Michigan Office of Administrative Hearings and Rules  
Administrative Rules Division (ARD)  
REGULATORY IMPACT STATEMENT  
and COST-BENEFIT ANALYSIS (RIS)  
AGENCY INFORMATION:  
Department name:  
Licensing and Regulatory Affairs  
Bureau name:  
Bureau of Community and Health Systems  
Name of person filling out RIS:  
Kyle Neff  
Phone number of person filling out RIS:  
517-241-0274  
Email of person filling out RIS:  
RULE SET INFORMATION:  
ARD assigned rule set number:  
2025-31 LR  
Title of proposed rule set:  
Substance Use Disorder Service Program  
COMPARISON OF RULE(S) TO FEDERAL/STATE/ASSOCIATION STANDARDS  
1. Compare the proposed rules to parallel federal rules or standards set by a state or national licensing agency  
or accreditation association, if any exist.  
The regulation of substance use disorder (SUD) service programs is a state function. There are no direct federal rules  
or standards that states must follow. There are ancillary federal regulations administered by the Substance Abuse and  
Mental Health Services Administration (SAMHSA) in the U.S. Department of Health and Human Services that address  
reimbursement and funding, however these responsibilities are handled by the Michigan Department of Health and  
Human Services (MDHHS). The proposed rules do not change this established system.  
A. Are these rules required by state law or federal mandate?  
Section 6234 of the Public Health Code, MCL 333.6234, permits the department to promulgate rules under the  
Administrative Procedures Act for the administration of Part 62. Substance Abuse Services of the Code and for  
the licensing of SUD services programs under Part 62.  
B. If these rules exceed a federal standard, please identify the federal standard or citation, describe why it  
is necessary that the proposed rules exceed the federal standard or law, and specify the costs and  
benefits arising out of the deviation.  
The regulation of SUD service programs is a state function. There are no specific federal standards pertaining  
to the regulation of these programs. Additionally, there are no changes to the relationship between federal and  
state on reimbursement and funding issues.  
2. Compare the proposed rules to standards in similarly situated states, based on geographic location,  
topography, natural resources, commonalities, or economic similarities.  
Deregulation of outpatient counseling programs (which also eliminates need for branch offices):  
Wisconsin and Ohio certify outpatient counseling but do not license outpatient counseling. In Minnesota, Illinois, and  
Indiana, outpatient counseling services are primarily regulated through the licensure of the professional, not the  
facility, unless the provider is billing Medicaid or operating under specific program types.  
MCL 24.245(3)  
RIS-Page 2  
Self-administration of non-SUD medications for individuals with acute and chronic conditions:  
Neighboring states have not removed this barrier to care. However, there are efforts under way in Minnesota though  
no rule has been implemented.  
Remove requirement that an individual in a methadone program has a diagnosis of opioid disorder for at least one  
year prior to admission:  
Illinois, Indiana, and Ohio all use admission criteria that are in line with the Federal regulation (42 C.F.R. 8.12(e)). This  
criteria is based on a clinical assessment used to determine the need for admission rather than a requirement of a  
specific amount of time spent with a diagnosis.  
A. If the rules exceed standards in those states, please explain why and specify the costs and benefits  
arising out of the deviation.  
The proposed rules do not exceed standards in other states.  
3. Identify any laws, rules, and other legal requirements that may duplicate, overlap, or conflict with the  
proposed rules.  
The regulation of SUD services programs is a state function; there are no other laws, rules, or other legal  
requirements that duplicate, overlap, or conflict with the proposed rules. There are ancillary federal regulations  
administered by SAMHSA in the U.S. Department of Health and Human Services that addresses reimbursement and  
funding. However, these responsibilities are handled by MDHHS. The proposed rules do not change this established  
system.  
A. Explain how the rules have been coordinated, to the extent practicable, with other federal, state, and  
local laws applicable to the same activity or subject matter. This section should include a discussion of  
the efforts undertaken by the agency to avoid or minimize duplication.  
The coordination and interplay with other federal, state, and local laws remains the same and consistent in the  
proposed rules as with the existing rules. The proposed rules do comport with, and do not duplicate or conflict  
with federal regulations, Drug Enforcement Agency (DEA) regulations, or ASAM guidelines.  
