Establish a Mental Health Facility

Purpose: This procedure describes how to obtain a license for facilities that do not require a certificate of need to provide services for the care, treatment, habilitation, or rehabilitation of people who have mental illness, developmental disabilities or substance abuse issues. Clients cannot be served until the facility is licensed by the N.C. Division of Health Service Regulation, Mental Health Licensure and Certification Section.

Certificate of Need (CON) Services: The following services do require a certificate of need and have separate procedures:

Statute and Rule Requirements for Licensure: Mental Health, Developmental Disabilities and Substance Abuse Services (MH/DD/SAS) facilities are licensed by the Division of Health Service Regulation (DHSR) in accordance with North Carolina General Statute 122C-3 (PDF, 32 KB) and rules in Title 10A, Subchapter 27C, 27D, 27E, 27F, 27G, 26B and 26C of the N.C. Administrative Code.

Medicaid Enrollment: Medicaid Enrollment is separate from the licensure process. Some services have requirements in addition to licensure requirements, in order to be reimbursable through Medicaid. Please see the following links for more information:

Our agency does not license Critical Access Behavioral Health Agencies (CABHA), however this service must be endorsed through your Local Management Entity. More information regarding CABHAs can be found on the Division of MH/DD/SAS web site.

Psychiatric Residential Treatment Facilities (PRTF): Follow the procedures below to obtain a license. PRTFs must also adhere to federal regulations (PRTF Federal Regulations 483 Subpart G); see Centers for Medicare and Medicaid Services (CMS) website for additional information.

Outpatient Opioid Treatment Facilities: As per 10A NCAC 27G .3604(d) each facility must be approved on a preliminary basis by the North Carolina State Opioid Treatment Authority (SOTA) within the Division of MH/DD/SAS prior to submitting an initial licensure application. Please contact Spencer Clark at the NC SOTA for preliminary program approval prior to beginning the application process below.

Contacts: For questions regarding any part of this process, please contact the appropriate section of the N.C. Department of Health and Human Services:

Mental Health Licensure and Certification Section 919-855-3795
Communications and Training, Division of Mental Health,
Developmental Disabilities, and Substance Abuse
919-733-7011
Construction Section 919-855-3893

Procedure Summary: In order to open a facility that does not require a certificate of need for the care, treatment, habilitation, or rehabilitation of people who have mental illness, developmentally disabilities, or substance abuse issues, an applicant must apply for and obtain a license. An applicant must be able to complete all necessary requirements within six months from the initial application date to obtain a license. After initial licensure, the facility must have the license renewed every year. The facility must have the license renewed every year.

Procedures:

  1. Obtain necessary documents: Communications and Training, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (MH/DD/SAS)
    1. The applicant may download essential publications free of charge from the website. Printed copies of the publications may be purchased for a fee from the Division of MH/DD/SAS Communications and Trainings Branch. These publications are essential in formulating the required operations and management policies, guidelines and procedures. The required publications are listed below:
  2. Apply for a license: Mental Health Licensure and Certification Section (MHL&C)
    1. An application (PDF, 283 KB) may be downloaded and printed (cannot be completed on line) from this web page or from the Forms and Applications page. You may also request a hard copy from the Mental Health Licensure and Certification Section.
    2. A separate license is required for each facility that is maintained on a separate site, even if the site is under the same ownership or management.
    3. Applicants complete the application.
    4. Take the completed application to your local zoning office to obtain zoning approval. Attach zoning approval letter to the application.
    5. Residential Facilities:  Take the completed application to your catchment area Local Management Entity (LME) office and obtain a Letter of Support as per Session Law 2005-276 (PDF, 1.43 MB). Attach LME support letter to the application. *Note: This step is not needed for Day Programs.
    6. Write a cover letter briefly describing the services to be offered by the facility.
    7. Submit items required by DHSR Construction Section listed below.
      For 24 hour Residential Programs – Existing Structures
      • A floor plan that specifies:
        1. all levels including basements and upstairs;
        2. identification of the use of all rooms/spaces;
        3. dimensions of all bedrooms, excluding any toilets, bathing areas and closets – clarify double or single occupancy;
        4. location of all doors and dimensions of all exterior doors;
        5. location of all windows including the dimensions of all bedroom windows and sill height of bedroom windows above the finished floor;
        6. location of all smoke detectors noting whether they are battery operated, wired into the house current with battery backup and if they are interconnected.
      • Exterior photos of each side of the building.
      • Interior photos of the kitchen, living areas, bedrooms and any other rooms.
      • Directions from Raleigh or a map from the nearest major highway, street or intersection clearly showing the location of the facility.
      • Local Zoning Department approval for the proposed use.

