Minnesota Behavioral Health & Substance Use Licensing Guide

Licensing agency

Department of Human Services (DHS)Office of Inspector General licensing; DCYF took child care, not behavioral health

Substance use license

Chapter 245G licenseOutpatient or residential, plus add-ons such as opioid treatment

Fees

$2,100 application feeAnnual 245G fee from $2,600, set by licensed capacity

Before you apply

60-day written notice to the countyRequired for every new 245G program

Coming in 2028

New licenses for ARMHS, CTSS, mobile crisis and CCBHCsDHS starts issuing them July 1, 2027; required from January 1, 2028

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

Who licenses behavioral health programs in Minnesota?

The Department of Human Services. DHS licenses substance use disorder (SUD) treatment programs under chapter 245G, and one DHS unit handles mental health, SUD and children's residential facility licensing.¹ The license application is issued by the DHS Office of Inspector General.² Mental health clinics are certified, not licensed, under section 245I.20, while intensive residential treatment services (IRTS) and residential crisis stabilization need a license under section 245I.23.¹²

Recent reorganizations did not move behavioral health licensing. The new Department of Children, Youth, and Families (DCYF) licenses child care, child foster care and adoption programs under chapter 142B.^{18, 19} SUD and mental health applications still go to DHS licensing staff.^{1, 2} Direct Care and Treatment is now a separate agency, run by an executive board, that operates state services such as regional treatment centers and secure treatment facilities.²⁰

Minnesota license types

A chapter 245G license is either outpatient (nonresidential) or residential. Every program meets sections 245G.01 to 245G.17, and each added service brings its own section:¹

• Adolescent treatment (245G.18)
• Treatment for clients with children (245G.19)
• Co-occurring mental health and SUD treatment (245G.20)
• Residential treatment (245G.21)
• Opioid treatment program (245G.22)¹

Residential programs for clients under 16 must be licensed as children's residential facilities under Minnesota Rules chapter 2960; programs for 16- and 17-year-olds may use chapter 245G or chapter 2960.¹ Withdrawal management programs are licensed under chapter 245F as clinically managed or medically monitored.²

On the mental health side, the same application form covers mental health clinics, IRTS and residential crisis stabilization, and residential mental health programs.² Providers certified under chapter 256B, including adult rehabilitative mental health services (ARMHS), mobile crisis teams, children's therapeutic services and supports (CTSS) and assertive community treatment, must meet the chapter 245I standards.¹² If you plan to bill the Behavioral Health Fund for enhanced-rate services, such as culturally specific, co-occurring or medical services, mark them on the application; DHS requires extra documents before licensure.²

Law and rules

Chapter 245A is the general licensing act, chapter 245C covers background studies and chapter 245G sets the SUD treatment standards. A 245G applicant must also meet the maltreatment reporting laws in chapter 260E and section 626.557, and Minnesota Rules chapter 9544.^{1, 3} Withdrawal management falls under chapter 245F and mental health services under chapter 245I.^{2, 12} Chapter 254B governs the Behavioral Health Fund, which pays for SUD treatment from eligible vendors.^{1, 8} DHS may grant variances from 245G requirements that do not affect client health or safety.³

How to apply for a 245G license

1. Notify the countyAt least 60 days before you apply, tell the county human services director in writing that you intend to open a program, with a description of the program and the population it will serve. The county then has 60 days to send DHS a statement supporting or opposing the program, which DHS weighs when it decides whether the program is needed.⁴ Proof of the notice goes in with the application.³
2. Set up the businessRegister with the Secretary of State and list every controlling individual. The first one you list is the authorized agent, who receives all DHS notices.² Background studies follow chapter 245C.¹
3. Write policies and name key staffPrepare indexed policies, procedures and forms, and document the qualifications of the treatment director, the alcohol and drug counselor supervisor and, where required, a registered nurse or an OTP medical director.²
4. Submit the applicationMail the notarized DHS-7118 application with the $2,100 fee, a workers' compensation certificate, an organizational chart and proof of ownership, then email the policies and other documents to DHS. The authorized agent must also state whether an outside consultant helped prepare the application.² DHS offers an optional application information session.¹
5. Enroll for paymentTo bill public funds, enroll in the SUD demonstration through Medical Assistance and keep a Behavioral Health Fund provider agreement (see Other approvals).^{14, 8}

