Virginia - Integrated Employment — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-08-16

In Virginia, Integrated Employment (officially termed Supported Employment) is a critical service provided under the state's Developmental Disabilities (DD) Waivers, which include the Community Living (CL), Family and Individual Supports (FIS), and Building Independence (BI) waivers. The service provides job development, placement, and ongoing on-site coaching to help individuals with developmental disabilities secure and maintain competitive work in integrated community settings at or above the prevailing minimum wage.

The single biggest structural barrier to entry for this service in Virginia is the strict sequential gatekeeping: an applicant cannot even submit a Medicaid enrollment application to the Department of Medical Assistance Services (DMAS) until they have first secured a Supported Employment license from the Department of Behavioral Health and Developmental Services (DBHDS), passed a distinct Home and Community-Based Services (HCBS) Settings compliance review, and established alignment agreements with regional Community Services Boards (CSBs) that control local waiver service authorizations.

1. Service Definition and Scope

Virginia defines Supported Employment as services provided in community workplace settings that maximize the individual's ability to maintain competitive integrated employment. The service is designed for individuals who need ongoing support to learn and perform a job, and it is funded through the state's DD Waivers after vocational rehabilitation funds have been exhausted.

The state recognizes two primary modalities: Individual Supported Employment (ISE) and Group Supported Employment (GSE). ISE focuses on 1:1 job coaching and development, while GSE involves continuous support for small groups of individuals working in an integrated environment.

• Target Population: Individuals diagnosed with developmental disabilities who are enrolled in the CL, FIS, or BI Medicaid waivers.
• Individual Supported Employment (ISE): 1:1 support including job development, placement, intensive on-the-job training, and long-term follow-along coaching.
• Group Supported Employment (GSE): Continuous support provided in an integrated community setting for groups of two to eight individuals.
• Competitive Wage Mandate: Employment must be compensated at or above the state minimum wage and comparable to the customary wage paid by the employer to employees without disabilities performing similar duties.
• Service Limits: Supported Employment is typically authorized in combination with other day services, not to exceed a combined total of 40 hours per week.
• Funding Sequencing: Medicaid waiver funds cannot be used for Supported Employment if the individual is eligible for and has not yet exhausted similar services under the Rehabilitation Act of 1973 (via DARS) or IDEA (via VDOE).

2. Regulatory and Oversight Agencies

The oversight of Supported Employment in Virginia is bifurcated. The Department of Behavioral Health and Developmental Services (DBHDS) acts as the primary regulatory and licensing body, ensuring providers meet health, safety, and programmatic standards. The Department of Medical Assistance Services (DMAS) serves as the state Medicaid agency, handling provider enrollment, claims processing, and financial audits.

Additionally, the Department for Aging and Rehabilitative Services (DARS) plays a crucial role in the employment ecosystem, as they typically fund the initial job placement and training phases before an individual transitions to long-term Medicaid waiver funding.

• Virginia Department of Behavioral Health and Developmental Services (DBHDS): The primary licensing and regulatory authority for behavioral health and developmental disability services (https://dbhds.virginia.gov).
• DBHDS Office of Licensing: The specific division responsible for processing applications, conducting inspections, and issuing Supported Employment licenses (https://dbhds.virginia.gov/quality-management/Office-of-Licensing).
• Virginia Department of Medical Assistance Services (DMAS): The state Medicaid agency responsible for provider enrollment, HCBS settings compliance, and reimbursement (https://www.dmas.virginia.gov).
• Virginia Medicaid Enterprise System (MES): The official portal system managed by DMAS for provider enrollment and claims (https://vamedicaid.dmas.virginia.gov).
• Virginia Department for Aging and Rehabilitative Services (DARS): The state agency managing vocational rehabilitation services, which must often be exhausted prior to Medicaid billing (https://www.vadars.org).

3. Gatekeeping Prerequisites: Who Can Even Apply

Virginia employs a rigid, sequential approval process that blocks Medicaid enrollment until several structural preconditions are met. A provider cannot simply apply to DMAS to become a Supported Employment provider; they must first navigate DBHDS licensing and local county-level gatekeepers.

The most critical prerequisites involve obtaining the underlying state license, passing a federal settings rule review, and securing relationships with the local entities that actually authorize the care.

