How to start an IOP in Pennsylvania: the DDAP license, staffing rules and the steps

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. This guide is that check for Pennsylvania, 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 from the Pennsylvania Code or DDAP's publications, we left it out or told you who to ask.

Comparing states? Read how to start an IOP or PHP in Texas and the basics every state shares in how to start an IOP, or the guides for Ohio, New Jersey and Massachusetts.

Pennsylvania at a glance

Question	Pennsylvania's answer
Who licenses an outpatient SUD program	The Department of Drug and Alcohol Programs (DDAP)
Rules	28 Pa. Code chapter 704 (staffing), chapter 705 (physical plant) and chapter 709 (standards for licensure of freestanding treatment facilities)
What an IOP gets	A drug and alcohol facility license for the site, listing the approved activities; IOP is ASAM Level 2.1; chapter 709 has outpatient (subchapter I) and partial hospitalization (subchapter H) standards but no separate IOP subchapter
How you start	Email the Request for Licensing Application Packet form (DDAP-EFM-5075) to DDAP
License term	One year from issuance, per DDAP's training materials
Counselor ratios	Partial hospitalization: at least 1 FTE counselor per 10 clients. Outpatient: no more than 35 active clients per FTE counselor caseload (28 Pa. Code 704.12)
Level of care criteria	All licensed drug and alcohol treatment facilities must align with the ASAM Criteria
Medicaid	Medical Assistance behavioral health runs through HealthChoices behavioral health MCOs assigned by county; Single County Authorities fund many uninsured clients

The DDAP license

DDAP's licensing page says persons, partnerships, corporations and other legal entities that provide drug and alcohol services must be licensed as a drug and alcohol facility, and lists outpatient and partial hospitalization among the settings that need one. Three features shape your plan:

• It's per site. Chapter 709 defines a facility as the physical location from which drug and alcohol services are provided (28 Pa. Code 709.1). A second office is a second licensed site, applied for through the same packet request.
• It's per activity. The license lists what you're approved to do there. Adding partial hospitalization to an outpatient license later is another request to DDAP, so decide your levels before you apply. Our guide to adding a level of care covers the payer side.
• It runs a year. DDAP's on-site review training cites 28 Pa. Code 709.11 for the application and says the license expires one year from issuance. Expect an annual inspection cycle, and keep your binder inspection-ready all year.

Changes such as a new owner, address, name or activity are reported through DDAP's facility change process, not by email to your inspector. DDAP has also announced a program to license telehealth drug and alcohol treatment providers; if you'll offer virtual IOP, ask DDAP how it applies. DDAP also licenses recovery houses; see how to start a sober living home if you're planning housing alongside the IOP, and keep the two strictly separate.

The rules to read

Rule	What it covers
28 Pa. Code chapter 704	Staffing: positions, qualifications (704.7 for counselors), ratios (704.12), supervision and training
28 Pa. Code chapter 705	Physical plant standards for the building
28 Pa. Code chapter 709, subchapters A to C	General provisions, licensing procedures (subchapter B) and general standards for every activity (709.21)
Chapter 709, subchapter H	Partial hospitalization; treatment plans reviewed at least every 30 days (709.82)
Chapter 709, subchapter I	Outpatient; treatment plans reviewed at least every 60 days (709.92); hours, aftercare and outreach (709.94)

Chapter 709 has no separate intensive outpatient subchapter. Ask DDAP which subchapter your IOP's schedule falls under, and build your treatment-plan review interval to match. Read the official Pennsylvania Code text rather than a third-party copy, and read DDAP's licensing alerts, which explain how inspectors apply the rules. Our launch package builds the policy manual as a crosswalk: every requirement in chapters 704, 705 and 709 matched to a policy, form or record, so the inspector can find each one.

Applying and inspections

1. Request the packet. Fill out DDAP's Request for Licensing Application Packet form (DDAP-EFM-5075, revised August 2024), choosing the activities you'll provide, and email it to [email protected]. The same form covers a new site or a new activity at a licensed facility.
2. DDAP replies with the application. DDAP contacts you with next steps, including the administrative forms, the application and an application checklist. Build your binder in the checklist's order.
3. The initial inspection. DDAP licensing staff schedule the initial licensure inspection in advance, as Bucks County's summary of the DDAP process describes, and DDAP sends notice of later on-site inspections electronically.

Fees: we couldn't find a published DDAP license fee. Ask when you request the packet, and budget the bigger items (rent during licensing, build-out, staff) from what it costs to start an IOP.