Changes and ownership: tell DHS before you change location, residential capacity or the 245G.18 to 245G.22 services you offer; DHS decides whether a new license is needed. A change of ownership requires a new license application.³ Since October 1, 2026, the exception that let a sale or a change of all controlling individuals skip a new application, when one controlling individual had been with the license for the past 12 months, no longer applies, and the $2,100 fee tied to that exception is repealed.⁶ For mental health clinic certification, DHS acts within 90 working days of a complete application.¹³

Licensing fees

The application fee stands in for the annual fee that expires December 31, and DHS does not process an application until it is paid. Each license covers a specific location.⁵ The 2028 amounts come from Laws 2026, chapter 121, article 7, which takes effect January 1, 2028.⁶

How accreditation counts in Minnesota

Licensing: we found no deemed-status rule for 245G or 245I programs. Instead, the licensing act lets DHS treat compliance with an accreditation body's standards as partial compliance with licensing standards and use abbreviated inspections built on key standards. DHS still investigates complaints against accredited programs and can still take licensing action.⁷

Fee breaks: chapter 254B lets DHS cut licensing fees by up to 50% when it uses accreditation or abbreviated inspections in licensing a program.⁸ Ask DHS whether either method applies to your license type today.

Medical Assistance: SUD payment depends on the DHS license and on enrollment in the SUD demonstration, which uses ASAM-based standards rather than accreditation.¹⁴ Certified community behavioral health clinics must meet the federal CCBHC criteria, and from 2028 DHS will license them and attest their compliance to CMS.⁶ Recovery community organizations that bill for peer recovery support must be certified by the Minnesota Alliance of Recovery Community Organizations or another organization DHS names.⁸

Opioid treatment: state law and federal rules require accreditation.^{9, 10} SAMHSA's approved bodies are CARF International, Social Current (formerly COA), The Joint Commission, the National Commission on Correctional Health Care and the Washington State Department of Health.¹¹

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

Opioid treatment programs

• Approvals: an OTP holds a 245G license with the 245G.22 add-on, DEA registration as a narcotic treatment program, accreditation, federal certification, and a Board of Pharmacy license or compliance with the practitioner dispensing rules.⁹
• Application extras: proof of certification and accreditation, the medical director's qualifications, a treatment services description, prescription monitoring program policies, diversion control policies and a quality improvement plan.²
• County notice: the 60-day notice applies to every new 245G license, OTPs included.⁴
• Operations: at least eight random drug tests per client per 12 months; one full-time counselor (32 hours or more a week) for every 60 clients; capacity notices to DHS within seven days of reaching 90% and 100%, plus weekly capacity and waiting-list reports; and participation in the central registry.⁹
• Federal steps: SAMHSA grants provisional certification for up to one year while you earn accreditation, and only after state and DEA approval.¹⁰

Other approvals you may need

• Medical Assistance and the SUD demonstration: licensed programs paid by Medical Assistance must enroll as demonstration providers. Residential and withdrawal management programs had until January 1, 2024, and nonresidential programs until January 1, 2025; programs that do not enroll cannot be paid. Residential providers must follow DHS standards, keep referral arrangements for step-up and step-down care, and offer or arrange medications for opioid use disorder.¹⁴
• Behavioral Health Fund vendors: keep a DHS provider agreement, take part in the Drug Alcohol Normative Evaluation System, file an annual financial statement, report capacity, and carry $2,000,000 per occurrence in liability coverage plus $10,000 employee dishonesty coverage if you handle client money.⁸
• Recovery residences: sections 254B.21 to 254B.216 set minimum standards for every recovery residence and create voluntary DHS certification at two levels: level one for peer-run homes and level two for managed homes. Certification requires policies, resident forms, insurance, background checks and an on-site inspection, and lasts three years.¹⁵ A 2026 law moved these sections, and the title protection for the phrase recovery residence, to July 1, 2026.⁶ The old sober home statute, section 254B.181, is repealed effective January 1, 2027.¹⁷
• Room and board payments: no new Behavioral Health Fund room and board vendors were approved after June 30, 2025.¹⁶ Existing vendors can be paid through December 31, 2026, and not for services on or after January 1, 2027.⁶

