This page is for operators, clinical leaders, and investors opening, expanding, relocating, or maintaining a licensed behavioral health or substance use disorder program in Michigan.
Additional Michigan Licensing Guides
- Michigan Drug and Alcohol Inpatient Treatment Licensing
- Michigan Drug and Alcohol Outpatient Treatment Licensing
- Michigan Mental Health Inpatient Licensing
- Michigan Mental Health Outpatient Licensing
- Michigan License Reinstatement
Two Departments, and SUD Rules That Just Changed
This is the part most Michigan guides haven’t caught up to yet, since the SUD rule and licensing-system changes are so recent.
Michigan splits behavioral health licensing across two separate state departments. The Department of Licensing and Regulatory Affairs (LARA), Bureau of Community and Health Systems (BCHS), licenses substance use disorder programs under Part 62 of the Public Health Code. LARA’s BCHS also licenses psychiatric hospitals and psychiatric units, and a separate LARA licensing track covers adult foster care homes, the license Michigan law uses for supervised residential care of adults with mental illness. The Department of Health and Human Services (MDHHS) runs the public community mental health system and the Certificate of Need program that applies to psychiatric beds. So a co-occurring project usually answers to LARA for its licenses and to MDHHS for CON and any public mental health funding, two different departments rather than two divisions of one.
Michigan’s SUD rules also just changed in a way worth knowing about before you build a compliance plan around older guidance. Revised Substance Use Disorder Administrative Rules became effective June 3, 2026 (2026 MR 11). Under them, R 325.1303(6)(d) authorizes three program service categories: methadone, residential, and residential withdrawal management. Outpatient isn’t one of them. On the paperwork side, LARA’s Non-Long Term Care page now sends licenses, changes, and renewals through the Michigan State Licensing System (MI-SLS). Our reading is that an outpatient-only clinic no longer fits any SUD license category, so older advice telling such a clinic to get one looks out of date, but get LARA’s position on that in writing before relying on it.
Primary Regulatory Agencies
Straight from each agency’s own published description of its role.
- Department of Licensing and Regulatory Affairs (LARA), Bureau of Community and Health Systems (BCHS), State Licensing Section, which licenses substance use disorder service programs under Part 62 of the Public Health Code, along with psychiatric hospitals and psychiatric units; LARA also licenses adult foster care homes under the Adult Foster Care Facility Licensing Act
- Department of Health and Human Services (MDHHS), which oversees the public community mental health system and administers Certificate of Need review, including the CON-205 standards for psychiatric beds
- Michigan Certification Board for Addiction Professionals (MCBAP), an IC&RC member organization that certifies substance use disorder counselors
Michigan Behavioral Health Licensing Snapshot
A reference table, not analysis, drawn from the statutes cited in each row.
| Primary SUD Regulator | LARA’s Bureau of Community and Health Systems, State Licensing Section |
| Mental Health Facility Licensing | LARA licenses psychiatric hospitals and units and adult foster care homes; MDHHS runs the public community mental health system and CON |
| Residential Treatment | Its own LARA license category: a staffed residential setting providing SUD treatment or rehabilitation onsite, with a prelicensure survey |
| Outpatient Treatment | No longer a licensed SUD service category since June 3, 2026; methadone programs still need a license |
| Withdrawal Management | A separate license category, residential withdrawal management, offered as either clinically managed or medically monitored, with a prelicensure survey |
| Facility License Required | Yes for methadone, residential, and residential withdrawal management programs, each listed as an authorized category on the LARA SUD program license |
| Certificate of Need | Required for psychiatric hospitals, psychiatric units, and changes in psychiatric bed capacity, administered by MDHHS; Part 62 SUD programs are not on the statute’s list of CON-covered facilities |
| National Accreditation | Not required for a LARA SUD license, but a fully accredited SUD program can ask LARA to waive its routine licensure survey (the accreditors we see Michigan SUD programs hold are CARF, The Joint Commission and COA); CARF or similar accreditation is a requirement, not an exemption, for medical psychiatric beds drawn from the CON-205 special population pool |
| Inspection | LARA must visit each licensed SUD program at least once every three years |
| License Renewal | Annual, with a $500 fee; LARA sends renewal notices in the second quarter and payment is due by July 31 |
| Key Regulations | Part 62 of the Michigan Public Health Code and SUD Administrative Rules R 325.1301 to R 325.1399 (SUD licensure), Mental Health Code MCL 330.1134 to 330.1139 (psychiatric hospital and unit licensure), Adult Foster Care Facility Licensing Act, 1979 PA 218 (AFC homes), CON-205 (psychiatric bed CON standards) |
Which Requirements Apply to Which Michigan Program
Organized this way because no single state document lays it out program by program.