Levels of care and ASAM alignment

DDAP's ASAM resources page says all licensed drug and alcohol treatment facilities must align with the ASAM Criteria, and Pennsylvania adopted the third edition (2013). County materials list Level 1 outpatient and Level 2.1 intensive outpatient among Pennsylvania's levels of care. If you'll take clients funded by a Single County Authority (SCA) or a HealthChoices MCO, expect an ambulatory ASAM alignment review: DDAP's webinar on ambulatory alignment reviews under the SUD 1115 waiver says alignment is required of providers funded through SCAs or MCOs. Build the schedule, staffing and service mix to the ASAM Level 2.1 description from the start; retrofitting after a review is harder. For how the levels differ, see IOP vs. PHP vs. outpatient; for a weekly schedule, IOP and PHP schedule templates.

Counselors, qualifications and ratios

Pennsylvania doesn't require counselors in a licensed facility to hold one specific addiction license. Instead, 28 Pa. Code 704.7 sets the qualifications for the counselor position, including:

Path	What 704.7 asks
Physician	A license to practice medicine
Master's degree	A master's in a related field, with a practicum
Bachelor's degree	Plus one year (1,820 hours) of clinical experience
Associate degree	Plus two years (3,640 hours) of clinical experience

Where the experience wasn't in a drug and alcohol setting, the rule requires a written training plan for chemical dependency competency. Act 66 of 2023 added flexibilities, including counting CRNPs, physician assistants and some degree holders without prior clinical experience; ask DDAP which are in effect before you rely on them.

Ratios drive payroll. Under 28 Pa. Code 704.12, partial hospitalization needs at least one full-time-equivalent counselor doing direct counseling for every 10 clients, and an outpatient counselor may carry no more than 35 active clients per FTE, counting every client during primary care hours. Worked example: a PHP track with 20 clients needs at least 2 FTE counselors on direct counseling; an outpatient caseload of 70 active clients needs at least 2 FTE counselors. Check DDAP's licensing alerts on how time is counted, and ask what ratio DDAP applies to your IOP schedule.

Credentials on top. The Pennsylvania Certification Board issues addiction credentials such as the CADC and CAADC; licensed professional counselors, social workers and marriage and family therapists are licensed by the state's professional boards. Payers often ask for credentials or licenses beyond 704.7, so check each plan's requirements before you hire. Verify every license or certification with the issuing body, and check every hire and owner against the federal OIG exclusion list. Our staff credential file checklist lists what goes in each file.

Site, zoning and fire

• Zoning is local. Philadelphia, Pittsburgh and every borough and township have their own zoning. Ask in writing whether an outpatient drug and alcohol treatment facility is allowed at the address, and lease with a way out if zoning, occupancy or the license falls through.
• Building and fire. Get the certificate of occupancy from the local code authority, and read chapter 705's physical plant standards before you design the space; ask DDAP what building documentation it wants with the application.
• Plan group rooms, private offices for assessments, locked records and, if you'll test on site, a private collection area and a CLIA certificate of waiver. Our IOP opening checklist has the full list.

Medical Assistance, HealthChoices and the counties

• License first. Under 55 Pa. Code 1223.41, outpatient drug and alcohol clinics must be licensed, fully or provisionally, as outpatient drug and alcohol facilities and stay licensed to remain eligible for Medical Assistance payment.
• HealthChoices is county-based. Medical Assistance behavioral health is managed by the behavioral health MCO assigned to the member's county. The Department of Human Services' HealthChoices BH-MCO list shows Community Behavioral Health for Philadelphia, Community Care Behavioral Health for many counties including Allegheny, Berks, Erie, Lackawanna, Luzerne and York, Magellan for counties including Bucks, Lehigh, Montgomery and Northampton, PerformCare for counties including Dauphin, Cumberland and Lancaster, and Carelon for counties including Beaver, Butler, Washington and Westmoreland. Where you open decides which plan you must contract with.
• Single County Authorities. SCAs fund treatment for many uninsured and underinsured residents and set their own contracting. Meet the SCA for your county early; DDAP ties ASAM alignment reviews to SCA and MCO funding.
• Medicare: as in Texas, 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, plan credentialing and facility contracts in any state, and getting insurance contracts for an IOP explains the facility packet commercial plans ask for. Before you admit anyone, verify benefits and authorization; the VOB checklist and behavioral health carve-outs guide explain why the plan on the card isn't always the plan that authorizes treatment.

Does accreditation count?

We found nothing in chapters 704, 705 or 709 that accepts a Joint Commission or CARF survey in place of the DDAP license or its inspection, so plan on both. Payers are why you'd accredit: TRICARE requires IOP and PHP programs to be accredited, and many commercial plans contract only with accredited programs. Joint Commission vs. CARF compares the two, and Program Launch + Accreditation carries the work through the survey. Our sister product's CARF survey prep shows what surveyors look at.