PURPOSE AND OBJECTIVES OF THE RULE(S)  
4. Identify the behavior and frequency of behavior that the proposed rules are designed to alter.  
The SUD Administrative Rules provide for the regulation of licensed SUD service programs. The prosed changes will  
reduce the entry barrier for a low-risk service, outpatient counseling programs, by removing the duplicative licensure  
requirement and related licensure expenditures. There remains oversight of the counseling professionals through the  
Bureau of Professional Licensing (BPL), The Michigan Certification Board for Addiction Professionals (MCBAP), and  
local Community Mental Health (CMH) authorities.  
The proposed changes allow for increased access to care by removing the requirement that individuals entering  
methadone treatment have a documented opioid use disorder diagnosis for at least one year prior to admission. The  
proposed changes also permit individuals with acute or chronic conditions to self-administer non-SUD medications  
while receiving treatment services in residential, residential withdrawal management, and methadone providers.  
A. Estimate the change in the frequency of the targeted behavior expected from the proposed rules.  
The proposed rules will allow increased access to care for patients and reduce costs to providers by eliminating  
costs associated with licensure of facilities fees to the low-risk service of outpatient counseling programs.  
B. Describe the difference between current behavior/practice and desired behavior/practice.  
The current behavior places unnecessary barriers on access to care to individuals seeking treatment. The new  
behavior removes these barriers and should allow more options for individuals who need treatment across  
Michigan. In addition, removing the duplicative licensure of outpatient counseling programs is a cost reduction  
to those providers.  
C. What is the desired outcome?  
Increased access to treatment and reduced costs to providers while still protecting the health, safety, and  
welfare of patients as BPL, MCBAP, and local CMH authorities have oversight for outpatient counseling  
services. BPL regulates the licensing of health professionals under the authority of the Public Health Code that  
can provide SUD counseling services including counselors, marriage and family therapists, social workers, and  
psychologists. MCBAP provides protection and promotes quality services through certification of professionals  
engaging in the prevention of alcohol, tobacco, and other drug problems and the assessment and treatment of  
MCL 24.245(3)  
RIS-Page 3  
addictions. MCBAP sets competency standards for the substance use disorder professionals in Michigan.  
Community mental health service programs are accountable governmental agencies that fund SUD services in  
each local county.  
5. Identify the harm resulting from the behavior that the proposed rules are designed to alter and the likelihood  
that the harm will occur in the absence of the rule.  
A number of patients in Michigan may have lower access to care under the current rules or find it difficult to find and  
receive care. The proposed rules will allow for increased access to care for individuals with SUD. Greater access to  
SUD services will improve the safety and care of Michigan residents in these low-risk service areas such as outpatient  
counseling.  
A. What is the rationale for changing the rules instead of leaving them as currently written?  
The proposed rules reduce duplicative license requirements for outpatient counselling programs and increase  
access to care for patients. Removing duplicative license requirements reduces regulatory burdens and  
increased access to SUD services will improve the safety and care of Michigan residents.  
6. Describe how the proposed rules protect the health, safety, and welfare of Michigan citizens while promoting  
a regulatory environment in Michigan that is the least burdensome alternative for those required to comply.  
The proposed rules continue to protect the health, safety, and welfare of Michigan citizens while reducing barriers to  
care for those seeking treatment for SUD. For providers, the proposed rules reduce duplicative licensure requirements  
yet maintain oversight from other governing authorities. This promotes an effective regulatory environment while  
providing the least burdensome approach for compliance with these regulations.  
7. Describe any rules in the affected rule set that are obsolete or unnecessary and can be rescinded.  
The proposed rules remove the requirement that individuals entering methadone treatment have a documented opioid  
use disorder diagnosis for at least one year prior to admission. This updates the rules to comport with today’s  
standards of care and removes an unnecessary barrier to care.  
