How to start a behavioral health clinic in Michigan

Michigan requires a Substance Use Disorders Service Program license (service categories include Outpatient, SARF, MAT) from Michigan Department of Licensing and Regulatory Affairs (LARA) — Bureau of Community and Health Systems to operate a behavioral health clinic. Fee: $500. Processing time: LARA notifies the applicant within 30 days if the application is incomplete, and conducts a prelicensure survey and decides within 3 months after the application is complete.

License required

Yes

License

Substance Use Disorders Service Program license (service categories include Outpatient, SARF, MAT)

Issuing agency

Michigan Department of Licensing and Regulatory Affairs (LARA) — Bureau of Community and Health Systems

Fee

$500

Fee details

$500 application fee for a new SUD service program regardless of how many service categories; $500 for a change of ownership or relocation; no fee for adding/removing service categories, capacity changes, name changes or adding mobile units.

Processing time

LARA notifies the applicant within 30 days if the application is incomplete, and conducts a prelicensure survey and decides within 3 months after the application is complete.

Accreditation

Not stated as a licensing requirement. Michigan joined the federal CCBHC demonstration in 2021 under the CARES Act expansion; clinics must complete MDHHS CCBHC certification by documenting that they meet SAMHSA and MDHHS criteria.

Survey and inspection

Prelicensure survey before the decision and a post-licensure survey within 3 months after the initial license.

Regulation

Mich. Admin. Code R 325.1301 et seq. (incl. R 325.1303); MCL 330.1260-330.1287 (Mental Health Code ch. 2A); Public Health Code article 6

1. Complete LARA form BCHS-SUD-100 (Substance Use Disorders Service Program Licensure Application), selecting service categories such as Outpatient
2. Submit the application with required attachments and the $500 fee (the application is not complete until both are received)
3. Pass LARA's prelicensure survey
4. Receive the license naming the authorized service categories and post it with hours of operation
5. Complete LARA's post-licensure survey within 3 months of initial licensure

Program

Michigan Medicaid (Michigan Department of Health and Human Services)

Enrollment portal

Community Health Automated Medicaid Processing System (CHAMPS) — Provider Enrollment

Fiscal agent

None named — MDHHS runs CHAMPS provider enrollment itself

Application fee

Michigan's 2012 bulletin MSA 12-55 charges the fee to every provider type except individual physicians and non-physician practitioners, for each enrolled provider type at initial enrollment and re-enrollment but not at revalidation or for updates. Medicare- or other-state-enrolled providers are exempt, and hardship exceptions can be requested in writing. 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

MSA 12-55 classes newly enrolling home health agencies and DMEPOS suppliers as high risk, subject to fingerprint-based checks; every enrolled provider and 5%+ owner must consent to background checks including fingerprints. 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

MSA 12-55 puts ambulance services, community mental health centers, CORFs, hospices, independent labs, physical therapists, and revalidating home health agencies and DMEPOS suppliers in the moderate tier, subject to unannounced pre- and post-enrollment site visits. 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

MDHHS revalidates at least every five years (or sooner on request), with a 90-day window to finish in CHAMPS. Federal rule (42 CFR 455.414): every enrolled provider must be revalidated at least once every 5 years.

Full Michigan Medicaid enrollment guide →

CON program

Yes

Program

Certificate of Need

Agency

Michigan Department of Health and Human Services, Certificate of Need Program; review standards set by the CON Commission

Services covered

• new health facilities and changes in bed capacity
• covered capital expenditures of $2,500,000+ (indexed annually)
• neonatal intensive care / special newborn nursing
• open heart surgery
• extrarenal organ transplantation
• lithotripsy
• megavoltage radiation therapy
• PET
• surgical services (freestanding outpatient surgery, ASCs, hospital surgical departments)
• cardiac catheterization
• fixed and mobile MRI
• fixed and mobile CT
• air ambulance
• child/adolescent specialized psychiatric programs

Michigan certificate of need details →

State minimum wage

$13.73 an hour

Effective

2026-01-01

Scheduled increases

Rises to $15.00 on 2027-01-01 under PA 337 of 2018 as amended in 2025.

Rate pass-through

Medicaid pays a direct care worker wage add-on of $3.40/hour (funded for 2024-10-01 to 2026-09-30); MDHHS and the MI Choice, MI Health Link and PIHP plans must pass it through. The FY2026-27 conference budget keeps the $3.40 increase, requires the uplift to go directly to workers with documented proof, and directs recoupment from employers that do not pass it through.

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)

2,951 (as of Sep 13, 2026)

Total Medicaid and CHIP enrollment (latest reported month)

2,130,181 (as of Jun 1, 2026)

All Michigan Behavioral health Medicaid rates, ranked →

• Behavioral Health 1915(i) State Plan Amendment (1915(i))
• Coordinated Health HCBS Waiver (1915(c))
• Children's Waiver Program (1915(c))
• Habilitation Supports Waiver (1915(c))
• Choice Waiver (1915(c))
• Waiver for Children with Serious Emotional Disturbances (1915(c))

Michigan waivers and waiting lists →