How to start an IOP in Arkansas: the DHS license, the fees and the accreditation shortcut

Who wrote this, honestly

We're Texas operators: we run a licensed Texas outpatient program, PHP through outpatient, and built our own EHR to run it. When we help an owner open in another state, the first task on that client's roadmap is "apply for your state's SUD treatment program license", and the work behind it is finding the state's rule and checking it against the agency's current text. In Arkansas that meant tracing a license that has moved between offices (the rules still say "Office of Alcohol and Drug Abuse Prevention") to the DHS division that issues it today. This guide is that check, and it's the same work our IOP / PHP Program Launch does for a client opening outside Texas. Where we couldn't confirm a detail, we left it out or told you who to ask.

Comparing neighbors? Read our guides for Oklahoma, Louisiana, Missouri, Tennessee and Mississippi, or how to start an IOP or PHP in Texas.

Arkansas at a glance

Question	Arkansas's answer
License for an SUD IOP	Alcohol and other drug abuse treatment program license, issued by DHS's Division of Provider Services and Quality Assurance (DPSQA)
Rule	20 CAR Part 433, Licensure Standards for Substance Abuse Treatment Programs (the DHS standards revised January 2020), under Ark. Code 20-64-901 and following
Fees	$75 nonrefundable application fee and $1,500 nonrefundable licensure review fee for a first-time applicant; $75 annual renewal fee billed by the state (20 CAR 433-102)
License term	One year or three years; a program must comply with all applicable standards to get either
Accreditation	CARF, Joint Commission or COA accreditation for alcohol and drug treatment leads to automatic licensure, after DHS verifies certain state items (20 CAR 433-206); not for methadone programs
Medicaid IOP	H0015, intensive outpatient substance abuse treatment: at least 3 hours a day and 3 days a week, at a DPSQA-licensed site
Managed care	Four PASSEs for members assessed at Tier 2 or higher: Arkansas Total Care, CareSource PASSE, Empower Healthcare Solutions and Summit Community Care
Counselor credentials	LADAC (master's) and LAADAC (bachelor's), licensed by the Arkansas State Board of Examiners of Alcoholism and Drug Abuse Counselors
Kickbacks	No Arkansas statute aimed at patient brokering that we could find; the Medicaid fraud law (Ark. Code 5-55-111) bars paying or taking anything for Medicaid referrals, and federal EKRA covers every payer

Who licenses what

Arkansas has renamed its behavioral health offices several times, and the rule text hasn't caught up. Here's how the pieces fit as of this writing:

• DPSQA issues and surveys the license. Under Ark. Code 25-10-145, DPSQA certifies, licenses and surveys long-term care providers, Medicaid providers, substance abuse providers and other programs DHS licenses. Its how to become a provider page lists alcohol and other drug abuse treatment programs among the provider types it licenses, and it's where to start for the current application.
• OSAMH runs the policy and the money. DHS's Office of Substance Abuse and Mental Health distributes federal substance use treatment grant funds and contracts for community prevention, treatment and recovery services. A February 2025 DPSQA advisory memo describes OSAMH and DPSQA working together and says the state plans to amend the January 2020 licensure standards.
• The rules still say OADAP. Part 433 keeps the older "Office of Alcohol and Drug Abuse Prevention" wording. When the rule says OADAP, read it as "DHS"; when you file, follow DPSQA's current instructions.
• Medicaid is a separate door. Licensure doesn't enroll you in Arkansas Medicaid. Medicaid's behavioral health manuals add their own site licensing and certification steps, covered below.

