Frequently Asked Questions

The definition of a licensable facility in North Carolina according to North Carolina General Statute 122C-3(14)b., is as follows:

North Carolina General Statute 122C-3(14)b.:

(14) "Facility" means any person at one location whose primary purpose is to provide services for the care, treatment, habilitation, or rehabilitation of the mentally ill, the developmentally disabled, or substance abusers, and includes:

b. A "licensable facility", which is a facility that provides services to individuals who are mentally ill, developmentally disabled, or substance abusers for one or more minors or for two or more adults. These services shall be day services offered to the same individual for a period of three hours or more during a 24‑hour period, or residential services provided for 24 consecutive hours or more. Facilities for individuals who are substance abusers include chemical dependency facilities.

Therefore, the main purpose of your service must be treatment. Some services are excluded from licensure per N.C.G.S. 122C-22. Please review the General Statute  if you think your service may not require a license. Some typical exclusions are as follows.

§ 122C-22. Exclusions from licensure; deemed status.

(a) All of the following are excluded from the provisions of this Article and are not required to obtain licensure under this Article

(1) Physicians and psychologists engaged in private office practice

(8) Facilities that provide occasional respite care for not more than two individuals at a time; provided that the primary purpose of the facility is other than as defined in G.S. 122C-3(14).

(9) Twenty-four hour nonprofit facilities established for the purposes of shelter care and recovery from alcohol or other drug addiction through a 12-step, self-help, peer role modeling, and self-governance approach.

(10) Inpatient chemical dependency or substance abuse facilities that provide services exclusively to inmates of the Division of Adult Correction of the Department of Public Safety, as described in G.S. 148-19.1.

(11) A charitable, nonprofit, faith-based, adult residential treatment facility that does not receive any federal or State funding and is a religious organization exempt from federal income tax under section 501(a) of the Internal Revenue Code (12) A home in which up to three adults, two or more having a disability, co-own or co-rent a home in which the persons with disabilities are receiving three or more hours of day services in the home or up to 24 hours of residential services in the home. The individuals who have disabilities cannot be required to move if the individuals change services, change service providers, or discontinue services.

When you have determined that the service you wish to provide does require a license, the following questions will help you pinpoint the service category that best fits your proposed program:

  • Do you want to provide a day or residential service?
  • Who do you want to work with?
    • People with mental illness, intellectual/developmentally disabilities or substance use disorders?
    • Adults or minors?
  • How do you expect to be paid for the services you provide?

Once you have answered these questions, review the 31 specific services (PDF, 87 KB) that DHSR licenses to determine the best service category for your program. You can find more specific information about each service category under Rules and Resources. Review Subchapter G. Scroll through the document to find the service category number.

The LME-MCO (Local Management Entity-Managed Care Organization) you contract with is the source for referrals. If you do not have a contract with an LME-MCO, you will need to market your facility to relevant community agencies or people.

Twenty-four hour, day treatment, and outpatient treatment facilities are required to have a qualified professional assist in the development of client treatment/habilitation plans to ensure treatment outcomes. The type of service you are licensed to provide and the type of clients you serve will dictate the type of qualified professional you must have. 10A NCAC 27G Section .0100 includes definitions, education and experience requirements of qualified professionals.

A qualified professional or an associate professional must meet one of the criteria outlined in the staff definitions in 10A NCAC 27G .0104. If an individual meets the criteria for a QP or an AP, then they can market themselves as such. There may be further requirements for a QP or AP position from individual agencies or organizations.

10A NCAC 27G .0104 STAFF DEFINITIONS
The following credentials and qualifications apply to staff described in this Subchapter:

