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Minnesota Drug and Alcohol Outpatient Treatment Licensing

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A. Ant, CADC-II

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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.

Apply now: DHS-7118, substance use disorder treatment program license application | Questions: DHS licensing unit for mental health and substance use disorder programs, dhs.mhcdlicensing@state.mn.us, 651-431-6500

The first paperwork for a new outpatient substance use disorder program in Minnesota goes to the county, not the state. Minn. Stat. 254B.03, subd. 2(c) requires an applicant, “at least 60 days prior to submitting an application for new licensure under chapter 245G,” to notify the county human services director in writing of its intent to open. The county may send the Minnesota Department of Human Services (DHS) a written statement within 60 days of hearing from you, and DHS has to consider it (subd. 2(d)). When you do file, 245G.03, subd. 2(b) makes you document that the notice went out. So the earliest date your DHS application can land is two months after the county letter, and every outpatient timeline in this state should start from that date.

Who Needs a 245G License in the First Place

Chapter 245G covers outpatient and residential treatment alike, and 245G.02, subd. 1 says no person, corporation, partnership or other organization may provide substance use disorder treatment without the commissioner’s license. The exemptions are what an outpatient founder has to read closely. A “licensed professional in private practice” doesn’t need a program license, but 245G.01, subd. 17 defines that person narrowly: licensed under chapter 148F or exempt, practicing “solely within the permissible scope of the individual’s license,” and someone who “does not affiliate with other licensed or unlicensed professionals to provide alcohol and drug counseling services.” A solo LADC seeing clients in an office fits. Bring two or three counselors under one name and, in our reading, you have stopped being a private practice and started being a program. Organizations that only do information, referral, assessment for placement, education or support groups are exempt too (subd. 2).

The 2025 special session amended that exemption list, effective July 1, 2026 or upon federal approval, whichever is later. We haven’t confirmed whether the change has taken effect, so check the current text of 245G.02, subd. 2 before relying on an exemption.

Outpatient Levels Have Statutory Hours

Hours below are quoted from Minn. Stat. 254B.19.

Minnesota sets weekly hour bands for each outpatient ASAM level in statute, which makes the program schedule a compliance document as much as a clinical one.

ASAM level254B.19 requirement for adults
1.0 OutpatientUp to eight hours per week of psychosocial treatment services
2.1 Intensive outpatientNine to 19 hours per week
2.5 Partial hospitalization20 hours or more

Section 245G.07, subd. 1a ties each client’s psychosocial service hours to the level they’re placed in, and 245G.10, subd. 4 says “Group counseling shall not exceed 16 clients.” A program that sells itself as IOP but schedules eight hours a week is a Level 1.0 program on paper, whatever the brochure says.

Outpatient Next to Residential

Here is how the same 245G license plays out on each side, drawn from the statutes cited in this guide and its residential companion.

RequirementOutpatient (245G)Residential (245G)
County notice before applyingAt least 60 days (254B.03)At least 60 days (254B.03)
Application fee from January 1, 2026$2,100$2,100
Minnesota Department of Health facility licenseNot required by 245GRequired (245G.21, subd. 4)
Staffing presenceFirst aid and CPR certified staff on the premises when clients are present (245G.10, subd. 5)The same, plus a responsible staff member on duty 24 hours a day (245G.10, subd. 3)
ASAM levels in 254B.191.0, 2.1, 2.53.1, 3.3, 3.5 (3.2 and 3.7 withdrawal management under 245F)
DHS decision clock90 working days after a complete application90 working days, plus the separate MDH license

Fees Since January 2026

A new 245G application costs $2,100 under 245A.10, subd. 3(a), a figure DHS’s 2025 SUD implementation plan confirms took effect January 1, 2026. The annual license fee follows licensed capacity: $2,600 for 1 to 24 persons, $3,000 for 25 to 49, $5,000 for 50 to 74, $10,000 for 75 to 99, $15,000 for 100 to 199 and $20,000 for 200 or more (subd. 4(b)). The smallest outpatient programs felt that most, since their annual fee went from $600 to $2,600. Outpatient operators who run several offices should price in the satellite charge too. Each satellite office raises the yearly renewal bill by $500, per the same DHS plan.