Licensing for SUD outpatient counseling programs is unnecessary and duplicative, as these providers are already  
subject to oversight by other regulatory bodies. BPL oversees the licensure of health professionals under the authority  
of the Public Health Code. Additionally, MCBAP ensures quality and public protection by certifying professionals  
involved in the prevention, assessment, and treatment of substance use disorders. MCBAP also establishes  
competency standards for SUD professionals in Michigan. Community mental health service programs are  
accountable governmental agencies that fund SUD services in each local county. Given this existing framework of  
oversight, the proposed deregulation of SUD outpatient counseling services eliminates an unnecessary layer of  
licensure and associated fees. As part of this change, the requirement for branch office licensure is also removed,  
further reducing administrative burden for providers.  
FISCAL IMPACT ON THE AGENCY  
Fiscal impact is an increase or decrease in expenditures from the current level of expenditures, i.e., hiring  
additional staff, higher contract costs, programming costs, changes in reimbursements rates, etc. over and  
above what is currently expended for that function. It does not include more intangible costs for benefits, such  
as opportunity costs, the value of time saved or lost, etc., unless those issues result in a measurable impact on  
expenditures.  
8. Please provide the fiscal impact on the agency (an estimate of the cost of rule imposition or potential savings  
for the agency promulgating the rule).  
There will be a decrease in revenue for the agency as outpatient counseling programs will no longer be required to  
pay the initial $500 licensure fee and renewal fee. The estimated decrease in revenue is $107,500 based on 215  
currently licensed programs that would no longer require licensing.  
9. Describe whether or not an agency appropriation has been made or a funding source provided for any  
expenditures associated with the proposed rules.  
There have been no appropriations made or a funding source provided that are associated with these rules.  
10. Describe how the proposed rules are necessary and suitable to accomplish their purpose, in relationship to  
the burden(s) the rules place on individuals. Burdens may include fiscal or administrative burdens, or  
duplicative acts.  
MCL 24.245(3)  
RIS-Page 4  
The proposed rules reduce duplicative regulatory oversight as individuals providing outpatient counseling services are  
also covered by Article 15 of the Public Health Code as well as Federal regulatory requirements for certification of  
SUD counselors. These rules reduce the regulatory burden on those that provide counseling services.  
A. Despite the identified burden(s), identify how the requirements in the rules are still needed and  
reasonable compared to the burdens.  
The proposed rules reduce unnecessary regulatory burdens on the three areas of changes described, but the  
continuation of the remaining rules are reasonable to protect the health, safety, and welfare of those receiving  
SUD services.  
IMPACT ON OTHER STATE OR LOCAL GOVERNMENTAL UNITS  
11. Estimate any increase or decrease in revenues to other state or local governmental units (i.e., cities,  
counties, school districts) as a result of the rule. Estimate the cost increases or reductions for other state or  
local governmental units (i.e., cities, counties, school districts) as a result of the rule. Include the cost of  
equipment, supplies, labor, and increased administrative costs in both the initial imposition of the rule and  
any ongoing monitoring.  
There are no estimated increases or decreases in revenue to other state or local governmental units. In some  
instances, the county mental health authorities reimburse contracted SUD providers for licensure expenditure. The  
deregulation of outpatient counseling programs removes the cost of licensure ($500 for initial licensure and renewal)  
and these savings should be returned either to the county mental health authorities or the individual SUD providers.  
The bureau is not aware of the numbers of programs that receive this reimbursement and cannot provide an actual  
estimate.  
12. Discuss any program, service, duty, or responsibility imposed upon any city, county, town, village, or school  
district by the rules.  
There are no programs, services, duties, or responsibilities imposed upon any city, town, village, or school district by  
the proposed rules.  
A. Describe any actions that governmental units must take to be in compliance with the rules. This section  
should include items such as record keeping and reporting requirements or changing operational  
practices.  
There are no actions that must be taken by any other governmental units to comply with the proposed rules  
changes.  
13. Describe whether or not an appropriation to state or local governmental units has been made or a funding  
source provided for any additional expenditures associated with the proposed rules.  
No appropriations to state or local government units have been made nor has a funding source been provided for any  
additional expenditure with the proposed rules.  