The rules to read

Rule or document	What it covers
20 CAR Part 433	The licensure standards in the Code of Arkansas Rules: who must be licensed, procedures, program standards and the opioid treatment section (433-323)
20 CAR 433-102	Procedures for licensure, including the $75 application fee, the $1,500 licensure review fee and the $75 annual renewal
20 CAR 433-206	Licensure for programs accredited by CARF, The Joint Commission or COA
DHS licensure standards (PDF)	The same standards as a single DHS document, easier to work through section by section
Medicaid counseling services manual	Outpatient behavioral health counseling services, including intensive outpatient substance abuse treatment (H0015), provider licensing and who may serve whom

Our launch package builds the policy manual as a crosswalk: every requirement in Part 433, the Medicaid manual's IOP rules and your accreditor's standards matched to a policy, form or record. DPSQA's review and an accreditor's survey both start from that kind of map, and it's the same approach as our policy and procedure manual service in Texas.

The license, step by step

From 20 CAR 433-102 and the DHS standards:

Item	The rule	Our notes
Who needs it	Any individual, partnership, association or corporation operating or seeking to operate a substance abuse treatment program in Arkansas	Calling it "counseling" doesn't avoid it if you hold yourself out as treatment
Application	Completed by every program seeking licensure before the initial on-site review, with a $75 nonrefundable application fee	Have the policy manual, client handbook and staff files done before you file; the on-site review checks them
Licensure review fee	$1,500, nonrefundable, for first-time applicants; the formal license issues only when it's paid	Budget $1,575 in state fees before the first admission
Term	One-year or three-year license, only if the program complies with all applicable standards	Treat the first review as the one that sets your term
Renewal	$75 a year, billed by the state to every licensed program	Put the bill and the license end date on the calendar

Fees are as published in the Code of Arkansas Rules in October 2026; confirm them with DPSQA before you pay. Want the license work done for you? It's part of the program launch package, or $7,500 on its own as our state facility license application service. Our guide to what it costs to start an IOP shows where the state fees sit next to rent and payroll.

The accreditation shortcut

Arkansas is one of the states where national accreditation does most of the license work. 20 CAR 433-206 says a program that meets the alcohol and drug abuse treatment standards of CARF, The Joint Commission or COA automatically receives licensure, as long as it also meets specified state areas, such as treatment plan development and physical plant requirements. DHS awards the license on evidence of accreditation plus its own staff's verification of those items. The section doesn't apply to methadone programs.

• It doesn't skip the state. You still apply, and DHS still checks the listed areas on site. What you skip is a full review against every standard.
• It doesn't come first for most new programs. Accreditors generally want to see the program running and charts to review before a decision, so many new programs open on the state license and add accreditation later. Our guide to accreditation for a new program explains the order, and Joint Commission vs. CARF helps you pick.
• It helps with contracts. DHS procurements for state-funded treatment have required TJC, CARF or COA accreditation, and commercial plans often ask for it too. If you plan to be accredited within a year, build the policy manual to both Part 433 and the accreditor's standards from day one.

Our Program Launch + Accreditation ($54,500) carries the project from the state license through the accreditation survey, with a mock survey before the real one.

Counselors and staffing

• Alcohol and drug counselors. The Arkansas State Board of Examiners of Alcoholism and Drug Abuse Counselors, under the Arkansas Department of Health, issues two licenses: the Licensed Alcoholism and Drug Abuse Counselor (LADAC), for applicants with a master's degree in the health or behavioral sciences or another appropriate field from an accredited school, and the bachelor's-level Licensed Associate Alcoholism and Drug Abuse Counselor (LAADAC). The board's application checklist lists supervised work experience, ethics hours, a national exam, references and a fee; check its current version for the numbers.
• Scope limits that affect billing. Arkansas Medicaid's counseling services manual lets licensed practitioners deliver substance use services within their scope of practice, but a provider licensed only as a LADAC or LAADAC may serve only people whose primary diagnosis is a substance use disorder. Plan at least one licensed mental health clinician (an LPC, LCSW, psychologist or prescriber) who can diagnose and treat co-occurring conditions.
• The licensure standards' personnel rules. Part 433 sets the state's own expectations for program staff, supervision and personnel records. Write job descriptions for every role on your org chart, filled or not, and match each to the standard.
• Every hire gets checked against the federal OIG exclusion list; ask DPSQA which state background checks it requires for your program type.