| Program | Agency | Certificate of Need |
|---|---|---|
| Residential SUD treatment | LARA, SUD program license, residential category | No |
| Residential withdrawal management | LARA, SUD program license, residential withdrawal management category | No |
| Outpatient SUD treatment, including IOP | Not a LARA license category since June 3, 2026; confirm your status with LARA in writing | No |
| Opioid treatment programs | LARA, methadone program category | No |
| Residential mental health | LARA, adult foster care license, with specialized program certification for residents with mental illness | No |
| Outpatient mental health | We found no state facility license for a standalone clinic; clinicians practice under their individual LARA professional licenses | No |
| Psychiatric hospital or unit beds | LARA, psychiatric hospital or unit license under the Mental Health Code | Yes, through MDHHS |
One thing the table can’t show: Michigan’s license categories in R 325.1303(6)(d) say “residential” and “residential withdrawal management,” with no ASAM level number attached. A residential operator who wants payers or referral sources to see a level it can prove has a separate option in CARF’s ASAM Level of Care Certification, which ASAM delivers in partnership with CARF and which covers adult residential Levels 3.1, 3.5, and 3.7. Neither CARF’s nor ASAM’s certification page lists a withdrawal management level, so our reading is that it matches Michigan’s residential category, not residential withdrawal management. It won’t appear on the LARA license, but anyone can check it in CARF’s provider search by choosing the “ASAM Level of Care 3.7” certification filter (or 3.1 or 3.5).
Programs Covered
- Residential substance use disorder treatment
- Residential withdrawal management, clinically managed or medically monitored
- Methadone programs
- Outpatient substance use disorder treatment, including intensive outpatient, which no longer carries a LARA SUD license but still has to be planned around the June 2026 change
- Outpatient mental health treatment
- Residential mental health care in licensed adult foster care homes, and psychiatric hospitals and units
Key Licensing Requirements
Taken from LARA’s and MDHHS’s own rule text rather than paraphrased secondhand.
- A Substance Use Disorder Program license application to LARA, filed through MI-SLS, for methadone, residential, or residential withdrawal management services
- A LARA adult foster care license, plus specialized program certification, for a residential mental health home; a LARA psychiatric hospital or unit license for inpatient psychiatric care
- Confirmation of whether a psychiatric hospital or unit project triggers MDHHS’s Certificate of Need review
- Counselors certified as alcohol and drug counselors by an organization the department approves or recognizes, which in our experience means MCBAP’s CADC or CAADC
- Policies written against the rules in effect since June 3, 2026, not the 2023 version
Frequently Asked Questions
How much does it cost to get licensed in Michigan?
LARA’s own licensing fee is $500 initial and $500 annually, a modest part of the total. The real cost sits in facility buildout, staff credentialing, and policy development. Most new outpatient programs budget between $160,000 and $370,000 in total pre-opening investment. Residential programs run considerably higher. Those are our planning ranges, not state-published figures.
How long does Michigan behavioral health licensing take?
Since June 3, 2026, outpatient is no longer a licensed SUD category, and our reading is that an outpatient-only program skips LARA’s SUD licensing, so its timeline is set by staffing, local approvals, and payer contracting. For programs that still need the license, the rules give LARA 3 months to act once an application is complete, and residential, residential withdrawal management, and methadone programs also need an announced prelicensure survey. In our experience a residential SUD program still runs 10 to 16 months from planning to opening, mostly because of staffing and building readiness. A psychiatric hospital or unit project that needs a Certificate of Need from MDHHS should plan for that review on top.
