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

Last reviewed: 2026-09-09

The Indiana Family and Social Services Administration (FSSA) Office of Medicaid Policy and Planning (OMPP) certifies Day Habilitation providers through the Community Integration and Habilitation (CIH) and Family Supports (FS) waivers. Providers must secure OMPP HCBS Certification through the OMPP Certification Portal before submitting an Indiana Health Coverage Programs (IHCP) enrollment application.

Approval requires passing the HCBS Final Settings Rule compliance review, which subjects facility-based day programs to Heightened Scrutiny if located in or near institutional settings. Applicants must submit complete operational policies, pass a strict 30-day application expiration window in the OMPP portal, and secure placement on the Bureau of Disabilities Services (BDS) pick list to receive member authorizations.

1. Service Definition and Scope

Day Habilitation services in Indiana provide structured, non-residential daytime programming designed to build self-help, socialization, and adaptive skills for individuals with intellectual and developmental disabilities. The service is funded primarily through the Division of Disability and Rehabilitative Services (DDRS) under the CIH and FS waivers.

Services must be delivered in a community-based setting that complies with the HCBS Final Settings Rule, ensuring participants have access to the broader community. The service cannot be billed concurrently with residential habilitation or employment services for the same individual.

2. Regulatory and Oversight Agencies

The Indiana Family and Social Services Administration (FSSA) serves as the umbrella agency for Medicaid and disability services. Within FSSA, the Office of Medicaid Policy and Planning (OMPP) handles the initial HCBS certification and overall Medicaid administration.

The Division of Disability and Rehabilitative Services (DDRS), specifically through the Bureau of Disabilities Services (BDS), manages the CIH and FS waivers, maintains the provider pick lists, and oversees ongoing service delivery and incident reporting.

3. Gatekeeping Prerequisites: Who Can Even Apply

Indiana requires all prospective Day Habilitation providers to obtain OMPP HCBS Certification before they can apply for an IHCP Medicaid provider number. The state enforces a strict 30-day window to complete the OMPP application; if all required documents are not submitted and approved within this timeframe, the application expires and the provider must start over.

Facility-based Day Habilitation providers face mandatory HCBS Settings Rule compliance checks. If the proposed day facility is located inside or adjacent to a publicly or privately operated facility that provides inpatient institutional treatment, it is subject to Heightened Scrutiny review by OMPP and the Centers for Medicare & Medicaid Services (CMS) before certification can be granted.

4. Licensure and Certification Requirements

Indiana does not issue a traditional facility "license" for Day Habilitation centers; instead, the state uses the OMPP HCBS Certification process to vet provider qualifications. Providers must submit their application through the OMPP Certification Portal, uploading comprehensive operational policies, organizational charts, and proof of insurance.

During the initial review, OMPP allows a maximum of two attempts to correct a document if there are 9 or fewer corrections needed. If an application requires 10 or more corrections, it is immediately expired, forcing the provider to submit a new application.

5. Medicaid Provider Enrollment

After receiving OMPP HCBS Certification, the agency must enroll as a billing provider with the Indiana Health Coverage Programs (IHCP). This is completed online through the IHCP Provider Healthcare Portal, which interfaces with the state's CoreMMIS system.

Day Habilitation providers enroll under specific atypical or waiver provider specialties. Depending on the exact specialty and ownership structure, providers may be subject to high-risk screening, which requires fingerprint-based background checks for all individuals with a 5% or greater ownership interest.

6. Staffing, Training and Background Checks

Direct Support Professionals (DSPs) delivering Day Habilitation must meet minimum state qualifications, including age, education, and background check requirements. Agencies must maintain personnel files demonstrating that all staff have completed required training before providing unsupervised direct care.

Training mandates include CPR, First Aid, and state-specific modules on incident reporting, abuse and neglect prevention, and individual rights. Background checks must be current and uploaded during the OMPP certification process.

7. Documentation, Policies and Records

The OMPP Certification process requires the submission of specific, standalone policy documents rather than a single massive operational manual. Uploading full operational manuals multiple times will result in the application being rejected and expired.

Agencies must ensure that the exact legal name of the applying entity matches the name on all policies, organizational charts, and insurance documents. Blank documents or policies containing a different agency's name are common triggers for immediate application expiration.

8. Billing, Rates and Claims

Day Habilitation services are billed to the IHCP using the Provider Healthcare Portal. Claims are processed through the CoreMMIS system based on the fee schedule established by FSSA and DDRS.

Services are typically authorized on the participant's Notice of Action (NOA) and billed in 15-minute increments or per diem rates, depending on the specific waiver and duration of attendance. Providers must maintain daily attendance logs and service notes to support all billed units.

9. Approval Sequence and Timeline

The approval sequence in Indiana follows a strict three-step process. First, the provider must obtain OMPP HCBS Certification, which involves a 30-day application window and a 5-day correction turnaround.

Second, the provider enrolls with IHCP, which takes a minimum of 15 business days. Finally, the provider must complete waiver program enrollment by being added to the DDRS pick list or contracting with Managed Care Entities (MCEs) for PathWays programs.

10. Common Denials and Survey Findings

OMPP strictly enforces document quality during the certification phase. Applications are frequently expired because providers upload expired background checks, blank organizational charts, or liability insurance quotes instead of active policies.

Another common failure point is selecting services or counties the provider is not qualified to serve. If an applicant submits an application with unqualified services, those services are denied, which may result in the entire application expiring.

11. Key Contacts and Resources

Providers must utilize specific state portals and contact teams depending on their current step in the three-phase approval process. The OMPP Certification Portal includes an Inquiry feature for direct assistance during Step 1.

For IHCP enrollment issues, providers contact the IHCP Provider Enrollment Unit. For final waiver activation under DDRS, providers coordinate with BDS Provider Services.

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