Kentucky Drug and Alcohol Outpatient Treatment 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.

Apply now: DBHDID online AODE system on Kentucky Online Gateway, “AODE Initial Licensure Application” (how to file, PDF) | Questions: chfs.aodehelpdesk@ky.gov, 502-564-0104 Option 4

Most outpatient addiction programs in Kentucky can open without accreditation and without a Certificate of Need. Partial hospitalization is the exception on both counts. 908 KAR 1:374 says partial hospitalization services “shall be fully accredited,” naming the Joint Commission, CARF and the Council on Accreditation and leaving room for another national accreditor with comparable standards. On top of that, the CON exemption Kentucky gives outpatient behavioral health in KRS 216B.020(1) expressly leaves out “partial hospitalization programs.” An operator who sketches a PHP, IOP and outpatient ladder under one roof is really planning two projects, one of them far slower than the other.

Every level in that ladder is licensed by the Department for Behavioral Health, Developmental and Intellectual Disabilities (DBHDID), Division of Program Integrity, which took over alcohol and other drug entity (AODE) licensing from the Office of Inspector General on April 5, 2023. Residential programs are covered in Kentucky Drug and Alcohol Inpatient Treatment Licensing. How DBHDID and OIG divide the work is mapped on the Kentucky Behavioral Health Licensing overview.

The Outpatient Modalities in 908 KAR 1:374

This table restates the outpatient rule, 908 KAR 1:374, and the fee and extension site provisions of 908 KAR 1:370. Entries under CON reflect how we read KRS 216B.020, not a ruling from the state.

Kentucky licenses an AODE by modality. Each one you intend to run has to appear on the application, because a program “shall not admit clients until the program has obtained a license from the cabinet to operate the specific modality or modalities of treatment referenced on its application” (908 KAR 1:370).

Modality	What the rule sets	Accreditation	CON
Outpatient treatment	Includes referral to medications for addiction treatment	Not required	Exempt
Intensive outpatient	Adults at least 9 hours a week on at least 3 days, no more than 10 patients per staff member	Not required	Exempt
Partial hospitalization	Typically 4 to 6 weeks, at least 5 hours a day on at least 4 days a week	Required	Required
Ambulatory withdrawal management	Withdrawal management delivered outpatient	Not required	Exempt
Office-based opioid treatment (non-physician-owned)	Its own licensed modality	Not required	Exempt

The rule also covers in-home services and narcotic treatment programs. Methadone clinics are a separate modality, and we don’t cover them here.

908 KAR 1:374 was amended more recently than its companion rules. Its history line shows an amendment effective February 16, 2023, while the general rule, 908 KAR 1:370, carries a “Crt eff. 7-1-2026” entry. That is a certification under KRS 13A.3104 that the regulation stays in force without amendment, so its operative text still dates from 2019 and 2020. The cabinet has proposed an amendment to 908 KAR 1:370 to carry out HB 470’s peer support changes. It reached the Legislative Research Commission on July 13, 2026 but had not taken effect as of October 14, 2026, and its filing says “There are no new or increased fees.”

Who Is Exempt From AODE Licensing

The exemption list in 908 KAR 1:370 matters more to outpatient operators than to anyone else. Settings exempt from AODE licensure include self-help groups, federally qualified health centers and rural health clinics, programs licensed as chemical dependency treatment services, and “A practitioner’s private office or clinic” under KRS 216B.020(2). That last exemption is why a physician practice prescribing buprenorphine doesn’t need an AODE license, while the AODE definition does reach a non-physician-owned facility whose affiliated physician or APRN provides office-based opioid treatment to “fifty (50) percent or more of the facility’s patients.” Where the line falls for a group practice owned partly by non-clinicians is a question to put to DBHDID in writing before you sign anything, and that caution is ours rather than the rule’s.

A clinic whose clients mostly carry a primary mental health diagnosis may belong under a different license altogether. The Office of Inspector General licenses behavioral health services organizations under 902 KAR 20:430 for clients where “The mental health disorder is the primary diagnosis and SUD is the secondary diagnosis.” That license is covered in Kentucky Mental Health Outpatient Licensing, and it brings a one-year accreditation deadline the AODE outpatient license does not.

Fees, Extension Sites and Inspection

An AODE pays a $500 licensure fee and renews every year at the same amount. Outpatient programs can add extension sites at $80 each, which residential programs, non-physician-owned OBOT and narcotic treatment programs are not allowed to do. A name change costs $25, a move $80 and a change of ownership $500 (908 KAR 1:370).

Under KRS 222.231(11), DBHDID inspects before it licenses, then at least annually for nonaccredited agencies, with inspections “at least every two (2) years” for accredited ones. The rule is stricter than the statute. It says an outpatient or residential AODE “shall be subject to an annual survey visit,” and those visits are unannounced. Our reading is that an accredited outpatient program should keep budgeting for a DBHDID survey every year until the rule changes.

