Michigan Mental Health Outpatient Licensing

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.

We have not found any Michigan statute or rule that creates a facility license for an outpatient mental health clinic. LARA’s Bureau of Community and Health Systems licenses psychiatric hospitals and psychiatric units, plus a short list of substance use disorder program types, and its list of licensed facilities has no outpatient mental health category. For an office-based practice, the regulation that actually applies is the license each clinician holds. The public mental health system sits beside that, run through Community Mental Health Services Programs that MDHHS certifies.

No Standalone Facility License for Outpatient Mental Health

The licensing section of Michigan’s Mental Health Code, MCL 330.1134, directs the state to build a licensing system “for psychiatric hospitals and psychiatric units” and goes no further than that. LARA’s current SUD rules, revised June 3, 2026, license methadone, residential, and residential withdrawal management programs. A practice offering counseling and therapy in an office, with no beds and no methadone, doesn’t fit either scheme. Our reading is that the practice runs on its clinicians’ individual licenses and holds no organizational license of its own. That is our interpretation of what the statutes cover, not a written position from LARA, so check it with LARA’s Non-Long Term Care State Licensing Section (1-833-757-7308, LARA-BCHS-NLTCSLS@michigan.gov) before you open, and ask again before adding beds or a more intensive level of care.

The Public Mental Health System Runs Through CMH, Separately

It helps to know this distinction exists even if a given practice never touches it directly. The Mental Health Code defines a Community Mental Health Services Program (CMHSP) as a county community mental health agency, authority, or organization. MDHHS writes the certification standards CMHSPs must meet (MCL 330.1232a, where certification “is effective for 3 years”), and the code tells the department to “assure the review and evaluation” of the services those programs deliver (MCL 330.1116). Nothing we found in the code makes a private practice contract with a CMHSP in order to operate. A program that wants publicly funded clients or county referral relationships will likely need one, though, and that is a contracting question that sits outside facility licensing entirely.

Adding Substance Use Services Changes the Picture

This part of Michigan law moved in 2026. LARA’s revised SUD rules took effect June 3, 2026. The program categories a license may now carry are set out in R 325.1303(6)(d), and the menu is short: methadone, residential, or residential withdrawal management. Outpatient was left off it. A second piece matters for therapists. Under R 325.1303(3), a clinician licensed under Article 15 of the Public Health Code needs no SUD license to treat within the scope of that license, as long as the work is not done “under a group or organization offering substance use disorder services” and does not include methadone.

Put together, office-based substance use counseling added to a therapy practice no longer lines up with any LARA license category. A methadone program, a residential program, or residential withdrawal management is different, and each of those still needs a LARA SUD program license. Two loose ends remain. The rule text we read doesn’t say what the change means for former outpatient licensees or for group practices, and the statute, MCL 333.6233, still bars running a substance use disorder services program without a license unless the person is “otherwise licensed to provide psychological, medical, or social services”. Get LARA’s answer in writing before you advertise a substance use track. Medicaid, CMHSP, and payer contracts can set their own SUD provider standards, which is a separate question from state licensure. Accreditation is one place that shows up. MDHHS’s Substance Use Disorder Services Policy Manual (Treatment Policy #05) makes CARF, COA (Council on Accreditation) or Joint Commission accreditation a requirement for methadone programs in a PIHP network. For other SUD services we see the same three bodies on Michigan providers’ walls, though that part is our observation rather than a written state rule.

Offering Ketamine From a Michigan Outpatient Mental Health Practice

As far as we can find, LARA has no facility license for outpatient mental health, so there is no license category for ketamine to fall inside or outside of. In our reading, ketamine and Spravato in a Michigan office are simply part of the prescribers’ own medical practice, so the rules that matter are the ones that follow the drug and the people ordering it. That also shapes who can own the business. Answering a physician’s request about a for-profit diagnostic imaging center, LARA pointed to MCL 450.1281, under which a corporation formed to provide learned-profession services “must incorporate as a professional corporation,” and MCL 450.1283, under which “Each shareholder of a professional corporation must be a licensed person” in those services. A counseling group that wants to add a psychiatrist’s ketamine service should look at the ownership structure first, which we cover in the ketamine section of Michigan Drug and Alcohol Outpatient Treatment Licensing.

Michigan runs its own controlled substance license alongside DEA’s. MCL 333.7303(1) reaches any person who “manufactures, distributes, prescribes, or dispenses a controlled substance in this state,” and subsection (6) requires one license per principal place of business or professional practice. Federal law puts ketamine in Schedule III (21 CFR 1308.13(c)(7)) and DEA counts locations the same way (21 CFR 1301.12(a)), so a practice with two offices that both stock ketamine is looking at two state licenses and two DEA registrations.