What trips people up most often during Michigan’s licensing process?
Mixing up which department does what. LARA issues the licenses (SUD programs, psychiatric hospitals and units, adult foster care homes), while MDHHS handles Certificate of Need and the public community mental health system. The other common one is working from pre-June 2026 guidance: preparing an outpatient SUD application even though outpatient isn’t among the three program categories in the current rules, or filing through an old portal when LARA’s Non-Long Term Care page now points licenses, changes, and renewals to MI-SLS.
Do you guarantee Michigan licensure?
We can’t promise an outcome that ultimately rests with a state regulator, and we’d be skeptical of anyone who tells you otherwise. What we can commit to is a program built against LARA’s and MDHHS’s actual current requirements, with the right department identified from the start.
How much staff will I need to open a behavioral health program in Michigan?
It depends on service type and census, but a small outpatient program with a clinical director and two to three counselors commonly runs $190,000 to $260,000 a year in clinical payroll before benefits. Michigan’s substance abuse, behavioral disorder, and mental health counselors earn a median of $61,960 a year statewide (BLS OEWS, May 2024), slightly above the roughly $59,350 national figure. Treat that range as a working budget line rather than a worst case, because Michigan’s credential ladder changes who you have to hire. MCBAP certifies the entry-level CADC and the master’s-level CAADC, and counselors can work under a Development Plan while completing their certification requirements, which lets a program bring on staff earlier in their credentialing path at lower wages under a certified clinical director. A common approach staffs the program with CADC and Development Plan counselors under a CAADC clinical director, which holds down payroll and gives newer counselors a route to full certification. The actual staffing matrix and cost estimate, mitigation strategies included, follow once the program model itself is confirmed.
Licensing
Who licenses substance use disorder and mental health programs in Michigan?
LARA’s Bureau of Community and Health Systems licenses SUD programs under Part 62 of the Public Health Code, and it also licenses psychiatric hospitals and psychiatric units under the Mental Health Code. Residential mental health homes are licensed by LARA as adult foster care facilities, with a specialized program certification for residents with mental illness. MDHHS’s part is Certificate of Need review and the public community mental health system, not facility licensing.
Does Michigan require accreditation before I can be licensed?
No, not for a LARA SUD license. Where accreditation pays off is the survey cycle: under MCL 333.6238 a program that is fully accredited by a body LARA accepts can ask LARA to waive the routine visit, and LARA has to grant it if the accreditation report is under three years old and shows no substantial noncompliance. R 325.1309 sets a November 1 deadline for the request, and a denied waiver can’t be appealed. Neither the statute nor the rules name the accepted bodies; R 325.1309 only says LARA maintains a list of approved accrediting bodies. In our experience CARF, The Joint Commission and COA (Council on Accreditation) are the accreditors Michigan SUD programs rely on, and MDHHS’s Substance Use Disorder Services Policy Manual names those same three in Treatment Policy #05, which requires methadone programs in PIHP provider networks to be accredited by one of them. Confirm with LARA that your accreditor is on its list before you file a waiver request. On the hospital side, the CON-205 standards for psychiatric beds require evidence of CARF or comparable accreditation for medical psychiatric beds drawn from the statewide special population pool. That is a condition of getting those beds, not a way around CON.
What changed with the June 2026 SUD rule revision?
Start with the rule text itself. R 325.1303(6)(d), in the version effective June 3, 2026, lists the program service categories a license can authorize, and there are only three: methadone, residential, and residential withdrawal management. Outpatient isn’t on that list. The rules we read don’t spell out what an existing outpatient licensee should do next, so if you run outpatient services under an older license, get LARA’s answer on your status in writing before your next renewal.
Facility
Do I need a physical location before I apply?
Yes, in practice. The SUD license itself lists the program’s physical address, and residential, withdrawal management, and methadone programs have to pass an announced prelicensure survey at the site. Local zoning approval is a separate process, so confirm zoning before you sign a lease.