RURAL IMPACT  
14. In general, what impact will the rules have on rural areas?  
The deregulation of outpatient counseling services and the related licensure expenditures will likely benefit rural areas  
that have struggled to establish or maintain these services in their community. In addition, residents in those areas will  
have increased access to care by removing the requirement that individuals entering methadone treatment have a  
documented opioid use disorder diagnosis for at least one year prior to admission. The proposed changes also permit  
individuals with acute or chronic conditions to self-administer non-SUD medications while receiving treatment services  
in residential, residential withdrawal management, and methadone providers.  
A. Describe the types of public or private interests in rural areas that will be affected by the rules.  
The proposed rules remove barriers to care access that will be especially impactful in rural areas and is a public  
interest.  
ENVIRONMENTAL IMPACT  
MCL 24.245(3)  
RIS-Page 5  
15. Do the proposed rules have any impact on the environment? If yes, please explain.  
The proposed rules do not have impact on the environment.  
SMALL BUSINESS IMPACT STATEMENT  
16. Describe whether and how the agency considered exempting small businesses from the proposed rules.  
Article 6 of the Public Health Code (Act 368 of 1978) dictates who is required to be licensed when providing SUD  
services or programs in Michigan. The scope of those required to be licensed remains the same, and the Public Act  
does not permit an exemption from licensure under the rules for any entity, including small businesses.  
17. If small businesses are not exempt, describe (a) the manner in which the agency reduced the economic  
impact of the proposed rules on small businesses, including a detailed recitation of the efforts of the agency  
to comply with the mandate to reduce the disproportionate impact of the rules upon small businesses as  
described below (in accordance with MCL 24.240(1)(a-d)), or (b) the reasons such a reduction was not lawful  
or feasible.  
Small businesses are not exempt, and reductions targeted specifically for small businesses were not lawful or feasible  
due to Article 6 of the Public Health Code (Act 368 of 1978) requiring SUD licensing for any entity offering SUD  
services. Many of the outpatient counseling programs are businesses with less than six counselors. The proposed  
rules do not exempt them from requirements but deregulates these small businesses from licensure.  
A. Identify and estimate the number of small businesses affected by the proposed rules and the probable  
effect on small businesses.  
Since small businesses are not exempt from licensing and reductions targeted specifically for small businesses  
are not lawful or feasible due to Article 6 of the Public Health Code (Act 368 of 1978) requiring SUD licensing  
for any entity offering SUD services. Approximately 215 facilities are currently licensed as only outpatient  
counseling programs. Many of the outpatient counseling services are businesses with less than six counselors.  
The proposed rules do not exempt them from requirements but deregulates these small businesses from  
licensure.  
B. Describe how the agency established differing compliance or reporting requirements or timetables for  
small businesses under the rules after projecting the required reporting, record-keeping, and other  
administrative costs.  
The department did not establish any different requirements for small state-licensed SUD programs as the  
proposed rules are uniform relative to reporting, record-keeping, and other administrative costs.  
C. Describe how the agency consolidated or simplified the compliance and reporting requirements for  
small businesses and identify the skills necessary to comply with the reporting requirements.  
The proposed rules are uniform for all state-licensed SUD facilities. They do not require any increased skills for  
small providers to comply with reporting requirements.  
D. Describe how the agency established performance standards to replace design or operation standards  
required by the proposed rules.  
There are no design or operation standards in the proposed rules.  
18. Identify any disproportionate impact the proposed rules may have on small businesses because of their size  
or geographic location.  
There are no requirements that adversely impact a provider related to size or geographic location in the proposed  
rules.  
19. Identify the nature of any report and the estimated cost of its preparation by small businesses required to  
comply with the proposed rules.  
There are no reporting requirements that would require outside expertise or costs to small providers in the proposed  
rules.  
20. Analyze the costs of compliance for all small businesses affected by the proposed rules, including costs of  
equipment, supplies, labor, and increased administrative costs.  
The proposed rules do not require any new or additional equipment, supplies, or increased administrative costs for  
small providers.  
21. Identify the nature and estimated cost of any legal, consulting, or accounting services that small businesses  
would incur in complying with the proposed rules.  
MCL 24.245(3)  
RIS-Page 6  
The proposed rules do not obligate or require legal, consulting, or accounting services costs to comply with these  
requirements.  
