Minnesota SUD Treatment Program License: Steps and Fees
The Minnesota path to a 245G or 245F SUD program license: county notice, DHS fees, pre-license inspection, and the MHCP and ASAM steps that decide billing.
As of October 2026. Minnesota's 2026 session laws (chapters 95 and 121) and a 2025 special session law amended several of the sections below, and some changes take effect on later dates or on federal approval. Re-read the current text on the Revisor's site and confirm with DHS before you file.
Opening a substance use disorder (SUD) program in Minnesota means clearing two separate gates. The first is the license from the Department of Human Services (DHS), which lets you operate. The second is Medicaid enrollment and level-of-care certification, which decides whether you get paid. In Minnesota, a 245G license lets a substance use disorder program operate, but Medicaid payment depends on a separate step: MHCP enrollment plus ASAM level-of-care certification under 254B.19.
That split catches operators who plan the license and treat billing as paperwork. This guide is for the executive director, COO or compliance lead opening a first Minnesota site or adding one to an existing group. It walks through which license covers which level of care, the county notice that comes before the application, the fees, the inspection, and the enrollment step. For the wider Minnesota picture, start at our Minnesota state hub.
The market is large enough to be competitive. SAMHSA's 2024 survey counted "380 substance use treatment facilities" in Minnesota, and 196 of them were private for-profit organizations (SAMHSA 2024 Minnesota profile).
How do I get a substance abuse treatment facility license in Minnesota?
The short version, in order:
- Decide which license your levels of care fall under (chapter 245G or chapter 245F).
- Send the county human services director written notice at least 60 days before you apply.
- Submit the DHS application, the county notice documentation and the $2,100 application fee.
- Pass the DHS inspection of the physical plant and records, with the observation of the program in operation completed within one year.
- Enroll with Minnesota Health Care Programs (MHCP) and certify each ASAM level of care before you bill Medical Assistance.
- Put referral agreements and an outreach plan in place for the levels you do not provide.
Each step is covered below with the statute behind it.
Which Minnesota license covers which level of care (245G, 245F, OTP)
Chapter 245G covers most SUD treatment: nonresidential programs (outpatient, intensive outpatient and partial hospitalization) and residential programs. Opioid treatment programs are also licensed under 245G, with added standards in section 245G.22. Under 245G.03, subdivision 1, an applicant must comply with section 626.557, chapters 245A, 245C and 260E, and Minnesota Rules chapter 9544 (Minn. Stat. 245G.03). In practice that means the general licensing chapter, background studies, maltreatment reporting and the program rule all apply from day one.
Chapter 245F covers withdrawal management. Under 245F.04, a Minnesota withdrawal management program must be located in a hospital licensed under section 144.50 or be a supervised living facility with "a class A or B license from the Department of Health" (Minn. Stat. 245F.04). That makes withdrawal management a two-agency project: MDH licenses the building, DHS licenses the program.
Minnesota's statute also maps ASAM levels to hours. Under Minnesota Statutes 254B.19, subdivision 1, adults at ASAM level 2.1 intensive outpatient receive "nine to 19 hours per week" of treatment services, and level 2.5 partial hospitalization adults receive 20 hours or more (Minn. Stat. 254B.19). Residential levels 3.3 and 3.5 carry 24-hour staffing and daily treatment services seven days a week. A 2025 amendment to that subdivision changes the wording from "skilled" to "psychosocial" treatment services without changing the hours (Laws 2025, 1st Spec. Sess. ch. 9, art. 4, sec. 37). The Revisor's note on the statute says that amendment "is effective upon federal approval," so confirm which wording DHS applies before you write program descriptions (Minn. Stat. 254B.19). If you want a refresher on how the levels fit together, see our guide to ASAM levels of care.
Application, county notice and need approval
The county comes first. Under Minnesota Statutes 254B.03, subdivision 2(c), the applicant must notify the county human services director in writing "at least 60 days prior to submitting an application for new licensure under chapter 245G" (Minn. Stat. 254B.03). The notice describes the program and the population it will serve. The county then has 60 days to send the commissioner a written statement supporting or opposing the program, and DHS considers it when deciding whether the program is needed.
The application itself proves you did this. Minnesota's 245G.03, subdivision 2, says the applicant must submit documentation that it notified the county under 254B.03, along with any other documents DHS asks for on its forms.