Recent changes

• Laws 2025, First Special Session chapter 9 (signed June 14, 2025): redesigned 245G treatment services around psychosocial treatment and treatment coordination, and created the recovery residence framework.¹⁵ The service changes take effect July 1, 2026, or on federal approval, whichever is later.²¹
• July 1, 2025: new Behavioral Health Fund room and board vendors stopped.¹⁶
• Laws 2026, chapter 95 (signed May 14, 2026): from January 1, 2027, 245G programs must give clients approved tobacco and nicotine education material on the first day of service. Peer recovery support is capped at 14 hours a week per client from one provider.²²
• Laws 2026, chapter 121 (signed May 27, 2026): moved the recovery residence sections to July 1, 2026, ended room and board payments after 2026 and tightened change-of-ownership rules from October 1, 2026.⁶
• Uniform service standards: DHS begins issuing licenses on July 1, 2027. From January 1, 2028, ARMHS, CTSS and children's day treatment, mobile crisis and CCBHC providers need a license instead of a certification. Applicants must hold their current certification for at least 90 days before applying, and providers that do not apply within six months of the application opening lose Medical Assistance reimbursement for those services.⁶

Confirm these with DHS

• Whether federal approval has arrived for the 2025 SUD service changes, and the date they apply to your program.
• Whether DHS accepts accreditation as partial compliance, or reduces fees, for your license type.
• When DHS recovery residence certification opens, its forms and any fees; the statute pages still show a 2027 start.
• The phase-in schedule and application dates for the 2028 ARMHS, CTSS, mobile crisis and CCBHC licenses.
• Current review times for new 245G applications, which the statutes do not set.
• For OTPs: the state opioid treatment authority contact and any local zoning limits on your site.

Sources

1. Minnesota DHS, Substance use disorder treatment licensing. mn.gov
2. Minnesota DHS Office of Inspector General, License application DHS-7118 (October 2026). edocs.dhs.state.mn.us
3. Minnesota Statutes, section 245G.03, Licensing requirements. revisor.mn.gov
4. Minnesota Statutes, section 254B.03, County notice for new treatment programs. revisor.mn.gov
5. Minnesota Statutes, section 245A.10, Licensing fees. revisor.mn.gov
6. Laws of Minnesota 2026, chapter 121 (S.F. 4476). revisor.mn.gov
7. Minnesota Statutes, section 245A.09, Regulatory methods. revisor.mn.gov
8. Minnesota Statutes, section 254B.0501, Eligible vendors. revisor.mn.gov
9. Minnesota Statutes, section 245G.22, Opioid treatment programs. revisor.mn.gov
10. SAMHSA, Become an opioid treatment program. samhsa.gov
11. SAMHSA, Approved accreditation bodies. samhsa.gov
12. Minnesota Statutes, section 245I.011, Applicability of mental health standards. revisor.mn.gov
13. Minnesota Statutes, section 245I.20, Mental health clinic certification. revisor.mn.gov
14. Minnesota Statutes, section 256B.0759, SUD demonstration project. revisor.mn.gov
15. Laws of Minnesota 2025, First Special Session chapter 9 (H.F. 3), article 4. revisor.mn.gov
16. Minnesota Statutes, section 254B.0503, Room and board provider requirements. revisor.mn.gov
17. Minnesota Statutes, section 254B.181, Sober homes. revisor.mn.gov
18. Minnesota Statutes, section 142B.01, Definitions (children, youth, and families licensing). revisor.mn.gov
19. Minnesota Statutes, section 142B.05, Who must be licensed. revisor.mn.gov
20. Minnesota Statutes, section 246C.02, Direct Care and Treatment. revisor.mn.gov
21. Minnesota Statutes, section 245G.07, Treatment services. revisor.mn.gov
22. Laws of Minnesota 2026, chapter 95 (S.F. 476), article 5. revisor.mn.gov

This guide summarizes Minnesota statutes, session laws and DHS pages as of the date above. It is general information, not legal advice. Requirements change; confirm with DHS before you apply.