  1. "Associate Professional (AP)" within the mental health, developmental disabilities and substance abuse services (mh/dd/sas) system of care means an individual who is a:
    1. graduate of a college or university with a masters degree in a human service field with less than one year of full-time, post-graduate degree accumulated mh/dd/sa experience with the population served, or a substance abuse professional with less than one year of full-time, post-graduate degree accumulated supervised experience in alcoholism and drug abuse counseling. Supervision shall be provided by a qualified professional with the population served until the individual meets one year of experience. The supervisor and the employee shall develop an individualized supervision plan upon hiring. The parties shall review the plan annually; or
    2. graduate of a college or university with a bachelor's degree in a human service field with less than two years of full-time, post-bachelor's degree accumulated mh/dd/sa experience with the population served, or a substance abuse professional with less than two years of full-time, post-bachelor's degree accumulated supervised experience in alcoholism and drug abuse counseling. Supervision shall be provided by a qualified professional with the population served until the individual meets two years of experience. The supervisor and the employee shall develop an individualized supervision plan upon hiring. The parties shall review the plan annually; or
    3. graduate of a college or university with a bachelor's degree in a field other than human services with less than four years of full-time, post-bachelor's degree accumulated mh/dd/sa experience with the population served, or a substance abuse professional with less than four years of full-time, post-bachelor's degree accumulated supervised experience in alcoholism and drug abuse counseling. Supervision shall be provided by a qualified professional with the population served until the individual meets four years of experience. The supervisor and the employee shall develop an individualized supervision plan upon hiring. The parties shall review the plan annually; or
    4. registered nurse who is licensed to practice in the State of North Carolina by the North Carolina Board of Nursing with less than four years of full-time accumulated experience in mh/dd/sa with the population served. Supervision shall be provided by a qualified professional with the population served until the individual meets four years of experience. The supervisor and the employee shall develop an individualized supervision plan upon hiring. The parties shall review the plan annually.
  1. "Qualified professional" means, within the mh/dd/sas system of care:
    1. an individual who holds a license, provisional license, certificate, registration or permit issued by the governing board regulating a human service profession, except a registered nurse who is licensed to practice in the State of North Carolina by the North Carolina Board of Nursing who also has four years of full-time accumulated experience in mh/dd/sa with the population served;
    2. a graduate of a college or university with a Masters degree in a human service field and has one year of full-time, pre- or post-graduate degree accumulated supervised mh/dd/sa experience with the population served, or a substance abuse professional who has one year of full-time, pre- or post-graduate degree accumulated supervised experience in alcoholism and drug abuse counseling;
    3. a graduate of a college or university with a bachelor's degree in a human service field and has two years of full-time, pre- or post-bachelor's degree accumulated supervised mh/dd/sa experience with the population served, or a substance abuse professional who has two years of full-time, pre- or post-bachelor's degree accumulated supervised experience in alcoholism and drug abuse counseling; or
    4. a graduate of a college or university with a bachelor's degree in a field other than human services and has four years of full-time, pre- or post-bachelor's degree accumulated supervised mh/dd/sa experience with the population served, or a substance abuse professional who has four years of full-time, pre- or post-bachelor's degree accumulated supervised experience in alcoholism and drug abuse counseling.

DHSR does not assist with funding for facilities. Prospective providers should determine their funding source prior to applying for a mental health license with DHSR. If your plan includes being reimbursed with state dollars or Medicaid dollars, you will need to have a contract with an LME/MCO, and must contact the LME/MCO you wish to work with (generally the LME/MCO for your region) to find out the process for contracting with them.

Local Management Entity/Managed Care Organizations Directory

In order to be paid with Medicaid or state funds for providing a service, there may be additional staffing, training, or treatment requirements, for that particular service. These additional requirements are called "clinical coverage policies" for Medicaid funds, and "service definitions" for state funds. You may wish to research the service definition or clinical coverage policy that matches your service before you contact your LME/MCO.

DMH/DD/SAS web page with state funded service definitions

NC Medicaid web page that includes links to Clinical Coverage Policies for Medicaid Reimbursement.

Private Pay
If a prospective provider does not wish to take advantage of public dollars as a funding source (i.e. Medicaid, state, county funds), then the provider does not need to have a contract with the local LME/MCO and can just bill prospective clients.

Yes. Serving most clients without first obtaining a license is a violation of the law. Specifically, North Carolina General Statute 122C-28 states: "Operating a licensable facility without a license is a Class 3 misdemeanor and is punishable only by a fine not to exceed fifty dollars ($50.00), for the first offense and a fine, not to exceed five hundred dollars ($500.00), for each subsequent offense. Each day's operation of a licensable facility without a license is a separate offense."

Yes. All staff must be trained and competent to provide services to the clients the facility serves.