There is a funding consequence too. Under 254B.03, subdivision 2(b), DHS determines whether there is a need for any proposed expansion of SUD services, and the statute directs it to "deny vendor certification to any provider that has not received prior approval" for new programs or added capacity. That certification governs Behavioral Health Fund payment, so treat the need question as part of the license project, not an afterthought.
One exception helps buyers. Under Minnesota's 245A.043, subdivision 3(c), a party that takes over an existing program without an interruption in service longer than 60 days is exempt from the county notice step (Minn. Stat. 245A.043). An acquisition still follows the change-of-ownership notice rules in that section.
Fees by licensed capacity
All of the fees below come from Minnesota Statutes 245A.10, and all are nonrefundable (Minn. Stat. 245A.10).
| Item | Fee |
|---|---|
| Initial application (any new license) | $2,100 |
| 245G annual fee, 1 to 24 people | $2,600 |
| 245G annual fee, 25 to 49 people | $3,000 |
| 245G annual fee, 50 to 74 people | $5,000 |
| 245G annual fee, 75 to 99 people | $10,000 |
| 245G annual fee, 100 to 199 people | $15,000 |
| 245G annual fee, 200 or more people | $20,000 |
| 245F annual fee, 1 to 24 / 25 to 49 / 50 or more | $2,600 / $3,000 / $5,000 |
| Each 245G satellite facility, per year | $500 |
Two planning notes. The application fee stands in for the first year's annual fee, so the jump to the capacity-based fee starts at renewal. And because the tiers are based on licensed capacity, the number you put on the application sets your fee for years. A program licensed for 50 pays nearly double one licensed for 49.
Pre-license inspection, the up-to-two-year license and the revocation bar
Before issuing a Minnesota license, DHS inspects the physical plant and records and observes the program in operation. The observation does not have to happen first. Under 245A.04, subdivision 4(b), if DHS issues the license before observing, these requirements "must be completed within one year after the issuance of the license" (Minn. Stat. 245A.04).
That is where the longer first license comes from. Under 245A.04, subdivision 7(b), DHS may issue a license for up to two years only when it cannot observe the program because it is not yet operational, some records do not exist yet because no one is receiving services, and the applicant complies in every other respect. Read that as an option DHS can use for a brand-new program, not a standard two-year term.
The revocation bar matters for groups with history. Under 245A.04, subdivision 7(d), DHS will not license an applicant or affiliated controlling individual who had a license revoked within the past five years or an application denied within the past two years. Subdivisions 7(e) and 7(f) let DHS make exceptions where the applicant has operated other programs in substantial compliance and the new program serves the community's interest. If anyone on your cap table or leadership team has that history, raise it with DHS early.
MHCP enrollment and ASAM level-of-care certification (256B.0759)
This is the gate that decides cash flow. Laws 2026, chapter 95, article 5, section 29 amended Minnesota Statutes 256B.0759, subdivision 3, so that 245G programs, 245F withdrawal management programs and out-of-state residential programs paid under section 256B.0625 must enroll as MHCP providers and certify their ASAM levels under 254B.19. The session law is blunt: such programs "are ineligible for payment" if they do not (Laws 2026, ch. 95, art. 5, sec. 29). The same amendment says Minnesota programs must offer medications for opioid use disorder on site or facilitate timely access off site.
The operating steps sit in the MHCP Provider Manual. You enroll through the MPSE portal (or by fax), upload proof of your 245G or 245F license, and submit an ASAM Certification Checklist (DHS-7325) for each level. MHCP says to "allow 30 days for processing" an enrollment (MHCP SUD enrollment criteria). The same page tells multi-site operators to enroll each service delivery location separately.
Watch the enrollment freeze. Effective January 27, 2026, DHS froze new MHCP enrollments in 13 service categories, and the list includes "peer recovery support services" (DHS pre-payment review FAQ). Existing enrolled providers may add new locations only for services they already deliver. If your pro forma counts on peer recovery revenue at a new site, confirm your enrollment status with DHS before you build the staffing plan around it.
Referral agreements and the annual outreach plan for levels you do not provide
Minnesota does not expect every program to offer every level, but it does expect a plan for the levels you skip. Under 254B.19, subdivision 2, the license holder must keep documentation of a formal patient referral arrangement agreement for each covered ASAM level it does not provide.
Subdivision 4 adds a program outreach plan. Under Minnesota's 254B.19, the treatment director must "document a review and update the plan annually" (Minn. Stat. 254B.19). The plan covers treatment coordination and transitions across the continuum, including a referral arrangement with a 245F withdrawal management program where one is licensed in your region.