Medication for Opioid Use Disorder in Outpatient Care

Minnesota’s outpatient statutes don’t force a program to prescribe MOUD. We looked through chapter 245G and the 254B rate statutes and found no duty to offer it or to keep clients on it. The obligation that does exist sits at intake. Under 245G.04, subd. 3, the opioid educational material every client receives has to cover “treatment options, including the use of a medication for opioid use disorder.” In practice, a referral pathway on paper is the minimum we’d want an outpatient program to have. A buprenorphine prescriber on staff doesn’t need a federal waiver anymore, and DEA’s registrant letter of January 12, 2023 puts it plainly: “all prescriptions for buprenorphine only require a standard DEA registration number.” Minnesota regulates opioid treatment programs separately under 245G.22, and methadone for opioid use disorder is dispensed there, so we’d want the clinic to name the specific licensed OTP it sends methadone patients to and keep that contact current. Outpatient 245G programs also fall under 245A.242’s requirement to keep opiate antagonists on site, and under a 2026 law change that DHS’s 2026 implementation plans list as effective July 1, 2026, a nasal antagonist can be stocked without a standing order, though intramuscular administration still needs one.

A Stand-Alone Ketamine Clinic in Minnesota

No Minnesota statute or DHS rule speaks to ketamine clinics by name. Treat the facility and ownership analysis here as our interpretation of the provisions and the 2005 Isles Wellness decision we cite, and have a Minnesota health care lawyer test it against your deal.

The clinic itself needs no facility license in our reading. DHS licensure under chapter 245A excludes mental health outpatient services for adults (Minn. Stat. 245A.03, subd. 2, as printed in the 2025 statutes, and subdivision 2 was amended in 2026, so recheck the current text), and a ketamine practice treating depression isn’t providing substance use disorder treatment under 245G. MDH’s outpatient surgical center license doesn’t reach it either. Minn. Stat. 144.55, subd. 2(b) says that category “does not include a physician’s, advanced practice registered nurse’s, physician assistant’s,” or dentist’s “office or clinic for the practice of medicine.” That shifts the regulatory weight onto who owns the practice and who holds the prescribing credentials.

Who Can Own It

Ownership is where Minnesota bites. The Minnesota Supreme Court’s 2005 opinion in Isles Wellness, Inc. v. Progressive Northern Insurance Co. holds that “with limited exceptions, the corporate practice of medicine doctrine exists in Minnesota,” and repeats an older line from Granger v. Adson: “There is no place for a middleman.” The case itself was about chiropractors, so applying it to a lay-owned ketamine company is our reading, but it’s the reading we’d plan around. Physicians can organize under the Professional Firms Act, chapter 319B, where ownership interests “may not be owned or held, either directly or indirectly, except by” licensed professionals and a few other listed holders, and a transfer that breaks the rule “is void” (319B.07). Section 319B.02 counts registered nursing as a professional service alongside medicine, and 319B.40 lets health services professionals practice in combination, which suggests to us that physicians and nurse practitioners can co-own a properly organized firm. Lay investors who want in usually come through a separate management company that supplies the lease, the front desk and the billing under a services agreement. We’d draft that agreement so the physician firm alone sets protocols and holds the DEA registration, and we’d make the management fee flat or cost-based instead of a cut of each infusion. Both drafting points are our recommendations, not Minnesota rules.

Prescribers, Registrations and the PMP

Ketamine is Schedule III (21 CFR 1308.13(c)(7)), and the Minnesota Board of Pharmacy says the state doesn’t require a separate controlled substance registration, so a DEA registration for the clinic address is the registration you add. That pharmacy FAQ is our basis for extending the same answer to prescribers. Minnesota APRNs may “prescribe, procure, sign for, record, administer, and dispense” controlled substances (Minn. Stat. 148.235, subd. 7a) and must file their DEA registrations with the Board of Nursing (subd. 7b). A newer nurse practitioner works the first 2,080 hours under a collaborative agreement (148.211, subd. 1c). A summary of 2026 APRN practice changes dated August 21, 2026 and posted on the Minnesota health licensing boards’ site says the requirement that those hours be in a hospital or integrated clinical setting was dropped as of August 1, 2026, and that for services other than primary care or mental health, the agreement must be completed “in a setting where APRNs and physicians work together to provide patient care.” A ketamine clinic for depression arguably sits under mental health, but confirm that classification for your NP before scheduling solo shifts.

We read in-clinic doses as outside PMP reporting, since Minn. Stat. 152.126 says “Dispensing does not include the direct administering of a controlled substance.” A take-home supply would count as dispensing. Every prescriber with a DEA registration still has to register with the Minnesota Prescription Monitoring Program. Esketamine (Spravato) carries its own federal gate: the FDA medication guide restricts it to REMS-certified healthcare settings, with at least 2 hours of monitoring after every dose.

Clinics that pick up patients from a residential program should read the referral and EKRA discussion in the Minnesota Drug and Alcohol Inpatient Treatment Licensing ketamine section. For whether a mental health clinic can add ketamine, see Minnesota Mental Health Outpatient Licensing.

