Virginia - Residential Care Service — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-09-10

Group Home Residential services under the Community Living (CL) Waiver are strictly licensed by the Virginia Department of Behavioral Health and Developmental Services (DBHDS) and reimbursed on a fee-for-service basis by the Department of Medical Assistance Services (DMAS). Providers must navigate a bifurcated DBHDS application process before any Medicaid enrollment can occur, operating specifically under the Developmental Disabilities (DD) Waiver program framework.

Before securing a Medicaid provider agreement, an entity must complete DBHDS Office of Licensing Phase 1 and Phase 2 approvals, which involve exhaustive policy reviews, Local Human Rights Committee (LHRC) affiliation, and on-site facility inspections. Because DD Waiver residential services are carved out of Virginia's Cardinal Care managed care program, approved providers bill DMAS directly rather than contracting with Medicaid managed care organizations (MCOs) for these specific waiver codes.

1. Service Definition and Scope

Virginia designates 24-hour congregate residential services under the DD Waivers as "Group Home Residential Services." These services provide skill-building, routine supports, general safety supports, and medical/health supports to individuals with developmental disabilities who require 24-hour supervision. The service must be delivered in a DBHDS-licensed setting that complies with the CMS Home and Community-Based Services (HCBS) Settings Rule.

Group Home Residential is funded exclusively through the Community Living (CL) Waiver; it is not available under the Family and Individual Supports (FIS) or Building Independence (BI) waivers. Virginia also licenses "Sponsored Residential" services (akin to adult foster care), but traditional group homes operate as discrete facility locations usually capped at four individuals per home to meet current integration standards.

• Service Name: Group Home Residential Services.
• Funding Authority: Community Living (CL) Waiver.
• Capacity Limit: New group homes are strongly encouraged to house no more than 4 individuals to align with HCBS Settings requirements, though older grandfathered homes may have higher capacities.
• Included Supports: Skill-building, personal care, medication administration, and behavioral interventions outlined in the Person-Centered Individual Support Plan (PCISP).
• Excluded Costs: Room and board are strictly excluded from Medicaid reimbursement and must be paid through the individual's SSI or personal income.

2. Regulatory and Oversight Agencies

The operational licensure of residential facilities for individuals with developmental disabilities is managed by DBHDS. Financial oversight, waiver administration, and provider enrollment fall under DMAS.

Because Virginia carves DD Waiver services out of its Cardinal Care managed care system, providers interface directly with the state's Medicaid Enterprise System (MES) for enrollment and claims, rather than credentialing with individual MCOs for the residential service itself.

• Licensing Authority: DBHDS Office of Licensing (https://www.dbhds.virginia.gov/quality-management/Office-of-Licensing) conducts all initial and unannounced inspections.
• Medicaid Agency: Department of Medical Assistance Services (DMAS) (https://www.dmas.virginia.gov) manages the waiver design and fee schedules.
• Enrollment Portal: Medicaid Enterprise System (MES) Provider Services Solution (PRSS) (https://vamedicaid.dmas.virginia.gov/provider) is the portal for securing the Medicaid provider agreement.
• Human Rights Oversight: DBHDS Office of Human Rights (https://www.dbhds.virginia.gov/quality-management/human-rights) monitors compliance with the Rules and Regulations to Assure the Rights of Individuals.

3. Gatekeeping Prerequisites: Who Can Even Apply

Virginia does not utilize a Certificate of Need (CON) process for DD Waiver group homes, nor does it restrict applications through closed enrollment windows or RFPs. However, structural prerequisites mandate that a provider secure physical real estate, zoning approval, and extensive policy clearances before DBHDS will even schedule the requisite Phase 2 licensing inspection.

An applicant cannot submit a Medicaid enrollment application in the PRSS portal until the DBHDS license is fully active. Furthermore, all applicants must pass the initial DBHDS policy review (Phase 1) and affiliate with a Local Human Rights Committee (LHRC) before they are permitted to open a physical location.

• Location Securitization: Applicants must have a physical address and obtain local zoning verification or a certificate of occupancy stating the location is approved for a residential group home before Phase 2.
• Phase 1 Policy Review: Providers must submit an Initial Provider Application along with complete operating policies, human rights policies, and a comprehensive business plan to the DBHDS Office of Licensing.
• Human Rights Verification: The provider's human rights policies must be reviewed and approved by the DBHDS Office of Human Rights (OHR) and affiliated with an LHRC before a license is issued.
• Working Capital: Applicants must submit a budget and proof of financial backing (e.g., lines of credit, bank statements) demonstrating the ability to operate for at least 90 days without Medicaid revenue.
• Background Check System Registration: Providers must establish an account with the DBHDS Background Investigations Unit (BIU) and the Virginia State Police before hiring staff.