For an executive director, these are artifacts an inspector can ask for. Keep the signed agreements, the outreach plan and the dated annual review in one place you can produce quickly.
Joint Commission alternative inspection
Accreditation helps later, not at opening. Under 245G.031, a license holder with qualifying accreditation may request an alternative licensing inspection only after at least one full DHS inspection after the initial license. Eligibility also needs five years with no conditional, suspended or revoked license and no substantiated maltreatment finding against the facility. For this section, the statute defines the accrediting body as "The Joint Commission" and no other (Minn. Stat. 245G.031).
DHS has to answer a request within 90 days, and even after approval it may run routine inspections every five years and inspect anything the accreditor does not cover. Two program types are excluded outright: 245G.19 programs serving clients with children, and opioid treatment programs licensed under 245G.22.
Checklist for adding a second or third site
Use this when a Minnesota group adds locations:
- Notify before you move or grow. Under Minnesota's 245G.03, subdivision 3, a license holder must notify DHS before a change in MDH licensure, in 245G.18 to 245G.22 services, in location, or (for 245G.21 programs) in capacity.
- New owner, new license. The same subdivision says a Minnesota license holder must apply for a new license when program ownership changes.
- Budget the satellite fee. Each 245G satellite facility adds $500 a year under 245A.10.
- Enroll each location. MHCP enrollment is per service delivery location, and each new ASAM level needs its own certification.
- Test staff access by site. If clinicians or billers will cover more than one Minnesota location, check how your EHR scopes their access at each site; these multi-location EHR permission test cases show how to run that check with fictional roles.
- Check the freeze. Adding a location for a service you already bill is allowed during the freeze; adding peer recovery support as a new service is not, until DHS lifts it.
- Refresh referral agreements. A new site may change which levels you provide in a region, so update the 254B.19 agreements and outreach plan.
- Withdrawal management means MDH too. A new 245F site needs the hospital or supervised living facility license before DHS can license the program.
Where Ease fits
Ease keeps one chart across the levels of care a Minnesota program is licensed for. Each organization configures which levels it offers, such as outpatient, IOP, PHP, residential and withdrawal management, and each patient's placement carries admission, transfer and discharge statuses. Residential programs get a per-location bed board (see bed management and census for residential behavioral health). Groups running several Minnesota sites, or sites in more than one state, run every location on one instance, each with its own NPI and billing provider, and admins configure which sites offer each level of care; more in our piece on EHR for multi-state behavioral health groups. Licensing and certification decisions stay with DHS and MDH.
For the rest of the Minnesota rules that affect operators, including billing and workforce, go back to the Minnesota state hub.
Frequently Asked Questions
Which Minnesota license does a substance use disorder treatment program need?
Most SUD programs, including outpatient, intensive outpatient, partial hospitalization, residential and opioid treatment programs, are licensed by the Minnesota Department of Human Services under Minnesota Statutes chapter 245G. Withdrawal management programs are licensed under chapter 245F and have to sit in an MDH-licensed hospital or an MDH class A or B supervised living facility.
How much does a Minnesota 245G license cost?
Under Minnesota Statutes 245A.10, a new applicant pays a nonrefundable $2,100 application fee. After that, a 245G program pays an annual fee by licensed capacity, from $2,600 for 1 to 24 people up to $20,000 for 200 or more, plus $500 a year for each satellite facility.
Do I have to tell the county before applying for a Minnesota SUD license?
Yes. Minnesota Statutes 254B.03, subdivision 2, says an applicant for a new 245G license must notify the county human services director in writing at least 60 days before applying. The county then has 60 days to send DHS a statement of support or opposition, and DHS considers it when deciding whether the program is needed.
Can a new Minnesota SUD program bill Medical Assistance as soon as it is licensed?
No. Under the 2026 amendment to Minnesota Statutes 256B.0759, licensed 245G and 245F programs paid under 256B.0625 must also enroll as MHCP providers and certify each ASAM level of care under 254B.19. Programs that do not are ineligible for payment, so plan for enrollment and certification before the first Medicaid admission.
Does Joint Commission accreditation replace the Minnesota licensing inspection?
Partly, and only later. Minnesota Statutes 245G.031 lets an accredited license holder request an alternative licensing inspection after at least one full DHS inspection and five clean years. DHS answers within 90 days and can still inspect every five years. Opioid treatment programs and 245G.19 programs serving clients with children are not eligible.