• DBHDS Licensure: Applicants must hold an active, approved DBHDS Supported Employment License before DMAS will accept a Medicaid provider enrollment application.
• HCBS Settings Compliance Review: Providers must submit their HCBS policies to hcbscomments@dmas.virginia.gov for internal review and approval prior to enrolling with Medicaid to ensure the service setting does not isolate individuals.
• CSB Affiliation and Authorization: Providers must secure alignment agreements with regional Community Services Boards (CSBs), which act as the local gatekeepers and must enter prior authorizations into the Waiver Management System (WaMS) before any services can be billed.
• DARS Exhaustion Verification: Providers must have a mechanism to verify and document that an individual's vocational rehabilitation benefits through DARS are exhausted or unavailable before billing the Medicaid DD waiver.
• Corporate Registration: The business entity must be actively registered with the Virginia State Corporation Commission (SCC) prior to submitting the initial DBHDS application.

4. Licensure and Certification Requirements

To obtain a Supported Employment license, providers must comply with the Rules and Regulations for Licensing Providers by DBHDS (12VAC35-105). The process is managed entirely online through the DBHDS CONNECT portal and requires extensive documentation of the agency's operational, financial, and clinical frameworks.

The licensing process culminates in an on-site inspection by a DBHDS Licensing Specialist, who verifies that the physical (if applicable) and programmatic infrastructure matches the submitted policies.

• Application Portal: All initial licensing applications, policy uploads, and communications must be submitted through the DBHDS CONNECT system.
• Initial Application Packet: Must include a detailed business plan, operating budget, organizational chart, and comprehensive policies covering staffing, emergency preparedness, and service delivery.
• Human Rights Verification: Providers must submit their human rights policies to the DBHDS Office of Human Rights and receive an official verification letter before the licensing application is considered complete.
• Regulatory Framework: Providers are evaluated against the standards set forth in 12VAC35-105, which dictates requirements for behavioral health and developmental services in Virginia.
• On-Site Inspection: A DBHDS Licensing Specialist will conduct a thorough review of the provider's administrative records, staff files, and service locations before issuing a conditional or annual license.

5. Medicaid Provider Enrollment

Once DBHDS licensure and HCBS settings approvals are secured, providers must enroll as a billing provider with Virginia Medicaid. This is executed through the Provider Services Solution (PRSS) portal within the Virginia Medicaid Enterprise System (MES).

Supported Employment providers enroll under specific DD Waiver provider types and must link their DBHDS license directly to their Medicaid enrollment profile to activate their billing privileges.

• Enrollment Portal: Applications must be submitted electronically via the DMAS PRSS portal within the MES (https://vamedicaid.dmas.virginia.gov).
• Required Documentation: Uploads must include the active DBHDS Supported Employment License, the DMAS HCBS approval letter, an active Federal EIN, and a corporate Type 2 NPI.
• Application Fee: Providers are subject to the ACA institutional provider application fee (approximately $731) unless they have already paid it to Medicare or another state's Medicaid program.
• OIG LEIE Screening: Providers must attest to screening all owners, managing employees, and contractors against the HHS-OIG List of Excluded Individuals and Entities.
• Revalidation: Virginia Medicaid requires providers to revalidate their enrollment through the PRSS portal every five years to maintain active billing status.

6. Staffing, Training and Background Checks

Virginia mandates strict qualifications and background clearances for all staff providing Supported Employment services. Direct Support Professionals (DSPs) and Employment Specialists must meet specific competency standards before working independently with waiver participants.

Background checks are a zero-tolerance compliance area; no staff member may provide direct care until all fingerprinting and registry clearances are fully returned and verified.

• Employment Specialist Credentials: Staff providing Supported Employment must hold a Certified Employment Support Professional (CESP) credential or complete an Association of Community Rehabilitation Educators (ACRE) approved basic training certificate.
• Criminal Background Checks: DBHDS requires fingerprint-based national criminal history checks for all direct care staff prior to employment.
• Central Registry Clearance: Staff must clear a Virginia Department of Social Services (VDSS) Child Protective Services Central Registry check.
• DSP Orientation: All direct care staff must complete the DBHDS Direct Support Professional orientation and pass the associated objective test within 30 days of hire.
• CPR and First Aid: All staff providing direct supports must maintain active, hands-on CPR and First Aid certifications.
• Monthly Exclusion Checks: Agencies must screen all employees and contractors monthly against the HHS-OIG LEIE and immediately report any exclusions to providerexclusion@dmas.virginia.gov.

7. Documentation, Policies and Records

Providers must maintain rigorous, person-centered documentation to justify Medicaid reimbursement. Both DBHDS and DMAS conduct audits, and failure to link daily service notes to the specific goals in the individual's support plan will result in citations or financial recoupment.

Virginia utilizes a standardized electronic system for incident reporting, and providers must have policies in place to ensure timely compliance with human rights regulations.