MOUD in a Kentucky Outpatient Program

908 KAR 1:374 has outpatient programs refer clients to “Medications for addiction treatment,” and treatment planning under 908 KAR 1:370 includes “pharmacological treatment modalities to manage opioid use disorder” where they apply. For a program that wants to prescribe rather than refer, the threshold question is ownership. A clinic owned by non-physicians where half or more of the patients receive office-based opioid treatment falls inside the AODE definition, so that modality has to be on its license. The prescriber needs only a standard DEA registration for buprenorphine, as DEA told registrants in its January 12, 2023 letter: “A DATA-Waiver registration is no longer required to treat patients with buprenorphine for opioid use disorder.” Methadone stays with a licensed narcotic treatment program, and a signed referral and coordination agreement with one close to where your clients live covers that gap. Naltrexone, per SAMHSA, can be prescribed and given by any practitioner licensed to prescribe.

Opening a Ketamine Clinic in Kentucky

Kentucky has no statute or regulation written for ketamine clinics. The no-license conclusion and the ownership structure below are our interpretation. The corporate practice discussion rests on a 1943 Kentucky appellate opinion we read in full.

A physician office giving ketamine for depression is, on our reading, outside Kentucky’s facility licensing law. KRS 216B.020(2)(a) excludes “Private offices and clinics of physicians, dentists, and other practitioners of the healing arts,” apart from offices meeting KRS 216B.015(5) or qualifying as ambulatory surgical centers. A ketamine practice is not an AODE either, because ketamine isn’t a substance use disorder treatment. One angle we did not check is whether a clinic marketing ketamine for chronic pain could fall within Kentucky’s pain management facility law, so keep the clinic’s stated scope to psychiatric indications or ask counsel first.

Who Can Own It

Treat Kentucky as a state that restricts corporate practice. In Kendall v. Beiling (1943), the Court of Appeals, which was then the highest court in Kentucky, held that Kay Jewelry Company was itself practicing optometry through the optometrist it paid a salary and bonus, and it upheld the revocation of his license for aiding that practice. The opinion also observed that “there is scarcely any judicial dissent from the proposition that a corporation cannot lawfully engage in the practice of law or of medicine.” We found no Kentucky statute or regulation that answers the question head on, and because the case turned on optometry, how far it reaches a ketamine clinic in 2026 is our own reading. A cautious structure has a licensed physician owning the medical practice, with investors in a separate management services organization that charges the practice a set management fee, not a share of collections, for space, staff, billing and marketing. Kentucky’s professional entity statutes weren’t part of our review, so a Kentucky health care attorney should pick the entity and review the management agreement. If a patient begins treatment while living in a residential program, the referral and brokering cautions sit under the ketamine heading of Kentucky Drug and Alcohol Inpatient Treatment Licensing.

Nurses, APRNs and the Drug Itself

The Kentucky Board of Nursing’s Advisory Opinion Statement #43 lets an RN give subanesthetic ketamine for psychiatric disorders when the nurse is trained and competent and works under a qualified provider’s direct supervision. The opinion also wants an ACLS-certified provider on site for the whole infusion and until the patient leaves, with monitoring that never lapses. Running a clinic with an RN alone in the room breaks that condition. LPNs are out, according to the opinion’s narrative, even though its summary grid reads otherwise.

APRNs in Kentucky need a CAPA-CS, a collaborative agreement for controlled substances, before writing for controlled substances in Schedules II through V (KRS 314.042), and ketamine sits in Schedule III under 21 CFR 1308.13(c)(7). After four years of controlled substance prescribing under a CAPA-CS, an APRN who has kept a DEA registration and a KASPER master account can ask the Board of Nursing to waive the agreement, though nothing changes until the Board says so in writing. The clinic needs a DEA registration for its address. KASPER reporting under 902 KAR 55:110 falls on dispensers and on health facilities holding a DEA number, which must report the Schedule II through V drugs they dispense by close of business the following business day. On doses given in the chair, the Cabinet’s KASPER page is direct: dispensing practitioners “are required to report to KASPER within one business day of administering or dispensing a controlled substance in KY.” Plan on reporting each in-office ketamine dose, and ask KASPER staff to walk you through account setup. We also did not confirm whether Kentucky requires a separate state controlled substance registration for prescribers. Esketamine (Spravato) adds a federal layer, since the clinic itself has to be enrolled as a certified Spravato REMS setting, and the FDA medication guide requires monitoring “for at least 2 hours after taking SPRAVATO.”

Sharing a building with an AODE outpatient program is common and workable. Keep separate charts, inventory and DEA registration for the ketamine practice. Any payment tied to referrals between the two can run into KRS 222.429, Kentucky’s patient brokering statute, on the AODE side and 18 U.S.C. 220, which reaches outpatient treatment settings licensed under state law.

Staffing an Outpatient AODE

The general rule does most of the staffing work for outpatient programs. 908 KAR 1:370 calls for an administrator, a clinical services supervisor (an LCADC, another listed licensed professional, or a CADC carrying 4,000 post-certification clinical hours) and clinicians drawn from LCADCs, CADCs, RNs and APRNs, with case managers capped at 30 clients each. For IOP the outpatient rule adds its 10-to-1 ceiling on patients per staff member. From January 1, 2027, an AODE may employ only alcohol and drug peer support specialists registered under KRS 309.0831, and that covers people already on staff, per HB 470 (2026 Ky. Acts ch. 80).

