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Arkansas - Day Habilitation Services — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-09-09

The Arkansas Department of Human Services (DHS) Division of Provider Services and Quality Assurance (DPSQA) licenses Day Habilitation under the Adult Developmental Day Treatment (ADDT) and Community and Employment Support (CES) Waiver authorities. Providers deliver these structured daytime services to individuals with intellectual and developmental disabilities to build adaptive, socialization, and self-help skills outside their homes.

Approval requires securing a Medicaid provider number through the Arkansas Medicaid Management Information System (MMIS) and subsequently credentialing with one or more Provider-Led Arkansas Shared Savings Entities (PASSEs). Operating without a PASSE network contract prevents a licensed facility from receiving reimbursement for the vast majority of waiver participants in the state.

1. Service Definition and Scope

In Arkansas, Day Habilitation is primarily delivered and regulated as Adult Developmental Day Treatment (ADDT) or as a core service under the Community and Employment Support (CES) Waiver. The service provides structured, facility-based or community-integrated programming designed to assist individuals in acquiring, retaining, or improving self-help, socialization, and adaptive skills.

Services must take place in a non-residential setting separate from the individual's private home or other residential living arrangement. The programming must align with the individual's Person-Centered Service Plan (PCSP) and comply with federal HCBS Settings Rules regarding community integration.

2. Regulatory and Oversight Agencies

The Arkansas Department of Human Services (DHS) is the umbrella agency managing Medicaid and HCBS programs. Within DHS, the Division of Provider Services and Quality Assurance (DPSQA) handles licensure, certification, and HCBS Settings Rule compliance.

The Division of Developmental Disabilities Services (DDS) oversees the programmatic elements of the CES Waiver, while the actual care coordination and provider reimbursement are managed by the Provider-Led Arkansas Shared Savings Entities (PASSEs).

3. Gatekeeping Prerequisites: Who Can Even Apply

Arkansas utilizes a managed care model for its IDD and behavioral health populations known as the PASSE system. To serve CES Waiver participants, a provider must not only obtain state licensure and Medicaid enrollment but must also successfully contract with at least one of the state's designated PASSE organizations.

Before applying for Medicaid enrollment, an agency must obtain an ADDT license or CES Waiver certification from DPSQA. There is currently no statewide moratorium on new ADDT licenses, but PASSEs maintain their own network adequacy standards and may close their networks to new providers if they determine adequate capacity exists in a specific region.

4. Licensure and Certification Requirements

Prospective providers must submit a comprehensive application to DPSQA to become an ADDT or CES Waiver provider. This process includes submitting architectural plans if operating a facility, passing fire and health department inspections, and demonstrating compliance with the CMS HCBS Settings Final Rule.

Facilities must ensure they are integrated into the greater community and do not have institutional characteristics. DPSQA conducts an initial on-site survey to verify physical plant safety, ADA accessibility, and policy compliance before issuing a provisional license.

5. Medicaid Provider Enrollment

Once licensed by DPSQA, the agency must enroll as an Arkansas Medicaid provider through the Gainwell Technologies-operated MMIS portal. Enrollment requires submitting the state's specific provider application forms and paying the federal application fee.

Providers must enroll under the specific provider type and specialty codes designated for ADDT or CES Waiver services. Retroactive eligibility may be granted up to one year from the date the provider agreement is approved or the effective date of licensure, whichever is later.

6. Staffing, Training and Background Checks

Arkansas requires strict background screening for all personnel providing direct care in an ADDT or Day Habilitation setting. This includes fingerprint-based state and national criminal history checks, as well as checks against the Arkansas Child Maltreatment and Adult Abuse registries.

Direct care staff must meet minimum educational requirements and complete state-mandated training prior to independent client contact. Training must cover recipient rights, incident reporting, positive behavioral supports, and specific needs outlined in the clients' PCSPs.

7. Documentation, Policies and Records

Providers must maintain comprehensive clinical and administrative records that justify the services billed. Every individual receiving Day Habilitation must have an active, PASSE-approved Person-Centered Service Plan (PCSP) that specifically authorizes the service.

Daily attendance and service logs must be kept, detailing the specific activities the individual participated in, the duration of the service, and progress toward the goals identified in the PCSP. Electronic Visit Verification (EVV) is generally required for in-home personal care but facility-based Day Habilitation relies on facility attendance logs.

8. Billing, Rates and Claims

Because Day Habilitation for waiver participants is managed by the PASSEs, providers must submit claims directly to the individual's assigned PASSE rather than the state MMIS, using the PASSE's specific clearinghouse or portal.

Services are typically billed in 15-minute increments or per diem units using standard HCPCS codes (such as T2020 or T2021, depending on the specific waiver and PASSE fee schedule). Rates are negotiated between the provider and the PASSE, though the state establishes minimum fee schedules.

9. Approval Sequence and Timeline

The end-to-end process to become a fully operational and billing Day Habilitation provider in Arkansas typically takes 6 to 9 months. The process begins with securing a physical location and passing local life-safety inspections.

Following local approvals, the provider submits the DPSQA licensure application (60-90 days). Once licensed, Medicaid enrollment via the MMIS portal takes 30-45 days. Finally, PASSE credentialing and contracting can take an additional 90-120 days.

10. Common Denials and Survey Findings

DPSQA frequently delays or denies initial licensure applications due to physical plant issues, such as inadequate ADA accessibility, insufficient square footage per participant, or failure to pass fire inspections. HCBS Settings Rule violations are also a major barrier.

During operational surveys, common citations include missing or expired background checks for staff, failure to document services in accordance with the PCSP, and lack of evidence showing meaningful community integration activities.

11. Key Contacts and Resources

Prospective providers should rely on the official Arkansas Department of Human Services portals and the specific PASSE websites for the most current manuals, fee schedules, and application forms.

The DPSQA Provider Services unit is the primary contact for initial licensure questions, while Gainwell Technologies handles technical issues with the Medicaid MMIS portal.

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