 14}

How accreditation counts in Michigan

Licensing: the statute lets an accredited SUD program ask LARA to waive its routine visit, and the rules tell LARA to keep a list of approved accreditors.^{11, 4} But LARA says the waiver does not apply to SUD programs because it has approved no accrediting body, and it does not apply to psychiatric hospitals or units.¹ The SUD fee is a flat $500 with no accreditation discount.¹⁰

Medicaid and PIHP networks: this is where accreditation matters. Medicaid SUD providers must be licensed for each service they contract for and accredited as an alcohol or drug program by The Joint Commission, CARF, the American Osteopathic Association, COA, NCQA or AAAHC.²

Opioid treatment: Medicaid expects the OTP medication component to be accredited by The Joint Commission or CARF.² SAMHSA's approved OTP accreditors include CARF, The Joint Commission and Social Current (formerly COA).¹⁵

Recovery housing grants require MARR, CARF or NARR-affiliate certification, or certification before the grant term ends.¹⁷

Getting accredited? See our CARF accreditation consultants and Joint Commission consultants, available nationwide.

Opioid treatment programs

• State license: LARA licenses OTPs as methadone programs. The rules require compliance with 42 CFR Part 8, a medical director, counselors carrying no more than 65 recipients each, and a prescriber or nurse on site whenever medication is given.⁴
• Mobile units: up to three per licensed methadone program, each returning to the licensed site nightly.⁴
• Four approvals: MDHHS requires every OTP to be licensed by LARA, registered with DEA, accredited by a SAMHSA-approved body and certified by SAMHSA after SOTA approval.³
• Take-homes: MDHHS Treatment Policy 04 applies the 2024 federal take-home rules. Exceptions go on Form SMA-168 in the SAMHSA OTP Extranet for SOTA and SAMHSA review.³
• Federal steps: SAMHSA grants one-year provisional certification only after state approval and DEA registration, and the program must be accredited within that year.¹⁶

Other approvals you may need

• PIHP contract: to bill Medicaid for specialty services, contract with your regional PIHP or its affiliate.² MDHHS has posted executed fiscal year 2027 contracts for all ten existing PIHP regions.¹⁸
• MDHHS program approval: some programs, such as crisis residential services, need MDHHS approval before they count as a Medicaid cost.²
• Certificate of Need: psychiatric hospitals and units may need MDHHS CON approval, LARA plan review and fire safety review. SUD programs are exempt from all three.¹
• Recovery residences: MSHDA's Recovery Housing Investment Program funds only MARR Level 1 to 3 homes, and homes bought with the grant must stay certified for 10 years.¹⁷

Recent changes

• February 1, 2025: MDHHS's revised OTP take-home policy took effect.³
• PIHP rebid: MDHHS issued a competitive PIHP request for proposals in August 2025, open to nonprofits only.¹⁹ MDHHS now describes it as a proposal that would have cut the regions from ten to three, and the existing ten PIHPs hold FY2027 contracts.^{20, 18}
• SB 398: would stop LARA from capping mobile units or requiring a year of documented opioid use disorder before methadone treatment. It passed the Senate 37-0 on September 4, 2025 and is in the House.²¹
• June 3, 2026: amended SUD rules dropped the outpatient counseling category and the one-year opioid use disorder history requirement for methadone admission.^{4, 5}
• Psychiatric hospital rules: a replacement rule set is in progress.¹³
• October 12, 2026: MDHHS awarded $3.4 million in opioid settlement funds for 24 new recovery residences.²²

Confirm these with LARA and MDHHS

• Whether an outpatient-only program needs any LARA license now. The Medicaid Provider Manual still refers to outpatient SUD licensure, so ask your PIHP what it accepts.
• Any MI-SLS processing or change fees, and fees after October 1, 2027.
• Whether LARA will name approved accreditors for SUD survey waivers.
• The status of SB 398 and the new psychiatric hospital rules.
• Your PIHP's credentialing and contracting requirements, and any next step in the PIHP procurement.

Sources

1. Michigan LARA, State licensing of hospitals, psychiatric hospitals/units and SUD programs. michigan.gov
2. Michigan DHHS, Medicaid Provider Manual, behavioral health chapter (October 1, 2026). mdch.state.mi.us
3. Michigan DHHS, Treatment Policy 04, OTP off-site dosing (effective February 1, 2025). michigan.gov
4. Michigan Administrative Code, R 325.1301 to 325.1399, Substance Use Disorders Service Program. ars.apps.lara.state.mi.us
5. Michigan LARA, Regulatory impact statement, rule set 2025-31 LR. michigan.gov
6. Michigan Legislature, MCL 330.1134. legislature.mi.gov
7. Michigan Legislature, MCL 333.6233. legislature.mi.gov
8. Michigan Legislature, MCL 333.6235. legislature.mi.gov
9. Michigan Legislature, MCL 333.6236. legislature.mi.gov
10. Michigan Legislature, MCL 333.6237. legislature.mi.gov
11. Michigan Legislature, MCL 333.6238. legislature.mi.gov
12. Michigan Administrative Code, R 330.1201 to 330.1299, Licensing of facilities. ars.apps.lara.state.mi.us
13. Michigan LARA, BCHS currently open administrative rules. michigan.gov
14. Michigan Legislature, MCL 330.1139. legislature.mi.gov
15. SAMHSA, Approved accreditation bodies for opioid treatment programs. samhsa.gov
16. SAMHSA, Become an opioid treatment program. samhsa.gov
17. MSHDA, Recovery Housing Investment Program policy manual, FY 2026-2027. michigan.gov
18. Michigan DHHS, FY2027 PIHP executed contracts. michigan.gov
19. Michigan DHHS, MDHHS seeking proposals for PIHPs (August 5, 2025). michigan.gov
20. Michigan DHHS, Restructuring the behavioral health system. michigan.gov
21. Michigan Legislature, Senate Bill 398 of 2025. legislature.mi.gov
22. Michigan DHHS, MDHHS invests $3.4 million to expand recovery residences (October 12, 2026). michigan.gov

This guide summarizes Michigan statutes, rules and LARA and MDHHS pages as of the date above. It is general information, not legal advice. Requirements change; confirm with LARA and MDHHS before you apply.