Kentucky's Alcohol and Other Drug Entity License

Kentucky licenses outpatient and residential substance use treatment programs as nonhospital-based alcohol and other drug treatment entities, or AODEs. The Cabinet for Health and Family Services administers the license under 908 KAR 1:370, and 908 KAR 1:374 adds standards for specific services: intensive outpatient, partial hospitalization, office-based opioid treatment and narcotic treatment programs. Kentucky's rules are detailed, and several of its deadlines are measured in days, not months.

Who needs an AODE license?

Any person, organization, corporation, community mental health center or driving under the influence program planning to operate an outpatient or residential AODE must apply, unless exempt (908 KAR 1:370, Section 2(1)). Exempt settings include voluntary self-help organizations, licensed chemical dependency treatment services exempt under KRS 222.231(1), federal agencies, federally certified rural health clinics and federally qualified health centers serving behavioral health patients, a practitioner's private office or clinic, certain licensed psychiatric residential treatment facilities serving people 21 or younger, and licensed residential crisis stabilization units (Section 2(2)).

An AODE "shall not admit clients until the program has obtained a license from the cabinet to operate the specific modality or modalities of treatment referenced on its application" (Section 2(3)), and operating a private facility without the license exposes the entity to penalties under KRS 222.990(2).

How much does the license cost, and how often?

The application carries a $500 licensure fee plus $80 for each outpatient extension site that is separate from the parent facility and not located in a school or other community-based setting the AODE does not operate (Section 2(1)). Once licensed, the AODE renews every year with the same application and the same fees (Section 2(5)).

Extension sites are not allowed for every service. Residential AODE programs, office-based opioid treatment facilities that are not physician-owned, and narcotic treatment programs may not operate extension sites (Section 2(6)). Each of those locations needs its own license.

How do Kentucky surveys work?

Every outpatient or residential AODE is subject to an annual survey visit, and survey visits and complaint investigations are unannounced (Section 3(3)-(4)). For an AODE operating a narcotic treatment program, unannounced monitoring visits may occur together with federal officials from SAMHSA's Center for Substance Abuse Treatment and the DEA (Section 3(6)). Denying, delaying or obstructing a cabinet inspector's access to the facility or relevant records results in disciplinary action, up to revocation (Section 3(7)).

When a survey finds a violation, the AODE has 10 calendar days from the notice to submit a written plan of correction signed by the administrator, the licensee or the licensee's designee, stating the correction date, the specific corrective measures and how recurrence will be prevented (Section 5). An unacceptable plan gets one more 10-day round before the cabinet can deny, suspend or revoke.

What do the IOP and PHP standards require?

For intensive outpatient services, 908 KAR 1:374, Section 4 sets a minimum of 9 hours per week over no fewer than 3 days for adults, or 6 hours over 2 days for adolescents. The program must keep a patient-to-staff ratio of no more than 10 to 1, offer individual, group and family therapy, crisis intervention and psycho-education, and provide access to a board-certified or board-eligible psychiatrist for consultation, which may be by telehealth.

Partial hospitalization has a higher bar. An outpatient AODE offering it must be fully accredited by The Joint Commission, CARF, the Council on Accreditation or another national accreditor with comparable standards, and the services must average 4 to 6 weeks, run at least 5 hours a day and at least 4 days a week, and give adolescent patients access to educational services (Section 5). A Kentucky PHP therefore cannot open until accreditation is in hand. Our guide to licensing outpatient, IOP and PHP programs compares other states.

When does an office-based opioid treatment practice need an AODE license?

Kentucky licenses some buprenorphine practices as AODEs. Excluding methadone-based treatment, a facility must be licensed as an outpatient AODE providing office-based opioid treatment if anyone with an ownership interest is not a Kentucky-licensed physician and the facility employs or is affiliated with a prescriber who prescribes FDA-approved medications for opioid use disorder to 50 percent or more of its patients (908 KAR 1:374, Section 6(1)). These facilities need a medical director who is physically present at least 25 percent of the hours the facility is open, reviews 10 percent of current patient charts monthly, and directs no more than three such facilities.

What must you report, and how fast?

908 KAR 1:370, Section 4 sets the change rules:

• Name change: written notice within 10 calendar days and a $25 processing fee.
• Location change: no move, including moving an extension site, until a licensure application and an $80 processing fee are filed.
• Change of ownership: the new owner files a license application with the $500 fee within 10 calendar days. Acquiring more than 25 percent of the AODE, or of a corporation's stock or voting rights, counts.
• Closure: written notice within 10 calendar days.

Section 4 also bars anyone from acquiring a significant financial interest in an AODE if they previously held one in a licensed facility whose license was denied, suspended, revoked or relinquished within the preceding seven years after an investigation or action involving risk of death or serious harm. Run that check on every investor before closing; see buying a treatment program.

Can we prepare a Kentucky AODE file?

We prepare the AODE application for each modality, write policies to 908 KAR 1:370 and 1:374, prepare you for the unannounced annual survey, and draft plans of correction inside the 10-day window. For a PHP, our Accreditation Readiness service ($2,995 for the first program) comes first. Your licensee signs and pays the cabinet. The State License package is $1,995 for an outpatient site or $2,995 for residential, $595 for each extension site or added service, and Ownership Change or Relocation is $795. Sources are on the Kentucky page.