Does a Certificate of Need apply to my facility?
If it is a psychiatric hospital or psychiatric unit, yes: those are covered health facilities, and opening one, changing its bed count, or starting a child and adolescent psychiatric program needs a CON from MDHHS. SUD programs licensed under Part 62 aren’t on the statute’s list of covered facilities, so a freestanding residential SUD program doesn’t go through CON. That last point is our reading of MCL 333.22205.
Does opening a second location require a new license?
Plan on it. Because the license names a single physical address, we treat each additional site as needing its own LARA licensing action, but confirm how LARA wants a second site filed in MI-SLS before you commit to a timeline.
Staffing
What credentials do addiction counselors need in Michigan?
The Michigan Certification Board for Addiction Professionals certifies the Certified Alcohol and Drug Counselor (CADC) and the Certified Advanced Alcohol and Drug Counselor (CAADC). Every CADC candidate needs 300 education hours no matter their degree; what shrinks with more schooling is the counseling experience, from 6,000 hours with a high school diploma or GED to 5,000 with an associate’s, 4,000 with a bachelor’s, and 2,000 with a master’s. The CAADC is for master’s-level clinicians in an approved discipline and calls for 186 education hours and 2,000 hours of counseling people with SUD. Both require passing the IC&RC exam for the credential.
Can someone work while completing their certification?
Yes. MCBAP allows counselors to work under a Development Plan while completing certification requirements, with their title carrying a “-DP” designation until the full credential is awarded.
Do mental health programs use a different credentialing process than SUD programs?
Yes. Mental health clinicians such as professional counselors and master’s social workers hold individual licenses through LARA’s Bureau of Professional Licensing, which is a separate process from MCBAP’s addiction-specific certification.
Operations
How does medication for opioid use disorder fit into a Michigan program?
Section 1262 of the Consolidated Appropriations Act, 2023 ended the federal waiver for prescribing buprenorphine for opioid use disorder, and DEA now says those prescriptions only need a standard DEA registration number. Methadone is different: it requires a LARA-licensed methadone program, which remains one of the three authorized service categories on the SUD license. A mobile unit isn’t a category of its own; R 325.1301(1)(x) defines it as a state-approved unit assigned to a state-licensed methadone program location.
Where are applications and renewals filed now?
In the Michigan State Licensing System (MI-SLS). LARA’s Non-Long Term Care page links to MI-SLS for licenses, changes, and renewals, and says renewal instructions, requirements, and fees are completed inside that system. For questions, LARA lists its Non-Long Term Care State Licensing Section at LARA-BCHS-NLTCSLS@michigan.gov and 1-833-757-7308.
Does a hospital-based psychiatric program ever need accreditation?
For one kind of bed, yes. The CON-205 standards, effective January 29, 2026, require an applicant for medical psychiatric beds from the statewide special population pool to show CARF or other nationally recognized accreditation of its medical psychiatric program, or to obtain it within 24 months of accepting its first patient. It is a condition MDHHS attaches to those beds, not an exemption from Certificate of Need.
Enforcement
What happens if LARA finds deficiencies at a survey?
You won’t find a plan-of-correction procedure in the SUD rules, so treat every cited problem as something to fix and document right away. If problems persist, LARA can deny or revoke a license for violating the Public Health Code, the Mental Health Code, or the rules (R 325.1315), and it can summarily suspend a license if a violation threatens recipients’ health, safety, or welfare and the program has failed to fix it (R 325.1317). Surveys after the prelicensure visit, and complaint investigations, are unannounced.
Can I appeal a licensing decision?
It depends on the decision. An existing licensee facing revocation or nonrenewal gets a notice of intent and a 30-day window to appeal in writing. A timely appeal leads to a compliance conference no sooner than 45 days after the notice, and anything still unsettled after that conference goes to a formal hearing under the Administrative Procedures Act (R 325.1323). A denied initial application is a different story: R 325.1321 says that denial is not subject to appeal. A denied survey waiver can’t be appealed either, and someone tied to a revoked license can be refused a new one for at least 3 years without appeal (R 325.1319).
