Requirements for Opening an Addiction Treatment Center

Along with any type of business, opening an addiction recovery center requires detailed planning. Besides figuring out the financial and marketing aspects, you’ll also need to look into the legal requirements when opening an addiction recovery center. Owning and operating an addiction recovery center can be rewarding—not only are you helping a vulnerable population, you’re also earning a profit from the endeavor. According to the Substance Abuse and Mental Health Services Administration, annual revenue for addiction treatment is upwards of $35 billion annually with an estimated 14,000 treatment centers currently in operation.

Financial Planning

A cost analysis will need to be conducted in the early stages of planning. Certain factors will greatly affect the overall cost of your facility. This includes the location of the center, the size of the facility, and the types of addiction services offered. For instance, an inpatient center in an urban area is likely to cost significantly more than an outpatient facility in a rural location.

Zoning Regulations

Before choosing the location of your addiction recovery center, you must look up local and state laws. As an example, in some states you can’t operate a facility that administers methadone within 500 feet of a school.  In many states, you must be zoned to perform medical services as well. This means if you are looking to open a residential treatment facility, you should understand what needs to be done. 

Staffing Requirements

Hire reliable and trained personnel to run all operations. Recovery centers employ licensed therapists, psychiatrists and medical staff to assist with all levels of care amongst patients. Clerical staff is also needed to manage day-to-day schedules and billing duties. Intake staff will handle inbound leads and can also act as case managers. Finally, you need team members to assist with janitorial tasks and building maintenance.


A Certificate of Need or CON is required before any type of rehabilitation facility can operate. The Office of Health Care Access gives the CON after the administration determines the facility is needed. The first step to receive a CON is writing a Letter of Intent. Within the letter, you must provide the scope of the project, location, and projected budget. Within 15 days, the Office of Health Care Access will grant public notice status and allow you between 60 and 120 days to submit a finalized application. The application will require you to provide more detailed information about your planned facility. The Office of Health Care Access then has 90 days to deny or approve the planned project.


An addiction recovery center has strict licensing requirements to ensure your facility is providing services in a controlled and safe environment. A license from the Department of Public Health will be needed to prove that your facility is in compliance with state and federal laws. As part of the application process, you’ll need to provide proof of the following:

  • Zoning board compliance
  • Fire marshal certification
  • Proof of ownership
  • Proof of liability insurance
  • Organizational charts and names of current staff members
  • Description of planned services

Licensure is one of the most time consuming pieces of opening a treatment center.  Mainly, this is due to applicants not filling out the 30+ page licensure document correctly.  Which, if this is the case, requires you to start all over again in the process. Making this 180 day process extended upwards to 365 days. This process is often when our treatment consultants come in to help.  You can read more about our licensure consulting here.

Addiction recovery centers are subject to regular inspections to make sure the facility is following all medical and drug administration procedures. As a business owner, you must be thorough even after opening the business to stay in compliance.