How to start an IOP in Minnesota: the 245G license, ASAM levels and the fees

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". The work behind it is finding the state's rule and checking it against the agency's current text. This guide is that check for Minnesota, 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 guide for Wisconsin, or how to start an IOP or PHP in Texas and how to start an IOP for what every state shares.

Minnesota at a glance

Question	Minnesota's answer
Who licenses an outpatient SUD program	The Department of Human Services (DHS)
Law	Minn. Stat. chapter 245G (SUD treatment programs) and chapter 245A (human services licensing)
IOP	ASAM Level 2.1 under 254B.19: adults 9 to 19 hours a week of psychosocial treatment services; adolescents 6 or more
Annual license fee	$2,600 (1 to 24 people) up to $20,000 (200 or more), plus $500 per satellite (245A.10, 2025)
Medical Assistance	Nonresidential 245G programs paid by MA had to enroll in the 256B.0759 demonstration by January 1, 2025
Uninsured clients	The Behavioral Health Fund, administered by DHS since July 1, 2026
Counselors	Licensed alcohol and drug counselors (LADC) under chapter 148F, or exempt staff who meet 245G.11's alternative paths

The 245G license

Chapter 245G is Minnesota's SUD treatment licensing law, and it applies to residential and nonresidential programs alike, with sections for co-occurring services, adolescents and opioid treatment. Chapter 245A supplies the licensing procedure: application, background studies, inspections, correction orders and sanctions. A 245G license is a program license; DHS licenses a primary location, and under 245A.10 any satellite sites are licensed with it.

Unlike some states, Minnesota writes most of its SUD program rules into statute rather than an administrative code, so the Revisor of Statutes is where you read them. The statute changes almost every session, and the 2024 and 2025 sessions changed both fees and the ASAM level language, so read the current year's version.

For how intensive outpatient differs from partial hospitalization and standard outpatient, see IOP vs. PHP vs. outpatient.

The statutes to read

Statute	What it covers
Chapter 245G	SUD treatment program licensing: assessment, treatment planning, services, staffing, records, client rights
245G.11	Staff qualifications: treatment director, counselor supervisor, alcohol and drug counselors and others
245A.10	License fees, including the 245G fee schedule and satellites
254B.19	The ASAM levels of care, including Level 2.1 intensive outpatient
254B.0505	Rates for SUD services, including Level 2.1, treatment coordination and peer recovery support
256B.0759	The Medical Assistance SUD demonstration project: provider enrollment and standards

Our launch package builds the policy manual as a crosswalk: every requirement in 245G and the demonstration standards matched to a policy, form or record, so a DHS licensor can find each one.

License fees after 2025

The 245G fee schedule in 245A.10 is an annual, nonrefundable fee based on licensed capacity. The 2025 statute raised it several times over the 2024 amounts:

Licensed capacity	2024 statute	2025 statute
1 to 24 people	$600	$2,600
25 to 49	$800	$3,000
50 to 74	$1,000	$5,000
75 to 99	$1,200	$10,000
100 to 199	$1,400 (100 or more)	$15,000
200 or more	(in the 100+ tier)	$20,000
Each satellite facility	See the 2024 text	$500 a year, licensed with the primary location

Sources: 245A.10 (2025) and 245A.10 (2024). DHS won't issue or reissue a license until the fee is paid.

Worked example. An IOP licensed for 30 clients with one satellite office pays $3,000 plus $500, or $3,500 a year, under the 2025 schedule. Licensed for 24 instead, it pays $2,600 plus $500. Capacity is a real decision now. License for the census you'll reach in the next year or two, not the biggest number the building could hold. The license fee is still smaller than rent and payroll before the first claim pays; what it costs to start an IOP walks through those, and the break-even calculator shows the census that covers them.

ASAM Level 2.1 in state law

Minnesota now defines its SUD levels by ASAM number in statute. Under 254B.19, subdivision 1 (2025), Level 2.1 intensive outpatient means adults receive 9 to 19 hours a week of psychosocial treatment services and adolescents 6 or more. The 2024 version said "skilled treatment services", so check which services count toward the hours under the current wording. Rates for Level 2.1, treatment coordination and peer recovery support are set under 254B.0505, and DHS's SUD billing guidance maps each level to 254B.19 with changes effective July 1 and August 1, 2025.

Build the schedule so every adult can get at least nine hours of the services that count, with attendance and time recorded for each. The IOP schedule template lays out a week and the IOP group curriculum has a starting topic list.

Staff under 245G.11

Role	What 245G.11 requires (current text, summarized)
Treatment director	At least one year of direct service or management experience with people with SUD, plus a bachelor's degree or three years of human services administration or personnel supervision; knowledge of 245G and the child and vulnerable adult laws documented in the personnel file
Alcohol and drug counselor supervisor	Meets the counselor qualifications and has three or more years of individual and group counseling with people with SUD
Alcohol and drug counselor	Licensed under chapter 148F (the LADC, issued by the Board of Behavioral Health and Therapy) or exempt from licensure and meeting an alternative path, such as a bachelor's degree in social work, nursing, sociology, human services or psychology plus set classroom and supervised hours
Staff with temporary permits	245G.11 has its own subdivision for counselors working under a temporary permit; read it before you count them toward coverage

Earlier versions of 245G.11 capped students and licensing candidates at 50 percent of treatment staff; check whether a limit like that is in the current text before you build a staffing plan around interns. Every hire also needs a DHS background study under chapter 245C, and a check against the federal OIG exclusion list. We build personnel files from our staff credential file checklist, with each 245G.11 qualification documented the way a licensor will look for it. For prescribers and MAT, see psychiatric services in an IOP.