• Person-Centered Individual Support Plan (PCISP): Providers must develop and maintain a clear Service Agreement/PCISP for every participant, detailing specific vocational targets and support parameters.
• Daily Progress Notes: Job coaching notes must be archived chronologically, documenting the specific interventions provided, exact start and stop times, and progress toward PCISP goals.
• Task Analyses: Providers must utilize task analyses to break down job duties and track the individual's independence level and fading of supports over time.
• Incident Reporting: Critical incidents and human rights complaints must be reported electronically via the DBHDS Computerized Human Rights Information System (CHRIS) within 24 hours.
• Record Retention: Medicaid records, including daily notes and employer contact history, must be retained for a minimum of five years to satisfy DMAS post-payment audits.

8. Billing, Rates and Claims

Supported Employment services are billed to DMAS through the MES portal using standard healthcare claim formats. Reimbursement rates are established by the Virginia General Assembly and published on the DMAS fee schedule.

Because these are waiver services, every claim must be backed by a valid prior authorization entered into the state's Waiver Management System (WaMS) by the local CSB.

• Billing System: Claims are submitted directly to DMAS via the MES portal or through a clearinghouse using EDI 837P transactions.
• Procedure Codes: Individual Supported Employment is typically billed using HCPCS code H2023 (Supported employment, per 15 minutes).
• Prior Authorization: No claims will pay unless the local CSB has approved the service and entered a valid authorization into WaMS.
• Regional Rate Differentials: DMAS provides a slightly higher reimbursement rate for providers operating in the Northern Virginia (NOVA) region to account for the higher cost of living.
• Post-Payment Audits: DMAS Program Integrity routinely audits claims; missing start/stop times, lack of PCISP alignment, or billing for unapproved activities will result in immediate overpayment liability.

9. Approval Sequence and Timeline

Becoming a Supported Employment provider in Virginia is a lengthy process due to the sequential nature of the approvals. Applicants cannot initiate the next phase until the previous agency has issued its final approval.

From initial corporate registration to the first billable Medicaid claim, prospective providers should anticipate a timeline of 6 to 9 months, assuming no major application errors or inspection failures.

• Phase 1: Corporate Registration and DBHDS CONNECT Application Submission (30-60 days).
• Phase 2: DBHDS Policy Review and Human Rights Verification (60-90 days).
• Phase 3: DBHDS On-Site Inspection and Conditional License Issuance (30-45 days).
• Phase 4: DMAS HCBS Settings Review via hcbscomments@dmas.virginia.gov (30 days, often concurrent with late-stage licensing).
• Phase 5: DMAS PRSS Medicaid Enrollment and CSB Alignment (30-60 days).

10. Common Denials and Survey Findings

During both initial licensing and routine audits, DBHDS and DMAS frequently cite providers for administrative and documentation lapses. Understanding these common pitfalls is essential for maintaining active licensure and avoiding Medicaid recoupments.

The most severe penalties usually stem from background check violations or failing to adhere to the federal HCBS settings requirements regarding community integration.

• HCBS Settings Violations: Applications are frequently delayed or denied if policies suggest the employment setting isolates individuals from the broader community or fails to pay prevailing wages.
• Incomplete Background Checks: DBHDS frequently issues citations for allowing staff to begin direct care before fingerprint and Central Registry results are fully returned and cleared.
• Missing Service Authorizations: Providers face claim denials for providing and billing for services before the local CSB has officially approved and entered the authorization into WaMS.
• Generic Progress Notes: DMAS audits frequently result in recoupments for cloned or generic daily notes that do not reflect the specific interventions or PCISP goals of the individual.
• Lapsed Staff Credentials: Citations are common for expired CPR/First Aid certifications or failure to ensure staff complete the required ACRE or CESP certification within mandated timeframes.

11. Key Contacts and Resources

Prospective Supported Employment providers must interact with multiple state portals and divisions. Maintaining access to the most current regulatory manuals and application systems is critical for compliance.

Below are the essential official resources required to navigate the Virginia licensing and enrollment process.

• DBHDS Office of Licensing: https://dbhds.virginia.gov/quality-management/Office-of-Licensing
• DBHDS CONNECT Portal: https://dbhds.virginia.gov/quality-management/Office-of-Licensing/connect/
• DMAS Provider Enrollment (MES PRSS): https://vamedicaid.dmas.virginia.gov
• Virginia HCBS Toolkit & Settings Review: https://www.dmas.virginia.gov/for-providers/long-term-care/waivers/home-and-community-based-services-toolkit/
• Virginia Department for Aging and Rehabilitative Services (DARS): https://www.vadars.org

See all Virginia services · Virginia Medicaid consulting · book a consultation.