Staff training should be provided by a person who is competent in the area in which staff need training. Training in medication administration, for example, must be conducted by a licensed registered nurse, pharmacist, or other legally qualified person as per 10A NCAC 27G .0209(c)(3). Training in client rights, including restrictive interventions, must be conducted by a person trained to train others. Your qualified professional may be a resource for assisting, developing or performing some of the required training. Your LME-MCO may also be a resource for training resources.

Yes, staff must be in place and the facility must be completely furnished and ready to open before an initial license is issued.

Mental Health Licensure requires the licensee to develop written policies and procedures. The Applicant’s policies and procedures manual must be submitted to the Licensure & Training Consultant at the first review. Policies and procedures manual helps align the missions and goals of the organization, the applicable laws and rules, and the processes by which the work is to be done. It serves as a consistent source for organizational policy, which are the overall regulations that govern the business, and the procedures that define how those policies will be implemented. Therefore, writing them well will help keep the organization on path and ensure that standard procedures are being conducted the same way by all staff.

Why Separate Policies and Procedures:
Policies reflect governing rules and are general in nature. Procedures indicate the specific implementation of a given policy. Policies adapt to changes in governmental statutes. Procedures, in addition to adapting to changes in policies, should also evolve with new tools and methods of treatment. This separation will ultimately serve to distinguish what is based on rules and what are the existing standards of practice.

Where to Begin:
You must begin by assembling all applicable North Carolina General Statute 122C and the 10A NCAC North Carolina Administrative Code (mental health licensure rules) for the type of license or designation sought. All applicable Rules become the foundation of your new policy and procedure manual. In the absence of all else, these things must be satisfied. The key to writing strong procedures and policies is to make the documents rigid enough to clearly indicate the rules of the organization, but flexible enough to be able to be followed easily and without significant deviation.

Rules:
The following rules are essential for all licensed mental health facilities to help formulate the required Operations and Management Policies, Guidelines and Procedures:

10A NCAC Chapter 13 N.C. Medical Care Commission
Subchapter O Health Care Personnel Registry
.0101 Definitions
.0102 Investigating and Reporting Health Care Personnel

10A NCAC Chapter 26 Mental Health, General
Subchapter C
Designation of Facilities for the Custody and Treatment of Involuntary Clients

10A NCAC Chapter 27 Mental Health, Community Facilities and Services
Subchapter CProcedures and General Information
Subchapter DGeneral Rights
Subchapter ETreatment or Habilitation Rights
Subchapter F24-Hour Facilities
Subchapter GRules for Mental Health, Developmental Disabilities, and Substance Abuse Facilities and Services

DHSR does not maintain information on consultants who write policies and procedures for mental health providers. To recommend consultants would be a conflict of interest for DHSR as a regulatory agency.

Type of FacilityNumber of BedsBase FeePer Bed Fee
Non-ICF/IID Facilities6 or less$350.00$0
Non-ICF/IID Facilities7 or more$525.00$19.00
ICF/IID Facilities6 or less$900.00$0
ICF/IID Facilities7 or more$850.00$19.00
Non- Residential FacilitiesN/A$265.00N/A

Yes, but there are restrictions. These restrictions include: (1) 10A NCAC 27G .5600 and .5100 license categories are the only two licensure categories that allow mobile/manufactured homes, and (2) the maximum number of clients is three. In addition, a waiver is required for this setting (contact Construction Section).

Take the completed service categories section in the licensure application to your zoning, building and/or fire officials. Providers of day, outpatient and residential need zoning approval. Twenty-four hour residential services must present completed application to their LME-MCO to request a letter of support.

Yes. If you provide residential services for handicapped clients, you need to provide proper accommodations. Contact your local building official for information.

No. You need to review the physical plant requirements in 10A NCAC 27G Section .0300 to verify the facility meets the construction, space and other physical plant requirements for the clients to be served. You may, however, contact the DHSR Construction Section for specific questions.

No. A facility required to provide a second remote exit from any story must be a door with stairs meeting the North Carolina State Building Code.

Physical plant requirements are listed in the initial application packet. No DHSR construction fees are required for a day facility.

