How to start a behavioral health clinic in Kentucky

Kentucky requires a License to Operate a Behavioral Health Services Organization (mental health / co-occurring, 902 KAR 20:430) and/or License to Operate a Nonhospital-based Alcohol and Other Drug Treatment Entity (outpatient or residential AODE, 908 KAR 1:370) from Kentucky Cabinet for Health and Family Services — Office of Inspector General (OIG); program oversight by the Department for Behavioral Health, Developmental and Intellectual Disabilities (DBHDID) to operate a behavioral health clinic. Fee: BHSO: $750 initial licensure fee; $250 per extension site; $100 for a change of location; $750 for a change of ownership. AODE: $500 licensure fee plus $80 per outpatient extension site separate from the parent facility; $500 on change of ownership. Fees payable to the Kentucky State Treasurer.

License required

Yes

License

License to Operate a Behavioral Health Services Organization (mental health / co-occurring, 902 KAR 20:430) and/or License to Operate a Nonhospital-based Alcohol and Other Drug Treatment Entity (outpatient or residential AODE, 908 KAR 1:370)

Issuing agency

Kentucky Cabinet for Health and Family Services — Office of Inspector General (OIG); program oversight by the Department for Behavioral Health, Developmental and Intellectual Disabilities (DBHDID)

Fee

BHSO: $750 initial licensure fee; $250 per extension site; $100 for a change of location; $750 for a change of ownership. AODE: $500 licensure fee plus $80 per outpatient extension site separate from the parent facility; $500 on change of ownership. Fees payable to the Kentucky State Treasurer.

Renewal

Every year · BHSO: $500 annual renewal fee, filed at least 60 days before the renewal date with proof of accreditation. AODE: annual renewal application with the same $500 licensure fee.

Accreditation

BHSO: required within one year of initial licensure from The Joint Commission, CARF, COA or another nationally recognized accreditor. CCBHC: Kentucky joined the federal CCBHC demonstration in 2020 (CARES Act); its demonstration began 2022-01-01 and clinics are certified by the Department for Medicaid Services and paid under a prospective payment system.

Survey and inspection

AODEs get an annual unannounced survey visit; complaint investigations are unannounced.

Regulation

902 KAR 20:430 (BHSO); 908 KAR 1:370 (AODE); KRS 222.231

1. Decide which license fits: BHSO for mental health or co-occurring MH/SUD treatment; AODE for outpatient, intensive outpatient, partial hospitalization or withdrawal management SUD services
2. Complete the OIG license application (Application for License to Operate a BHSO, or Application for License to Operate a Nonhospital-based AODE) with required documents
3. Pay the licensure fee (BHSO $750; AODE $500) plus any extension-site fees
4. Pass the OIG licensure survey (AODE surveys are unannounced and annual)
5. BHSO: start accreditation within 60 days and become accredited within one year of initial licensure (one-time extension possible); file renewals annually

Staffing

• BHSO executive director (master's degree with two years of supervisory experience in a human services program, or bachelor's degree with two years of experience plus two years of supervisory experience)
• BHSO program director who is a psychiatrist, physician, psychologist, licensed psychological practitioner, APRN, LPCC, LMFT or other listed licensed professional
• Criminal record and registry checks for personnel, plus annual checks on a random 25% sample (BHSO)

Training

• BHSO annual staff training program
• AODE clinicians: at least 10 hours of alcohol and other drug counseling training annually; clinical supervisors also 3 hours of clinical supervision training annually

Program

Kentucky Medicaid (Department for Medicaid Services)

Enrollment portal

Kentucky Medicaid Partner Portal Application (MPPA)

Fiscal agent

Gainwell Technologies (fiscal agent for KY Medicaid claim processing, KYHealth-Net)

Application fee

Kentucky's MAP-811 checklist tells providers subject to the fee to attach a check payable to the Kentucky State Treasurer; DMS's provider-type summaries say which types owe it. Federal rule (42 CFR 455.460): the state must collect the CMS application fee from institutional providers that are newly enrolling or re-enrolling; individual physicians and non-physician practitioners are exempt, as are providers already enrolled in (or that already paid the fee to) Medicare or another state's Medicaid/CHIP. CMS set the fee at $750 for calendar year 2026.

Fingerprinting

Federal rule (42 CFR 455.434, 455.450(c)): providers the state places in the 'high' categorical risk level, and anyone owning 5% or more of such a provider, must submit fingerprints for a criminal background check.

Site visit

Federal rule (42 CFR 455.432, 455.450(b)-(c)): the state must do site visits before and after enrollment for providers in the 'moderate' or 'high' risk levels, and any enrolled provider must allow unannounced on-site inspections.

Revalidation

Federal rule (42 CFR 455.414): every enrolled provider must be revalidated at least once every 5 years.

Full Kentucky Medicaid enrollment guide →

CON program

Yes

Program

Certificate of Need

Agency

Kentucky Cabinet for Health and Family Services, Office of Inspector General

Services covered

• hospitals
• ambulatory surgical centers
• home health agencies
• hospice (including residential hospice by a non-hospice entity)
• nursing facilities, personal care homes, ICF and ICF/IID
• chemical dependency treatment programs
• psychiatric residential treatment facilities (Level I and II)
• PET, MRI, megavoltage radiation and cardiac catheterization
• open heart surgery and organ transplant programs
• special care neonatal beds
• prescribed pediatric extended care facilities
• ground ambulance providers (unless exempt)
• nonsubstantive review: adult day health, private duty nursing agencies, PACE, hospital-owned off-campus freestanding EDs, industrial ambulance, certain acute bed transfers

Kentucky certificate of need details →

State minimum wage

$7.25 an hour

Effective

2009-07-24

Scheduled increases

No scheduled change found in the official sources reviewed.

HCBS 80/20 rule

Federal baseline: 42 CFR 441.302(k) requires the state to show that each provider spends at least 80% of Medicaid payments for homemaker, home health aide and personal care services under 1915(c) waivers on direct care worker pay and benefits. Compliance starts 2030-07-09 (for managed care, the first rating period starting on or after that date); annual payment-adequacy reporting under 441.311(e) starts 2028-07-09. A state may set a lower share for state-defined small providers and exempt providers facing hardship, each only through a public notice-and-comment process. The eCFR text has not changed since 2024-07-09. No state-published 80/20 implementation step (small-provider criteria, hardship exemption or reporting guidance) was found for this state in the official sources reviewed.

Community/behavioral health agencies and mental health clinics — active organization NPIs (NPPES)

1,002 (as of Sep 13, 2026)

Total Medicaid and CHIP enrollment (latest reported month)

1,264,449 (as of Jun 1, 2026)

All Kentucky Behavioral health Medicaid rates, ranked →

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