Delaware - Behavioral Health Services — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-09-09

The Delaware Division of Substance Abuse and Mental Health (DSAMH) certifies mental health clinics and licenses addiction and co-occurring treatment agencies before they can enroll in the Delaware Medical Assistance Program (DMAP) to provide behavioral health services.

Independent Licensed Behavioral Health Practitioners (LBHPs) may enroll directly, but agency-based providers must secure DSAMH program licensure and subsequently contract with Delaware's Medicaid Managed Care Organizations (MCOs) to receive reimbursement for assessment, therapy, and crisis response.

1. Service Definition and Scope

Delaware Medicaid covers behavioral health services under the Rehabilitative Services and Licensed Behavioral Health Practitioner (LBHP) State Plan benefits. These services encompass mental health and substance use disorder assessments, individual and group therapy, community support programs, and crisis intervention.

Services are delivered by a mix of independent licensed practitioners, agency-based clinicians, and certified peer specialists, with strict supervision requirements for unlicensed staff.

• Service Categories: Outpatient therapy, community support programs, peer support, and crisis intervention.
• LBHP Definition: Includes Licensed Psychologists, Licensed Clinical Social Workers (LCSWs), Licensed Professional Counselors of Mental Health (LPCMHs), and Licensed Marriage and Family Therapists (LMFTs).
• Supervision Limits: Licensed Psychologists may supervise up to seven unlicensed assistants or post-doctoral professionals.
• Crisis Services: Must be supervised by a licensed practitioner of the healing arts acting within their scope of practice.
• Peer Support: Requires self-identification with lived experience, minimum age of 21, high school diploma or GED, and completion of Delaware state-approved standardized peer specialist training.

2. Regulatory and Oversight Agencies

The Department of Health and Social Services (DHSS) oversees behavioral health through multiple divisions. DSAMH handles programmatic licensing and certification, while the Division of Medicaid and Medical Assistance (DMMA) manages the Medicaid State Plan and MCO contracts.

Facility-based and residential programs are additionally overseen by the Division of Health Care Quality (DHCQ).

• Division of Substance Abuse and Mental Health (DSAMH): Certifies mental health clinics and licenses addiction treatment programs (https://dhss.delaware.gov/dsamh/index).
• Division of Medicaid and Medical Assistance (DMMA): Administers the Delaware Medicaid program and sets fee schedules (https://dhss.delaware.gov/dmma/).
• Delaware Medical Assistance Program (DMAP): The portal and system for Medicaid provider enrollment and claims processing (https://medicaid.dhss.delaware.gov).
• Division of Health Care Quality (DHCQ): Licenses residential and facility-based programs under Title 16 (https://dhss.delaware.gov/dhcq/).

3. Gatekeeping Prerequisites: Who Can Even Apply

Delaware requires agency-based behavioral health providers to obtain specific programmatic licensure before Medicaid enrollment is permitted. Independent practitioners must hold active state professional licenses.

Because Delaware utilizes a managed care delivery system for most Medicaid beneficiaries, providers must secure network contracts with MCOs to maintain a viable client base.

• Agency Licensure Prerequisite: Service providers employed by addiction treatment and co-occurring treatment agencies must work in a program licensed by DSAMH.
• Mental Health Clinic Certification: Mental health clinics require certification by DSAMH as part of the Single State Agency for Medicaid before enrollment.
• MCO Network Contracting: Providers must contract with Delaware's Medicaid Managed Care Organizations to serve the majority of Medicaid beneficiaries.
• Residential Placement Prior Approval: Residential placements under ASAM criteria require prior approval from the State Medicaid Agency or its designee.

4. Licensure and Certification Requirements

Behavioral health agencies must comply with DSAMH licensing regulations or DHCQ facility rules depending on the service setting. Individual practitioners must maintain active licensure through the Delaware Division of Professional Regulation.

Applications for facility licensure require detailed operational documentation, including proof of insurance and capacity limits.

• Addiction Treatment Licensure: Agencies providing substance use and co-occurring services must hold a DSAMH license.
• Residential Program Licensure: All residential programs must be licensed or certified under Delaware Administrative Code Title 16.6001.
• Business License: Agencies must submit a copy of their Delaware business license and home state license (if applicable) during the application process.
• Insurance Documentation: Licensure applications require documentation of all insurance coverage mandated by state regulation.
• Capacity Designation: Facility and residential applications must state the maximum client capacity requested.

5. Medicaid Provider Enrollment

After securing necessary DSAMH or DHCQ licenses, providers must enroll through the Delaware Medical Assistance Program (DMAP) portal. Providers must pass federal Affordable Care Act (ACA) screening requirements.

Enrollment with DMAP is a prerequisite for credentialing with the state's Medicaid MCOs.

• Enrollment Portal: Applications are submitted electronically through the DMAP provider portal.
• ACA Screening: Providers are subject to risk-based screening, which may include application fees and site visits depending on provider type.
• Required Documentation: Applicants must upload proof of DSAMH certification or licensure, professional licenses, and tax identification.
• MCO Credentialing: Following DMAP enrollment, providers must complete separate credentialing applications with each Delaware Medicaid MCO.