In the May 2025 OEWS release, BLS puts the Kentucky median for substance abuse, behavioral disorder, and mental health counselors at $54,190 a year, about $5,000 under the national $59,350. A starter outpatient team of a clinical services supervisor and three counselors runs about $216,760 a year at that median, and closer to $290,360 if all four were paid at the Kentucky 75th percentile of $72,590. Treat those as upper bounds, since Kentucky’s credential ladder lets a new clinic staff well below them. The Kentucky Board of Alcohol and Drug Counselors grants a temporary CADC for two years to bachelor’s-degree holders in any field, who then get at least two hours of supervision twice monthly. Pair those counselors with an LCADC or experienced CADC as clinical services supervisor, trading supervised hours toward full certification for lower starting pay, and an outpatient clinic usually spends 40 to 60 percent less on clinical wages than one hiring only fully certified counselors. A clinic offering medical services can similarly put one RN over a few LPNs. We size the team after the modality list is final.

How to Submit Your AODE Outpatient Application

Filing runs through DBHDID’s online AODE system, reached through Kentucky Online Gateway. The DBHDID flyer lays out the order: an “AODE Verification Form” per license, then the “AODE Initial Licensure Application.” Each outpatient extension site is added and paid for at $80. The Help Desk is reachable at 502-564-0104 Option 4 or 866-231-0003 Option 4 on weekdays from 8 a.m. to 4 p.m. Eastern, or chfs.aodehelpdesk@ky.gov, and the Substance Use Disorder Program Licensure Branch takes questions at BHDIDFKFTProgramLicensureBranch@ky.gov. The rule names the form “Application for License to Operate a Nonhospital-based Alcohol and Other Drug Treatment Entity (AODE),” and the 12/2018 edition can be inspected at DBHDID, 275 East Main Street, Frankfort. A partial hospitalization program will also need its accreditation documents and, before that, a Certificate of Need from the OIG Division of Certificate of Need.

What Holds Up Kentucky Outpatient Licenses

In our experience the slow files are the ones that add partial hospitalization late. An operator licenses outpatient and IOP, then decides to step up to PHP and discovers it needs accreditation and a CON before the first PHP client walks in. Decide on PHP at the start. The other delay is a policy manual copied from a pre-2023 template that still names OIG as the licensing agency and cites old OIG filing instructions.

Frequently Asked Questions

Weighing whether partial hospitalization belongs in your first Kentucky application? Get in touch.

Sources

• CHFS Office of Inspector General: Applications page (AODE oversight moved to DBHDID April 5, 2023) (checked October 14, 2026)
• DBHDID: Division of Program Integrity (checked October 14, 2026)
• DBHDID: Online AODE system flyer (PDF) (checked October 14, 2026)
• 908 KAR 1:370: General requirements, fees, exemptions, staffing (checked October 14, 2026)
• 908 KAR 1:370 proposed amendment: Filed July 13, 2026 (checked October 14, 2026)
• 908 KAR 1:374: Licensure of nonhospital-based outpatient AODEs (checked October 14, 2026)
• 2021 Ky. Acts ch. 125 (KRS 13A.3104): Certification letters (PDF) (checked October 14, 2026)
• 902 KAR 20:430: Behavioral health services organizations (checked October 14, 2026)
• KRS 222.231: AODE licensing and inspection (checked October 14, 2026)
• KRS 216B.020: Certificate of Need exemptions and private practitioner offices (checked October 14, 2026)
• 2026 HB 470: bill record and 2026 Ky. Acts ch. 80 (PDF) (checked October 14, 2026)
• Kentucky Board of Alcohol and Drug Counselors: Temporary CADC instructions (PDF) (checked October 14, 2026)
• U.S. Bureau of Labor Statistics, OEWS May 2025, SOC 21-1018: Kentucky and national estimates (checked October 14, 2026)
• DEA Diversion Control Division: Dear Registrant letter, January 12, 2023 (PDF) (checked October 14, 2026)
• SAMHSA: Naltrexone (checked October 14, 2026)
• Kentucky Board of Nursing: Advisory Opinion Statement #43 (PDF) (checked October 14, 2026)
• KRS 314.042: APRN prescriptive authority (checked October 14, 2026)
• 902 KAR 55:110: KASPER reporting (checked October 14, 2026)
• 21 CFR 1308.13(c)(7), via Cornell LII: Schedule III, ketamine (checked October 14, 2026)
• U.S. FDA: Spravato prescribing information and Medication Guide (PDF) (checked October 14, 2026)
• Court of Appeals of Kentucky, Kendall v. Beiling, 295 Ky. 782, 175 S.W.2d 489 (1943): Opinion text on CourtListener (checked October 14, 2026)
• CHFS OIG: KASPER, who must report and when (checked October 14, 2026)
• KRS 222.429: Patient brokering prohibited (checked October 14, 2026)
• 18 U.S.C. 220, via Cornell LII: Illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories (checked October 14, 2026)