22. Estimate the ability of small businesses to absorb the costs without suffering economic harm and without  
adversely affecting competition in the marketplace.  
There are no costs to small businesses and no harm anticipated because of the proposed rules. There will be  
potential for cost reduction by removing the requirements for licensure for outpatient counseling programs, many of  
which are businesses with less than six counselors.  
23. Estimate the cost, if any, to the agency of administering or enforcing a rule that exempts or sets lesser  
standards for compliance by small businesses.  
The Public Health Code does not permit lesser standards of compliance for small businesses. It would likely cost the  
agency more to devote staff time to determining which licenses are operated by small businesses and enforce  
different requirements for those facilities.  
24. Identify the impact on the public interest of exempting or setting lesser standards of compliance for small  
businesses.  
Exempting or setting lesser standards of compliance for small businesses with respect to SUD services programs  
may have a negative effect on the health, safety, and welfare of the citizens of Michigan.  
25. Describe whether and how the agency has involved small businesses in the development of the proposed  
rules.  
The bureau involved small business through the rules review process through an informal meeting and opportunities  
to submit comments and suggestions. An informational webinar was hosted on September 24, 2025.  
The agency received a lot of positive feedback from rural and primary care providers in the northern part of the state.  
A. If small businesses were involved in the development of the rules, please identify the business(es).  
Many of the outpatient counseling providers are small businesses as described above and their input was  
sought in the development in these proposed rules.  
COST-BENEFIT ANALYSIS OF RULES (INDEPENDENT OF STATUTORY IMPACT)  
26. Estimate the actual statewide compliance costs of the rule amendments on businesses or groups.  
The proposed rules are estimated to save businesses providing outpatient counseling services by eliminating the  
requirement of program licensure. Estimate savings of $500 (license fee) x 215 providers is $107,500. The average  
SUD inspection cost to the department is approximately $600 for staff wages, travel, meals, and incidentals, with  
approximately $240 in savings from travel, meals, and incidentals per inspection as these changes will not result in a  
reduction of staff since there is currently only 1 inspector. Providers will save significantly more based upon provider  
staff time consumed during initial inspection, follow up inspection, and composing corrective action plans when  
applicable.  
A. Identify the businesses or groups who will be directly affected by, bear the cost of, or directly benefit  
from the proposed rules.  
The proposed rule changes will directly impact currently state licensed outpatient counseling programs by no  
longer requiring duplicative licensure and the related licensing expenditures. Individuals seeking treatment from  
SUD programs will benefit by reduced barriers to care.  
B. What additional costs will be imposed on businesses and other groups as a result of these proposed  
rules (i.e., new equipment, supplies, labor, accounting, or recordkeeping)? Please identify the types and  
number of businesses and groups. Be sure to quantify how each entity will be affected.  
There will be no additional costs imposed on businesses or other groups as a result of these rules.  
27. Estimate the actual statewide compliance costs of the proposed rules on individuals (regulated individuals or  
the public). Include the costs of education, training, application fees, examination fees, license fees, new  
equipment, supplies, labor, accounting, or recordkeeping.  
There are no statewide compliance costs placed upon the public or any regulated individuals.  
A. How many and what category of individuals will be affected by the rules?  
The proposed rule changes affect the approximately 215 state licensed outpatient counseling programs who  
would no longer be required to be licensed and pay the related licensure fees. The proposed changes also  
MCL 24.245(3)  
RIS-Page 7  
affect an undetermined number of individuals by removing the requirement that individuals entering methadone  
treatment have a documented opioid use disorder diagnosis for at least one year prior to admission.  
Additionally, the rules support patient-centered care by permitting individuals with acute or chronic conditions to  
self-administer non-SUD medications while receiving treatment services.  
B. What qualitative and quantitative impact do the proposed changes in rules have on these individuals?  
The qualitative impact is increased access to care for those needing methadone services as well as outpatient  
counseling services. In addition, the proposed acknowledgement for self-medication of non-SUD treatment will  
allow individuals with acute and chronic conditions, such as hemophiliacs, to not be denied services.  
Quantitative impact is removing duplicative licensure impacting 215 providers.  