6. Staffing, Training and Background Checks

Delaware mandates specific qualifications for behavioral health staff, ranging from independent licensed practitioners to unlicensed support staff. All staff must meet age, education, and training standards defined by state law.

Agencies are responsible for ensuring all direct care workers pass required background screenings and maintain current certifications.

• Minimum Staff Qualifications: Unlicensed professional staff must be at least 18 years old with a high school diploma or equivalent.
• Physician Qualifications: Must hold an MD or DO, be licensed in Delaware, and have completed or be enrolled in an accredited residency in psychiatry, internal medicine, or family practice.
• Peer Specialist Training: Peers must complete the Delaware state-approved standardized peer specialist training and be currently employed as a peer supporter in Delaware.
• Background Checks: Direct care staff are subject to mandatory criminal background checks and registry screenings as required by DHCQ and DHSS policies.

7. Documentation, Policies and Records

Providers must maintain comprehensive clinical and administrative records to support Medicaid billing and pass state audits. Delaware emphasizes secure health information exchange and strict incident reporting.

Supervision of unlicensed staff must be rigorously documented, as their services cannot be billed independently.

• Medical Necessity Documentation: Community support services must be authorized as medically necessary by a physician and documented in the client record.
• Health Information Exchange: Providers are expected to utilize the Delaware Health Information Network (DHIN) for secure exchange of patient health records.
• Critical Incident Reporting: Agencies must follow strict protocols for reporting abuse, neglect, or unusual occurrences to DHCQ and DSAMH within specified timeframes.
• Supervision Records: Agencies must document the supervision of unlicensed staff by licensed practitioners, as services by unlicensed staff cannot be billed independently under the LBHP section.

8. Billing, Rates and Claims

Behavioral health services are reimbursed based on a Medicaid fee schedule established by the State of Delaware. Claims are submitted using standard HCPCS codes and must adhere to national correct coding initiatives.

Certain services require prior authorization to exceed initial pass-through limits, and specific costs like room and board are excluded from reimbursement.

• Fee Schedule Basis: Reimbursements are based on the state-developed fee schedule published in the Delaware Register of Regulations.
• Psychologist Rates: If a Medicare fee exists, Delaware pays Psychologists at 100% of the Medicaid physician rates.
• Prior Authorization: Services exceeding the initial pass-through authorization limit must be approved for re-authorization prior to service delivery.
• Excluded Costs: Room and board costs are explicitly excluded from addiction services rates and the Medicaid fee schedule.
• Billing Codes: Units of service are defined according to the approved Healthcare Common Procedure Coding System (HCPCS) code set.

9. Approval Sequence and Timeline

The path to becoming a fully billable behavioral health provider in Delaware involves sequential approvals from state licensing bodies, the Medicaid agency, and managed care plans.

Providers cannot bill for services until all three phases—licensure, DMAP enrollment, and MCO credentialing—are complete.

• Step 1: Business Setup: Obtain a Delaware business license and establish the legal entity.
• Step 2: Program Licensure: Apply for DSAMH certification or DHCQ licensure, which includes policy reviews and potential site inspections.
• Step 3: DMAP Enrollment: Submit the Medicaid provider enrollment application through the DMAP portal and undergo ACA screening.
• Step 4: MCO Contracting: Apply for network inclusion and credentialing with Delaware's Medicaid MCOs.
• Timeline Variability: The state does not publish a guaranteed timeline; processing depends on application completeness and MCO network adequacy reviews.

10. Common Denials and Survey Findings

The Division of Substance Abuse and Mental Health (DSAMH) conducts desk and field audits to ensure compliance with organizational, administrative, and program standards. Failures in these areas lead to recoupments or license revocation.

Billing errors related to unlicensed staff and missing authorizations are frequent targets for Medicaid recovery.

• Unlicensed Staff Billing: Billing for services rendered by unlicensed assistants or post-doctoral professionals under the LBHP section of the State Plan.
• Supervision Ratio Violations: Exceeding the maximum ratio of seven unlicensed assistants per Licensed Psychologist.
• Missing Prior Authorization: Delivering and billing for services that exceed the initial pass-through limit without securing re-authorization.
• Inadequate Medical Necessity: Failing to document physician authorization for community support programs.
• Facility Non-Compliance: Operating a residential program without the required Title 16.6001 licensure or exceeding the approved maximum client capacity.

11. Key Contacts and Resources

Providers should utilize official state portals and division websites for the most current regulations, fee schedules, and enrollment forms.

The Delaware Register of Regulations is the primary source for updates to the Medicaid fee schedule and licensing rules.

• Division of Substance Abuse and Mental Health (DSAMH): https://dhss.delaware.gov/dsamh/index
• Division of Medicaid and Medical Assistance (DMMA): https://dhss.delaware.gov/dmma/
• Delaware Medical Assistance Program (DMAP) Portal: https://medicaid.dhss.delaware.gov
• Division of Health Care Quality (DHCQ): https://dhss.delaware.gov/dhcq/
• Delaware Regulations (Fee Schedules and Rules): https://regulations.delaware.gov/

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