The steps, in order

1. Define the program: activities (outpatient, IOP at ASAM 2.1, partial hospitalization), adults or adolescents, hours, and the counties you'll serve.
2. Form the business with the Pennsylvania Department of State, get the EIN and the organization NPI, and line up a health-care attorney and CPA.
3. Find a site the municipality will approve and that can meet chapter 705, and lease it with a way out.
4. Email DDAP the packet request for the activities you'll provide, and work the checklist DDAP sends back.
5. Write the policy manual crosswalked to chapters 704, 705 and 709 and to ASAM Level 2.1, plus 42 CFR Part 2 and HIPAA.
6. Hire to 704.7 and staff to 704.12, and build each personnel file with degrees, experience hours and training plans.
7. Finish the build-out and get the certificate of occupancy.
8. Pass the initial DDAP inspection with one binder: the building, the policies, the staff files. Set up the EHR before the inspection too: Cima's IOP and PHP plan tracks treatment-plan review dates, group notes, attendance and authorizations in one place.
9. Once licensed, enroll with Medical Assistance, contract with your county's BH-MCO and SCA, and credential with commercial payers.
10. Open, prepare for ASAM alignment review, then accredit, and renew the license every year on schedule with the compliance calendar.

Questions

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

Yes. DDAP says any person or entity providing drug and alcohol services must be licensed as a drug and alcohol facility. The license is for a physical location and lists the activities you're approved to provide there. You start by emailing DDAP the Request for Licensing Application Packet form.

How long is a DDAP license good for?

DDAP's training materials say the license expires one year from the date it's issued, so plan on yearly renewal and inspection.

What are the counselor-to-client ratios in Pennsylvania?

Under 28 Pa. Code 704.12, partial hospitalization needs at least one full-time-equivalent counselor for every 10 clients, and an outpatient counselor may carry no more than 35 active clients. Ask DDAP how it applies the ratios to an intensive outpatient schedule.

Does a counselor need a CADC to work in a Pennsylvania IOP?

Not under the licensing rule itself: 28 Pa. Code 704.7 sets degree-and-experience paths (and Act 66 of 2023 added flexibilities). Payers may require more, and supervisors have their own qualifications, so check both before you hire.

Which Medicaid plan will my Pennsylvania IOP bill?

The HealthChoices behavioral health MCO assigned to your clients' county, such as Community Behavioral Health in Philadelphia or Community Care in Allegheny County. You must be DDAP-licensed to enroll in Medical Assistance.

Can a Texas company help with a Pennsylvania program?

Yes, if it's honest about how. We run a Texas program, so in Pennsylvania we work from the Pennsylvania Code and DDAP's guidance, check each against the current text, and tell you where DDAP, the county or your attorney has the final word. We don't guarantee a license, contract or date.

Just need the state application? It's $4,500 on its own. Or book a free 30-minute call and we'll walk through what Pennsylvania will ask of you.

Cima Consulting isn't a law firm or an accounting firm. Pennsylvania 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, and ask your attorney about Pennsylvania's own rules. Our guide to patient brokering laws covers the federal side.

Sources

• DDAP licensing: apply for a license; Request for Licensing Application Packet (DDAP-EFM-5075, rev. 08-2024); report a facility change
• License term and 709.11: DDAP on-site review expectations (February 2024); initial inspection scheduling: Bucks County Drug and Alcohol Commission
• 28 Pa. Code chapter 709 (709.1, 709.21, 709.82, 709.92, 709.94): Pennsylvania Code and Bulletin, Justia
• 28 Pa. Code 704.7 and 704.12: 704.7, 704.12 (Cornell LII); Act 66 of 2023 flexibilities: CBH provider bulletin 24-06
• ASAM alignment: DDAP ASAM resources; DDAP webinar on ambulatory alignment reviews; levels of care: Lancaster County levels of care aligned with ASAM
• Medical Assistance participation: 55 Pa. Code 1223.41; HealthChoices BH-MCOs by county: Pennsylvania DHS
• Telehealth licensing program: Pennsylvania Capital-Star; Pennsylvania Certification Board: pacertboard.org
• CMS, CY 2024 outpatient rule (IOP and PHP in Medicare): cms.gov

Comparing states? See Texas and our guides for Arizona, California, Colorado, Florida, Georgia, Louisiana, Massachusetts, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Tennessee and Utah, or how to start an IOP for what every state has in common.