28. Quantify any cost reductions to businesses, individuals, groups of individuals, or governmental units as a  
result of the proposed rules.  
There will be a $500 cost reduction to the approximately 215 state licensed outpatient counseling programs who  
would no longer be required to be licensed and pay the related licensure fees.  
29. Estimate the primary and direct benefits and any secondary or indirect benefits of the proposed rules. Please  
provide both quantitative and qualitative information, as well as any assumptions.  
The primary benefit is a reduced regulatory burden of duplicative licensure requirements for outpatient counseling  
programs.  
Secondary benefits are increased access to care by removing the requirement that individuals entering methadone  
treatment have a documented opioid use disorder diagnosis for at least one year prior to admission. The proposed  
changes also permit individuals with acute or chronic conditions to self-administer non-SUD medications while  
receiving treatment services in residential, residential withdrawal management, and methadone providers.  
30. Explain how the proposed rules will impact business growth and job creation (or elimination) in Michigan.  
The proposed changes may impact job growth by no longer requiring licensure and the related licensing expenditures  
for outpatient counseling programs. The proposed rules will not result in job elimination.  
31. Identify any individuals or businesses who will be disproportionately affected by the rules as a result of their  
industrial sector, segment of the public, business size, or geographic location.  
Individuals or businesses will not be disproportionately affected by the rules because of their industrial sector,  
segment of the public, business size, or geographic location.  
32. Identify the sources the agency relied upon in compiling the regulatory impact statement, including the  
methodology utilized in determining the existence and extent of the impact of the proposed rules and a cost-  
benefit analysis of the proposed rules.  
When compiling information for the SUD rules and regulatory impact statement, the department relied on the following  
sources for compiling the regulatory impact statement: an analysis of border states to Michigan and similarly regulated  
states, including Illinois, Indiana, Minnesota, Ohio, and Wisconsin as well as provider feedback on current practice  
standards. Cost-benefit analysis was conducted using 2025 Michigan licensure data.  
Illinois:  
0HEALTH  
A. How were estimates made, and what assumptions were made? Include internal and external sources,  
published reports, information provided by associations or organizations, etc., that demonstrate a need  
for the proposed rules.  
MCL 24.245(3)  
RIS-Page 8  
We researched current rules in effect in Illinois, Indiana, Minnesota, Ohio, and Wisconsin. Our estimates were  
made after evaluating the standards in these five states.  
Illinois:  
https://www.ilga.gov/agencies/JCAR/Sections?PartID=07702060&TitleDescription=TITLE%2077:%20%20PUBL  
IC%20HEALTH  
ALTERNATIVE TO REGULATION  
33. Identify any reasonable alternatives to the proposed rules that would achieve the same or similar goals.  
There are no reasonable alternatives to the proposed rules that would achieve the same or similar goals.  
A. Please include any statutory amendments that may be necessary to achieve such alternatives.  
There are no reasonable alternatives to the proposed rules, so there are no necessary statutory amendments.  
34. Discuss the feasibility of establishing a regulatory program similar to that proposed in the rules that would  
operate through private market-based mechanisms. Please include a discussion of private market-based  
systems utilized by other states.  
Extensive research and development would be needed to establish a regulatory program through private market-  
based mechanisms. Regulation of SUD services in neighboring states to Michigan are not private market-based,  
therefore no other models were available for evaluation.  
35. Discuss all significant alternatives the agency considered during rule development and why they were not  
incorporated into the rules. This section should include ideas considered both during internal discussions  
and discussions with stakeholders, affected parties, or advisory groups.  
The proposed rule changes include all proposals and alternatives provided by current licensees and the only other  
alternative suggested was to not de-regulate outpatient counseling services.  
ADDITIONAL INFORMATION  
36. As required by MCL 24.245b(1)(c), please describe any instructions regarding the method of complying with  
the rules, if applicable.  
BCHS regularly provides instructions to licensed SUD providers regarding compliance with the applicable  
administrative rules. In addition, after the proposed rules have been promulgated, the bureau will provide information  
to licensees that will inform them of the new rules, update any website guidance, provide training, and inform as  
described in MCL 24.245b(1)(c).  
MCL 24.245(3)  
;