We build personnel files from our staff credential file checklist and add each state's items. In Arkansas that means tracking each counselor's LADAC or LAADAC, the clinician licenses that let you serve co-occurring clients, and every renewal date.

Arkansas Medicaid and the PASSEs

• What Medicaid calls IOP. The counseling services manual covers intensive outpatient substance abuse treatment under H0015, delivered on an individualized treatment plan, with the program operating at least 3 hours a day and at least 3 days a week. Build your schedule to that floor; our IOP schedule template shows a week that clears it.
• Licensed sites first. The same manual requires behavioral health agency sites to hold a DPSQA license before they provide substance abuse services, and Medicaid's IOP service must be delivered at a site DPSQA has licensed for it. Get the license, then the Medicaid enrollment and certification, in that order.
• The PASSEs. Members with complex behavioral health needs or developmental disabilities who are assessed at Tier 2 or higher on the state's Independent Assessment are enrolled in a Provider-Led Arkansas Shared Savings Entity (PASSE). DHS lists four: Arkansas Total Care, CareSource PASSE, Empower Healthcare Solutions and Summit Community Care. Each credentials and contracts on its own; DHS's page for PASSE providers links each one.
• Everyone else. Medicaid members who aren't in a PASSE, including adults in the ARHOME expansion group, may be covered a different way; check eligibility before every admission to see which payer you bill.
• Medicare pays for IOP and PHP only through hospitals, community mental health centers and a few other provider types, so most freestanding programs plan without it (CMS 2024 outpatient rule).

Our credentialing service handles Medicaid enrollment, PASSE credentialing and commercial facility contracts in any state; Medicaid enrollment is $500 per clinician. Before every admission, verify benefits and authorization; the prior authorization guide covers what plans ask for, and our guide to per diem billing for an IOP explains how an H0015 day is billed.

Referrals and kickbacks

We didn't find an Arkansas statute written specifically against patient brokering for addiction treatment, the way Florida, Texas or West Virginia have one. That doesn't leave a gap. Arkansas's Medicaid fraud law, Ark. Code 5-55-111, makes it a crime to knowingly solicit or accept anything of value for referring Medicaid-reimbursable services, or to offer or pay it to induce a referral, with penalties that rise with the amount involved, and a civil version sits in Ark. Code 20-77-902 (see the Lowenstein Sandler state anti-kickback chart). The federal Eliminating Kickbacks in Recovery Act (18 U.S.C. 220) covers referrals to treatment facilities and recovery homes paid by any payer, commercial included, and the federal Anti-Kickback Statute covers Medicaid and Medicare. In practice: pay marketers a salary, never per admission, don't pay sober homes or interventionists for clients, and run any referral relationship past your attorney. Our guides to patient brokering laws and marketing a treatment center explain where the lines are.

The steps, in order

1. Define the program: intensive outpatient alone or with outpatient and PHP, adults or adolescents, whether you'll offer MAT on site, and whether you'll pursue accreditation in year one.
2. Form the business with the Arkansas Secretary of State, get the EIN and the organization NPI, and line up a health-care attorney and CPA.
3. Lock the site: local zoning, a certificate of occupancy and fire inspection, and a layout with group rooms, private offices and locked records. Our IOP opening checklist has the full list.
4. Write the policy manual from Part 433 and the Medicaid manual's IOP rules, plus 42 CFR Part 2 and HIPAA, and, if you'll be accredited, the accreditor's standards.
5. Hire the clinical staff: LADAC or LAADAC counselors and at least one licensed mental health clinician, each checked against the OIG list.
6. Apply to DHS through DPSQA with the $75 application fee, pass the on-site review, and pay the $1,500 licensure review fee so the license issues.
7. Set up the EHR before the review: Cima's IOP and PHP plan keeps levels of care, group notes with each member's entry, attendance against the 3-hour, 3-day floor and authorizations in one place.
8. Enroll with Arkansas Medicaid and contract with the PASSEs and the commercial plans your clients carry.
9. Pursue accreditation if it's in the plan, then use 20 CAR 433-206 at renewal.
10. Audit and renew: run your own chart audits with the chart audit checklist and keep the $75 renewal and every staff license on the compliance calendar.