Medical Assistance, the demonstration and the BHF

• The demonstration is mandatory for MA payment. Under 256B.0759, nonresidential programs licensed under 245G that receive Medical Assistance payment had to enroll as demonstration project providers by January 1, 2025; a program that doesn't meet the requirement isn't eligible for MA payment. The demonstration standards include formal referral arrangements with step-up and step-down providers, so line those up in writing.
• Managed care. People with Medical Assistance through a state-contracted managed care plan get SUD treatment through their plan, not the Behavioral Health Fund. Plans differ by county, so contract with the plans your clients carry, and confirm each one's authorization rules.
• The Behavioral Health Fund. For people without insurance, or whose insurance doesn't cover the full cost, the Behavioral Health Fund pays for treatment if they meet income limits. On July 1, 2026, DHS took over administration, including eligibility, from counties and Tribes. Approved applicants get 60 consecutive days of eligibility, and payment goes directly to enrolled providers.
• 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 Medical Assistance enrollment, plan credentialing and facility contracts in any state; Medicaid enrollment is $500 per clinician. Getting insurance contracts for an IOP covers the commercial side. Before every admission, verify coverage and authorization; the VOB checklist covers what to ask.

Referrals and marketing

We didn't find a Minnesota statute aimed specifically at paying for SUD referrals, the way Florida and Kentucky have one; the 256B.0759 referral arrangements are about continuity of care, not payment. Federal law applies regardless: the Eliminating Kickbacks in Recovery Act (18 U.S.C. 220) covers treatment facilities whatever the payer, and the Anti-Kickback Statute covers Medical Assistance. Pay marketers a salary, never per admission, and ask your attorney about Minnesota's own fraud laws. See patient brokering laws and marketing a treatment center.

The steps, in order

1. Define the program: Level 2.1, plus Level 1 or 2.5 if you'll offer them, adults or adolescents, and the licensed capacity you'll apply for.
2. Form the business with the Minnesota Secretary of State, get the EIN and the organization NPI, and line up a health-care attorney and CPA.
3. Find a site local zoning allows, and lease it with a way out.
4. Write the policy manual from 245G and the demonstration standards, plus 42 CFR Part 2 and HIPAA.
5. Hire the treatment director, counselor supervisor and counselors who meet 245G.11, and submit each person's DHS background study.
6. Apply to DHS for the 245G license and pay the 245A.10 fee for your capacity and satellites.
7. Set up the EHR before the licensing visit: Cima's IOP and PHP plan keeps levels of care, group notes with each member's entry, attendance and authorizations in one place.
8. Enroll with Medical Assistance and the 256B.0759 demonstration, then with the Behavioral Health Fund, the managed care plans in your counties and commercial payers.
9. Keep it current: annual fees, staff qualifications, drills and chart reviews with the compliance calendar.

Questions

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

Yes. A substance use disorder treatment program needs a license from the Department of Human Services under Minnesota Statutes chapter 245G, with the licensing procedures in chapter 245A.

How much is a 245G license?

Under 245A.10 as of 2025, the annual nonrefundable fee is $2,600 for 1 to 24 people, $3,000 for 25 to 49, $5,000 for 50 to 74, $10,000 for 75 to 99, $15,000 for 100 to 199 and $20,000 for 200 or more, plus $500 for each satellite facility.

How many hours is IOP in Minnesota?

Section 254B.19 defines ASAM Level 2.1 intensive outpatient as 9 to 19 hours a week of psychosocial treatment services for adults and 6 or more hours for adolescents.

What is the 256B.0759 demonstration?

Minnesota's Medical Assistance SUD demonstration project. Nonresidential 245G programs that receive MA payment had to enroll as demonstration providers by January 1, 2025, or lose eligibility for MA payment. Its standards include referral arrangements with step-up and step-down providers.

What is the Behavioral Health Fund?

The state fund that pays for SUD treatment for eligible people without insurance or with insurance that doesn't cover the full cost. DHS took over its administration from counties and Tribes on July 1, 2026. Approved applicants get 60 consecutive days of eligibility, paid to enrolled providers.

Can a Texas company help with a Minnesota program?

Yes, if it's honest about how. We run a Texas program, so in Minnesota we work from 245G, 254B and 256B and DHS's guidance, check each against the current text, and tell you where DHS, the plans or your attorney has the final word. We don't guarantee a license, contract or date.

Want accreditation for commercial contracts too? Program Launch + Accreditation is $54,500. Or book a free 30-minute call and we'll walk through what Minnesota will ask of you.

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

Sources

• License fees: 245A.10 (2025); 245A.10 (2024); current 245A.10
• ASAM levels and rates: 254B.19 (2025); 254B.19 (2024); 254B.0505; DHS SUD billing guidance
• Staff: 245G.11; 245G.11 (2020)
• Demonstration: 256B.0759 (2024)
• Behavioral Health Fund: DHS; DHS SFY2026 eligibility bulletin
• 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, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, 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.