The state’s monitoring system comes next. Under MCL 333.7303a, prescribers must register with the electronic system for monitoring schedule 2, 3, 4 and 5 drugs, and subsection (4) requires a patient report before prescribing or dispensing “a controlled substance in a quantity that exceeds a 3-day supply.” The listed exceptions to that report cover article 17 hospitals and freestanding surgical outpatient facilities, veterinary settings and hospice, with nothing for a physician office. In our reading one in-office dose never crosses the 3-day line, so the report question rarely comes up, but the registration still applies.

Nurse practitioners do not prescribe ketamine on their own authority here. MCL 333.17211a(1)(b), added by 2016 PA 499 and in force since April 9, 2017, lets an APRN prescribe schedule 2 to 5 drugs “as a delegated act of a physician,” and subsection (2) puts both the APRN’s and the physician’s names and DEA numbers on the prescription. Spravato is narrower still. Its Medication Guide allows administration only at sites certified under the Spravato REMS program and requires at least 2 hours of monitoring after the patient uses the spray.

Staffing an Outpatient Mental Health Practice

The licensure tiers below do most of the work in keeping this affordable. A small outpatient mental health practice typically runs with a clinical lead and two to three licensed clinicians. Counselors in Michigan’s substance abuse, behavioral disorder, and mental health category had a $61,960 median wage (BLS OEWS, May 2024), a little over the roughly $59,350 U.S. figure, which typically puts a clinical lead plus two to three clinicians at $200,000 to $270,000 a year in clinical payroll before benefits. Most Michigan outpatient practices never pay that full number, and the state’s licensure structure is part of why. Counselors, social workers, and psychologists each get licensed through LARA under their own boards, and each profession has a limited tier for people still earning supervised hours. LARA’s counseling guide requires a master’s-level counselor to log 3,000 hours of post-degree experience over at least two years, after the limited counselor license is issued, before full licensure. Social work has a limited master’s license, and a master’s-level psychologist can hold a temporary limited license that allows practice “under the supervision of a fully licensed psychologist.” Many practices staff a meaningful share of clinical roles with those associate-level clinicians under a fully licensed supervisor, which lowers the wage bill while those clinicians finish the hours they need for full licensure. A real staffing estimate follows once the program model is actually defined.

What Delays Michigan Outpatient Mental Health Practices

Three issues account for most of the friction. The first is assuming a facility license applies when the actual regulatory layer is individual clinician licensure. The second is adding substance use treatment without confirming whether it now requires LARA licensure. The third is underestimating how much of a publicly funded caseload depends on a working CMH relationship, even though that relationship isn’t a licensing requirement in itself.

Frequently Asked Questions

Weighing whether a CMHSP relationship makes sense for your Michigan practice? Reach out here.

Sources

• Mich. Admin. Code R 325.1301 and R 325.1303 (2026 MR 11, eff. June 3, 2026): LARA SUD Administrative Rules (checked October 8, 2026)
• MCL 333.6233, Public Health Code Part 62: SUD services program license requirement (checked October 8, 2026)
• LARA, Non-Long Term Care State Licensing Section: facility types licensed, including psychiatric hospitals or units, and section contact (checked October 8, 2026)
• MCL 330.1134, Mental Health Code: licensing of psychiatric hospitals and units (checked October 8, 2026)
• MCL 330.1100a, Mental Health Code definitions (MDHHS published copy): Mental Health Code Chapter 1 (checked October 8, 2026)
• MCL 330.1116, Mental Health Code: department duties toward CMHSPs (checked October 8, 2026)
• MCL 330.1232a, Mental Health Code: CMHSP certification (checked October 8, 2026)
• LARA, Professional Counselor Licensing Guide: limited license and supervised experience (checked October 8, 2026)
• LARA, Michigan Board of Social Work: social work license types (checked October 8, 2026)
• LARA, Master’s Limited Psychologist Temporary Licensing Guide: TLLP guide and FAQs (checked October 8, 2026)
• MDHHS, Substance Use Disorder Services Policy Manual: Treatment Policy #05, methadone program accreditation (checked October 8, 2026)
• LARA: Declaratory ruling request on learned-profession corporations (MCL 450.1281 and 450.1283) (checked October 9, 2026)
• MCL 333.7303: Controlled substance license, separate license per place of practice (checked October 9, 2026)
• MCL 333.7303a: Monitoring system registration and patient report requirements (checked October 9, 2026)
• 2016 PA 499, MCL 333.17211a: APRN prescribing as a delegated act (checked October 9, 2026)
• 21 CFR 1308.13(c)(7), via Cornell LII: Ketamine in Schedule III (checked October 9, 2026)
• 21 CFR 1301.12(a), via Cornell LII: Separate DEA registration for each location (checked October 9, 2026)
• FDA: Spravato prescribing information and Medication Guide (REMS, two-hour monitoring) (checked October 9, 2026)