What if my facility is still citing pre-2026 SUD rules?
Given how recent the June 2026 rule revision is, confirm directly with LARA’s State Licensing Section whether your existing policies and procedures need updating to match the current rule text.
What’s Included and What Isn’t
What we help with in Michigan
We help behavioral health and SUD operators confirm which department, LARA or MDHHS, actually governs a given program, sequence Certificate of Need against facility licensing for psychiatric hospital projects, and keep policies current against the June 2026 SUD rule revision.
What falls outside that scope
We don’t handle CMS, Medicare, or Medicaid enrollment and billing matters, and marketing isn’t something we provide directly either. Our focus is licensing, certification, and accreditation, not payer credentialing. If you need marketing help, we’re happy to point you toward people who specialize in it.
Author: A. Ant, CADC-II, Licensing & Accreditation Expert
Disclaimer: This content is provided for general informational purposes only and should not be construed as legal, regulatory, or licensing advice. Requirements change frequently. Consult qualified professionals for guidance specific to your situation.
Sorting out LARA versus MDHHS for a Michigan program? Let’s talk it through.
Sources
- LARA, Substance Use Disorder Administrative Rules, R 325.1301 to R 325.1399 (2026 MR 11, eff. June 3, 2026): SUD Administrative Rules (PDF) (checked October 8, 2026)
- LARA BCHS, Non-Long Term Care State Licensing (psychiatric hospitals and units, MCL 330.1139 fee, MI-SLS applications and renewals, section contacts): Non-Long Term Care (checked October 8, 2026)
- Michigan Public Health Code, Part 62, MCL 333.6230 to 333.6251 (fee, survey cycle, accreditation waiver, enforcement): Part 62 Substance Use Disorder Services (PDF) (checked October 8, 2026)
- Michigan Public Health Code, Part 222, MCL 333.22203, 333.22205, 333.22209 (Certificate of Need): Part 222 Certificate of Need (PDF) (checked October 8, 2026)
- Mental Health Code, MCL 330.1134: Licensing of psychiatric hospitals and units (PDF) (checked October 8, 2026)
- Mental Health Code, MCL 330.1137: License term and provisional license (PDF) (checked October 8, 2026)
- MDHHS, CON Review Standards for Psychiatric Beds and Services (CON-205), effective January 29, 2026: CON-205 Standards (PDF) (checked October 8, 2026)
- Adult Foster Care Facility Licensing Act, 1979 PA 218, MCL 400.701 et seq.: Act 218 of 1979 (PDF) (checked October 8, 2026)
- Mental Health Code, Chapter 1, MCL 330.1100a (“department” means MDHHS) and MCL 330.1116 (department maintains the system of community mental health services programs): Mental Health Code Chapter 1 (PDF) (checked October 8, 2026)
- LARA Bureau of Professional Licensing: Professional Counselor Licensing Guide (PDF) and Limited Master’s Social Work Licensing Guide (PDF) (checked October 8, 2026)
- MCBAP, credential requirements (CADC, CAADC, Development Plan): Credential Requirements (PDF), MCBAP Certifications and MCBAP home page (IC&RC membership) (checked October 8, 2026)
- SAMHSA, Waiver Elimination (MAT Act): MAT Act (checked October 8, 2026)
- DEA Diversion Control Division, Dear Registrant letter on the end of the DATA-Waiver: DEA letter (PDF) (checked October 8, 2026)
- CARF, ASAM Level of Care Certification: Level of Care Certification (checked October 8, 2026)
- ASAM, Level of Care Certification: ASAM Level of Care Certification (checked October 8, 2026)
- CARF provider search: Find a Provider (checked October 8, 2026)
- MDHHS, Substance Use Disorder Services Policy Manual, Treatment Policy #05 (methadone OTP accreditation by CARF, COA or The Joint Commission): SUD Services Policy Manual (PDF) (checked October 8, 2026)