Questions

Do you need a license to open an outpatient rehab in Arkansas?

Yes. Anyone operating or seeking to operate a substance abuse treatment program in Arkansas needs a license under the Licensure Standards for Substance Abuse Treatment Programs (20 CAR Part 433). DHS's Division of Provider Services and Quality Assurance issues and surveys it.

How much does an Arkansas substance abuse treatment program license cost?

Under 20 CAR 433-102, a first-time applicant pays a $75 nonrefundable application fee and a $1,500 nonrefundable licensure review fee, and every licensed program pays a $75 renewal fee each year. Confirm current fees with DPSQA before you file.

Does accreditation replace the Arkansas license?

Almost. A program accredited by CARF, The Joint Commission or COA for alcohol and drug treatment automatically receives the state license once DHS verifies certain state items, such as treatment plan development and the physical plant (20 CAR 433-206). It doesn't apply to methadone programs, and you still apply.

How many hours is an IOP in Arkansas?

For Arkansas Medicaid, intensive outpatient substance abuse treatment (H0015) means a program operating at least 3 hours a day and at least 3 days a week, on an individualized treatment plan. Commercial plans set their own criteria, usually in the same range.

What is a PASSE in Arkansas?

A Provider-Led Arkansas Shared Savings Entity: Arkansas Medicaid's managed care model for members with complex behavioral health needs or developmental disabilities, assessed at Tier 2 or higher. DHS lists four: Arkansas Total Care, CareSource PASSE, Empower Healthcare Solutions and Summit Community Care.

Who licenses alcohol and drug counselors in Arkansas?

The Arkansas State Board of Examiners of Alcoholism and Drug Abuse Counselors, under the Arkansas Department of Health. It issues the master's-level LADAC and the bachelor's-level LAADAC.

Can a Texas company help with an Arkansas program?

Yes, if it's honest about how. We run a Texas program, so in Arkansas we work from Part 433, the Medicaid manuals and the PASSEs' policies, check each against the current text, and tell you where DPSQA, OSAMH, the plans or your attorney has the final word. We don't guarantee a license, contract or date.

Planning to use the accreditation route? Program Launch + Accreditation is $54,500. Or book a free 30-minute call and we'll walk through what Arkansas will ask of you.

Cima Consulting isn't a law firm or an accounting firm. Arkansas agencies make their own decisions; we don't guarantee approvals, rates or dates. Never pay or accept anything of value for patient referrals: Arkansas's Medicaid fraud law and federal law (EKRA and the Anti-Kickback Statute) both apply.

Sources

• Licensure rule: 20 CAR Part 433 (Code of Arkansas Rules); 20 CAR 433-102, procedures and fees; 20 CAR 433-206, accredited programs; DHS licensure standards (PDF)
• Agencies: About DPSQA; DPSQA, how to become a provider; About OSAMH; DPSQA advisory memo (February 2025)
• Medicaid: Outpatient behavioral health counseling services manual; PASSE program; For PASSE providers; PASSE provider agreement (2023)
• Counselors: Board of Examiners of Alcoholism and Drug Abuse Counselors, licensure; board application checklist
• Kickbacks: Lowenstein Sandler, state health care anti-kickback analogues (June 2023); EKRA, 18 U.S.C. 220: Cornell LII
• OIG exclusions: oig.hhs.gov; CMS, CY 2024 outpatient rule: cms.gov

Comparing states? See Texas and our guides for Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia and Wisconsin, or how to start an IOP for what every state has in common.