      For Day Programs
      • A floor plan of the entire building or floor within the building of the space to be licensed that specifies:
        1. identification and dimensions of rooms to be licensed;
        2. exits from the licensed space and building;
        3. toilet areas and other required support spaces.
      • Exterior photos of each side of the building.
      • Interior photos of the proposed licensed space.
      • Directions from Raleigh or a map from the nearest major highway, street or intersection clearly showing the location of the facility.
      • Local zoning department approval or verification the facility is classified under building/planning for intended use.
      • Current local Fire Marshal's Inspection Report for the building.
      • Current local Sanitation Inspection Report if serving any food.
      • If new construction, the local Building Official's approval
      • If existing structure, if this is an existing Business Occupancy building (as classified under the North Carolina State Building Code) and it is only a change of tenant use (for a program that is classified as a "Business Occupancy use") approval from the local Building Official may not be required. Contact your local Building Official and provide them with a copy of your application to verify if your program is classified as a Business Occupancy and if they need to provide any type of documentation. *Note: Any Day Treatment Program for Children and Adolescents cannot be located in a building classified as a Business Occupancy. These programs are required to meet either Group E-Educational Occupancy or Group I-4 – Child Daycare Occupancy under the NCSBC.
       
    8. Include the annual fee upon submitting all items.
    9. Develop written policies and procedures for your services/programs based on N.C. Administrative Code rule. *Note: Do not submit the policies and procedures with the application as they will be reviewed at a later date.
    10. Residential Facilities: the MHL&C Section will forward the application to the Construction Section for their review and approval.

      Day Programs: the application is forwarded to the MHL&C Section consultant to process application (skip to step 6).
  3. Obtain Construction Approval: Construction Section
    1. Facilities that have not been previously licensed as G.S-122C (PDF, 604 KB) facilities require Construction Section approval before a licensed is approved. Prospective facility operators are encouraged to consult with the Construction Section of DHSR prior to purchasing property intended for use as a facility.
    2. Requirements for New Structures
      • Before construction of a new facility the applicant must submit blueprints to the Construction Section.
      • The Construction Section will review blueprints and other information. After review, the Construction Section will provide a written review addressing building code and other licensure requirements. The Construction Section acts as the control point for distribution of plans and specifications to the N.C. Department of Insurance (where applicable). For large facilities, plans are generally reviewed in three stages: schematic, design development and final working drawings.
      • Applicants and their designers work closely with local building officials and fire prevention officials as well as with the Construction Section to ensure the facility is in compliance with building code and licensure requirements.
      • At least two weeks before construction is complete, the applicant sends a letter to the Construction Section requesting a final construction inspection with requested final documentation including local approvals. The facility must be ready with all systems operational and all construction completed by the final construction inspection date. *Note: The Construction Section does not do punch list inspections; punch list inspections are the responsibility of the designer, contractor, and owner.

      Requirements for Existing Structures
      • The MHL&C Section forwards the application to the Construction Section for approval.
      • The Construction Section reviews the information in the application and sends an invoice for the construction survey.
      • The applicant pays the fee for the construction survey. Once the invoice is paid, the Construction Section contacts the applicant to schedule a site inspection visit.
      • The Construction Section conducts a site inspection visit and notes any deficiencies.
      If deficiencies are found, a Statement of Deficiencies is created and mailed to the applicant. The applicant submits a Plan of Correction (POC) to the Construction Section addressing all items. All deficiencies must be corrected prior to the Construction Section’s final approval. *Note: An additional site visit may be required.
    3. When all items are acceptable, the Construction Section notifies the applicant the physical plant has been approved. *Note: This does not mean the facility can admit clients. The facility must still continue the steps to obtain a license by the MHL&C Section.  For new structures the facility must apply for a license (see step 4).
    4. When all items are acceptable, the Construction Section sends the construction approval transmittal form (form 4086) to the MHL&C Section.  *Note: once licensed, the facility must maintain documented evidence of compliance with applicable fire and sanitation codes, including current fire and sanitation inspections.
  4. Obtain the License: Mental Health Licensure and Certification Section (MHL&C)
    1. Residential Facilities: the Construction Section will send the MHL&C Section notification that they have approved the facility. Once the notification is received the MHL&C Section initial licensure consultant contacts the applicant.

      Day Programs: once the MHL&C Section receives a completed application, the MHL&C Section initial licensure consultant contacts the applicant.
    2. The MHL&C Section initial licensure consultant makes an office appointment with the applicant to review the application and determine compliance with all rules and statutes. The written policies and procedures for the services/programs will be reviewed at this appointment. The office appointments are located in Raleigh or Asheville, depending on the county the facility is located.
    3. The MHL&C Section initial licensure consultant conducts an on-site inspection of the facility to determine compliance with all rules and statutes.
    4. All required licensure documents are reviewed for completeness by the MHL&C Section initial licensure consultant. If acceptable, a license shall be issued to the specific premise for types of services indicated on the application.
    5. A license must be renewed every year.