Application

  • Take the completed application (pages 9-14) to your local zoning office and obtain zoning approval.
  • Attach the zoning approval letter to the application.
  • Preliminary program approval letter is required from the State Opioid Treatment Authority (SOTA) for all service category 3600 facilities.
  • Submit all items listed in Requirements for Day Programs box on page 8, including approved:
    • Fire Marshal,
    • Sanitation and
    • Building Officials inspection reports as required.
  • Include initial licensure fee upon submitting all items.
  • Write a letter briefly describing the services to be offered by the facility.
  • Develop written policies and procedures for your service but do not submit them with the application.
  • Day Programs for children and adolescents cannot be in a building classified as a Business Occupancy. These programs are required to meet either Group E-Educational Occupancy or Group I-4 - Child Daycare Occupancy under the NCSBC.

24-hour residential applicants must contact the LME-MCO in the catchment area to verify/review if there is a need for the particular twenty-four hour residential service (see 10A NCAC 27G .0406). The LME-MCO will issue the letter of support which needs to be enclosed with the initial licensure application or a change application if changing service category.

All licenses expire at the end of the calendar year. A renewal application will be sent in October to be returned before the end of that year with the annual fee and appropriate inspections.

If there is a change of ownership to a new provider under the current Innovations Waiver, as long as the facility was licensed for five or six beds prior to 6/5/2011, the new owner can continue to be licensed for five or six beds and serve Innovation Waiver consumers in those beds.

The National Provider Identifier (NPI) is a Health Insurance Portability and Accountability Act (HIPAA) Administrative Simplification Standard. The NPI is a unique identification number for covered health care providers. Covered health care providers and all health plans and health care clearinghouses must use the NPIs in the administrative and financial transactions adopted under HIPAA. If you have questions or need additional information regarding the NPI number, call the toll free number 1-800-465-3203 or visit the NPI website.

Program Code

10 NCAC 27G

Facility Type/Service Category

Day/24-Hour/ Periodic

.1100

Partial Hospitalization for individuals who are acutely mentally ill

Day

.1200

Psychosocial Rehab for individuals with Severe and Persistent Mental Illness

Day

.1300

Residential Treatment for Children or Adolescents

24- Hour

.1400

Day Treatment for Children and Adolescents with Emotional or Behavioral Disturbances

Day

.1700

Residential Treatment Staff Secure for Children or Adolescents

24- Hour

.1800

Intensive Residential Treatment for Children or Adolescents

24- Hour

.1900

Psychiatric Residential Treatment for Children and Adolescents

24- Hour

.2100

Specialized Community Residential Centers for Individuals with Developmental Disabilities

24- Hour

.2200

Before/After School and Summer Developmental Day Services for Children with or at Risk for Developmental Delays, Developmental Disabilities, or Atypical Development

Day

.2300

Adult Developmental and Vocational Program for Individuals with Developmental Disabilities

Day

.2400

Developmental Day Services for Children with or at Risk for Developmental Delays, Developmental Disabilities or Atypical Development

Day

.3100

Nonhospital Medical Detoxification for Individuals who are Substance Abusers

24- Hour

.3200

Social Setting Detoxification for Substance Abusers

24- Hour

.3300

Outpatient Detoxification for Substance Abuse

Periodic

.3400

Residential Treatment/Rehabilitation for Individuals with Substance Abuse Disorders

24- Hour

.3600

Outpatient Opioid Treatment

Periodic

.3700

Day Treatment Facilities for Individuals with Substance Abuse Disorders

Day

.4100

Residential Recovery Programs for Individuals with Substance Abuse Disorders and their Children

24- Hour

.4300

Therapeutic Community

24- Hour

.4400

Substance Abuse Intensive Outpatient Program (SAIOP)

Periodic

.4500

Substance Abuse Comprehensive Outpatient Treatment Program (SACOT)

Periodic

.5000

Facility Based Crisis Services for Individuals of All Disability Groups

24- Hour

.5100

Community Respite Services for Individuals of All Disability Groups

24- Hour

.5200

Residential Therapeutic (Habilitative) Camps for Children and Adolescents of All Disability Groups

24- Hour

.5400

Day Activity for Individuals of All Disability Groups

Day

.5500

Sheltered Workshops for Individuals of All Disability Groups

Day

.5600

Supervised Living for Individuals of All Disability Groups

24- Hour

.6000

Inpatient Hospital Treatment for Individuals who have Mental Illness or Substance Abuse Disorders

24- Hour