Staffing an Outpatient Program

An outpatient 245G program carries the same leadership requirements as a residential one. You need a treatment director, an alcohol and drug counselor supervisor with three or more years of individual and group counseling, and counselors who either hold a chapter 148F license or qualify for an exemption from it (245G.10 and 245G.11). Drug control policies are “developed by a registered nurse” under 245G.08, which also requires access to a licensed mental health professional. Staff with first aid and CPR certification must be on the premises whenever clients are present. When the treatment director, counselor supervisor or RN position goes vacant, DHS has to hear about it within five business days.

The Minnesota median for substance abuse, behavioral disorder, and mental health counselors is $58,780, according to BLS OEWS data for May 2025, against $59,350 nationally. The 25th percentile in Minnesota is $48,910 and the 75th is $65,430. A lean outpatient team of four clinical salaries at the state median (director, supervisor, two counselors) runs about $235,120 a year before benefits and the RN’s time. That total is more flexible than it looks. The flexibility comes from the temporary permit that Minnesota’s Board of Behavioral Health and Therapy issues under Minn. Stat. 148F.035. Its application asks for an associate degree or equivalent, 270 clock hours of coursework, an 880-hour practicum and a supervising licensed counselor who signs on for a term of up to twelve months, renewable. Section 245G.11, subd. 11 lets permit holders provide treatment services under that supervision, and DHS’s 2025 SUD plan files them under the heading “Temporary permit holders (ADC-T).” An outpatient clinic whose counselor supervisor oversees permit holders working toward the full LADC can pay them less while they finish, which in our experience trims clinical payroll by 40 to 60 percent compared with hiring only licensed counselors. Student interns and former students can’t exceed half the treatment staff (245G.11, subd. 10(c)). Rather than paying for an RN on site all week, many outpatient programs we see contract one RN for the policy and medication work. How many counselor hours you need depends on whether you run 1.0, 2.1 or 2.5, so that choice comes before we price a roster.

The Joint Commission Route for Established Programs

Under 245G.031 an outpatient program accredited by The Joint Commission, the only accrediting body the statute names, can ask DHS for alternative licensing inspections. It isn’t an opening-day option. The program must already have had a full DHS inspection after its first license and a five-year record free of conditional, suspended or revoked licenses and substantiated maltreatment, with two years of correction orders all resolved. CARF accreditation doesn’t qualify. The Minnesota Drug and Alcohol Inpatient Treatment Licensing guide walks through the steps in more detail.

How to Submit Your Outpatient Application

The application is form DHS-7118, linked from the “Apply for a license” section of DHS’s substance use disorder licensing page. The same page lists the Mental Health, Substance Use Disorder, and Children’s Residential Facility Licensing Unit for questions, at dhs.mhcdlicensing@state.mn.us or 651-431-6500. DHS describes its Provider Hub as an online tool to apply for and manage licenses and certifications.

Two newer pieces belong in the outpatient packet. One is proof of the county notice. The other is the attestation DHS’s 2026 SUD implementation plan describes, effective July 1, 2026 under 245A.04, subd. 1(j), stating whether an unaffiliated business or consultant helped with the application. The plan applies it to applicants and license holders “that receive public funds” and says the commissioner “shall not issue a license” if a required attestation is missing. DHS’s quarterly Application Information Session covers application requirements and policy writing for 245G programs. The last 2026 session is December 16, from 1:00 to 3:00 p.m. on Microsoft Teams, and the page doesn’t say attendance is required. Once your application is complete, DHS must act within 90 working days (245A.04, subd. 1).

Where Outpatient Applications Stall

In our experience the most expensive mistake is signing a lease and hiring before the county letter goes out, which leaves rent running through a 60-day wait nobody planned for. Group practices that assumed they were exempt private practices come next, often after a payer or a complaint raises the question for them. A third is an IOP schedule that doesn’t reach nine hours a week.

Frequently Asked Questions

Does an LADC in private practice need a 245G license in Minnesota?

Not if the counselor practices alone within the scope of the license and does not affiliate with other licensed or unlicensed professionals to provide alcohol and drug counseling. Once several counselors work together under one practice, our reading is that it needs a 245G program license.

Is county notice required before applying for an outpatient SUD license?

Yes. Minn. Stat. 254B.03, subd. 2(c) requires written notice to the county human services director at least 60 days before applying for new 245G licensure, and DHS expects proof of that notice in the application.

How many hours does intensive outpatient require in Minnesota?

Minn. Stat. 254B.19 sets Level 2.1 intensive outpatient at nine to 19 hours per week of psychosocial treatment services for adults. Level 1.0 is up to eight hours, and Level 2.5 partial hospitalization is 20 hours or more.

Planning the county letter and the DHS filing for an outpatient program? Send us a note.

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