Arizona's Behavioral Health Facility License and Its Fees

Arizona does not have a separate substance use licensing statute in the way Texas or Pennsylvania does. Behavioral health facilities are one class of "health care institution," licensed by the Arizona Department of Health Services (ADHS) under the same framework as hospitals and outpatient surgical centers. That has consequences for how the license is written, what it costs and what it forbids.

Which limits come with an Arizona license?

"A person shall not establish, conduct or maintain in this state a health care institution or any class or subclass of health care institution unless that person holds a current and valid license issued by the department specifying the class or subclass" (A.R.S. 36-407(A)). The license is valid only for the class or subclass, "the type of services and, except for emergency admissions as prescribed by the director by rule, the licensed capacity specified by the license." In plain terms, an Arizona license authorizes:

• one class of institution, such as a behavioral health facility;
• the services named on it;
• the licensed capacity on it; and
• the premises it was issued for. "The licensee may not transfer or assign the license. A license is valid only for the premises occupied by the institution at the time of its issuance" (36-407(C)).

Adding a service, adding beds or moving all run back through ADHS, and a sale means a new licensee and a new license.

How much does the license cost?

ADHS fees are in A.A.C. R9-10-106. Every license application carries a $50 application fee (R9-10-106(B)). The licensing fee, paid with the application and then annually, depends on the class and the licensed capacity. For a behavioral health facility (R9-10-106(C)(2)):

• no licensed capacity: $375;
• 1 to 59 beds: $375 plus $94 times the licensed capacity;
• 60 to 99 beds: $750 plus $94 times the licensed capacity;
• 100 to 149 beds: $1,125 plus $94 times the licensed capacity;
• 150 beds or more: $1,875 plus $94 times the licensed capacity.

A behavioral health facility providing observation and stabilization services adds $94 times its licensed occupancy (R9-10-106(C)(3)). Annual fees paid late carry a $250 late payment fee (R9-10-106(F)), and fees are nonrefundable except as state law provides (R9-10-106(G)). If the project involves construction or modification and you submit architectural plans to ADHS, a separate plan review fee of $50 to $150 applies depending on project cost (R9-10-106(A)).

An outpatient program with no licensed beds therefore starts at $425 in state fees ($50 plus $375) and pays $375 a year after that.

What does Arizona prohibit licensees from doing?

Section 36-407 includes several conduct rules that belong in a program's compliance policies:

• A licensee may not imply, by advertising, directory listing or otherwise, that it is authorized to provide more specialized services or a higher degree of care than its license allows (36-407(B)).
• A licensee may not "personally or through an agent offer or imply an offer of rebate or fee splitting" to anyone regulated under Title 32 or Title 36, chapter 17 (36-407(D)).
• A licensee may not advise a patient, directly or through staff, to enroll in or leave a specific insurance plan unless the person advising is a licensed insurance producer, though it may say whether it is in network (36-407(E)).
• The licensee must give each patient an itemized statement of charges (36-407(F)).

The fee-splitting and insurance-advice rules line up with the federal kickback concerns that run through this industry. We keep our own fees flat for the same reason; see EKRA and treatment centers.

Are opioid treatment programs licensed differently in Arizona?

Arizona licenses an outpatient treatment center to provide opioid treatment services. Its governing authority must make sure the center obtains SAMHSA certification before providing opioid treatment, keeps the current SAMHSA certificate on the premises, and names the center's administrator on that certificate as the individual responsible for the opioid treatment services (A.A.C. R9-10-1020). The full federal sequence is on our OTP approval hub.

Do sober living homes need a license in Arizona?

Yes. "A person shall not establish, conduct or maintain in this state a sober living home unless that person holds a current and valid license issued by the department" (A.R.S. 36-2062(E)). The license lasts one year (36-2062(B)), names the maximum number of residents including any live-in manager or staff (36-2062(C)), and cannot be transferred or moved to other premises. A treatment facility licensed to treat substance use disorders that has sober living homes on the same campus must license each one (36-2062(D)).

The statute's standards require written policies on medication-assisted treatment, drug and alcohol testing, discharge planning, a good neighbor policy, resident rights and complaints, money handling, emergency notifications, and maintenance items such as smoke detectors, carbon monoxide detectors and fire extinguishers (36-2062(A)). The home must also keep documentation from the local jurisdiction showing compliance with local zoning, building, fire and licensing rules (36-2062(C)). Arizona's NARR affiliate is the Arizona Recovery Housing Association. More in recovery residence certification: NARR affiliates and state rules.

Can we prepare the ADHS application?

We prepare the ADHS application for the right class and capacity, write policies to the behavioral health facility rules, prepare the premises for ADHS review, and handle the annual fee date so the $250 late fee never applies. Your owner or officer signs and pays ADHS. The State License package is $1,995 for an outpatient site or $2,995 for a residential site, and Recovery Residence Certification preparation is $795 for the first house and $295 for each added house; the operator applies and pays ADHS. Sources are on the Arizona page.