4. Licensure and Certification Requirements

Residential services are governed by the Rules and Regulations for Licensing Providers by the Department of Behavioral Health and Developmental Services (12VAC35-105). The licensing process is split into two phases: a centralized policy and application review, followed by an on-site physical plant inspection.

Once licensed, the facility must operate in strict compliance with the CMS HCBS Settings Rule, ensuring individuals have privacy, access to food at any time, visitors of their choosing, and leases or residency agreements protecting them from arbitrary eviction.

• Regulation Citation: 12VAC35-105 (Rules and Regulations for Licensing Providers by DBHDS).
• Phase 1 Requirements: Submission of the application, service description, organizational structure, financial plan, and comprehensive policies/procedures.
• Phase 2 Requirements: On-site inspection by a DBHDS Licensing Specialist assessing fire safety, physical plant conditions, water temperature controls, and emergency preparedness.
• Conditional License: Newly approved providers are typically issued a six-month Conditional License.
• Annual Renewals: Following the conditional period, DBHDS issues annual or triennial licenses based on compliance history, accompanied by unannounced inspections.

5. Medicaid Provider Enrollment

Upon securing the DBHDS conditional license, the agency must enroll with DMAS via the PRSS portal within the Medicaid Enterprise System (MES). Group Home Residential is enrolled under specific taxonomy and provider type codes mapped to DD Waiver services.

Virginia requires all DD Waiver providers to revalidate their Medicaid enrollment every five years. Because this service is carved out of managed care, providers do not need to negotiate network contracts with Cardinal Care MCOs to bill for Group Home Residential Services.

• Enrollment System: MES Provider Services Solution (PRSS) (https://vamedicaid.dmas.virginia.gov/provider).
• Provider Type: Enrolled as Provider Type 070 (Behavioral Health/Developmental Disabilities), though specific taxonomies for DD Residential apply.
• NPI Requirement: A National Provider Identifier (NPI) is required, and the provider must link their exact DBHDS licensed service location to the NPI in PRSS.
• Application Fee: Subject to the federal Medicaid/Medicare institutional provider application fee (approx. $709 for 2024), unless waived via proof of payment to Medicare or another state.
• Revalidation: Mandatory revalidation in PRSS every five years, requiring updated DBHDS licenses and ownership disclosures.

6. Staffing, Training and Background Checks

Virginia mandates stringent training requirements for Direct Support Professionals (DSPs) and DSP Supervisors working in Group Home Residential settings. Training must be completed within 180 days of hire, but specific competencies must be observed and documented much earlier.

Background checks are mandatory and non-negotiable. Any individual with a barrier crime conviction (as defined in the Code of Virginia) is permanently disqualified from employment in a DBHDS-licensed setting.

• Background Checks: Fingerprint-based FBI and Virginia State Police criminal history checks via the DBHDS BIU, plus Virginia Department of Social Services (VDSS) Child Protective Services registry checks if serving minors.
• DSP Orientation: Staff must complete the standardized DBHDS DD DSP Orientation Manual and pass the accompanying test before working independently.
• Competency Checklist: Supervisors must observe and sign off on the DBHDS DSP Competencies Checklist within specific timeframes (e.g., basic health/safety within 30 days).
• Medication Administration: Staff administering medication must complete the 32-hour Virginia Board of Nursing approved Medication Aide training program.
• CPR/First Aid: All direct care staff must hold current, standard CPR and First Aid certifications; online-only courses without an in-person skills check are strictly prohibited.

7. Documentation, Policies and Records

Providers must utilize Virginia's Waiver Management System (WaMS) to interface with Community Services Boards (CSBs), who employ the Support Coordinators/Case Managers. The Support Coordinator drafts the overall Person-Centered Individual Support Plan (PCISP), while the residential provider develops the specific Provider Part V (Plan for Supports).

Daily documentation must explicitly tie back to the outcomes and support activities listed in the Part V plan. DBHDS licensing strictly enforces adherence to human rights reporting timelines via the CHRIS system.

• Plan for Supports (Part V): The provider's specific action plan, entered into WaMS, detailing how they will achieve the goals assigned to residential services.
• Daily Progress Notes: Must be written per shift or per day, detailing the specific supports provided, the individual's response, and any deviations from the routine.
• Quarterly Person-Centered Reviews: The provider must submit quarterly reviews to the CSB Support Coordinator evaluating progress on Part V outcomes.
• Incident Reporting: Serious incidents and human rights complaints must be reported into the DBHDS Computerized Human Rights Information System (CHRIS) within 24 hours.
• Risk Management: Providers must maintain an active Risk Management Plan and conduct quarterly reviews of all serious incidents to identify trends and systemic improvements.

8. Billing, Rates and Claims

DMAS uses a tiered reimbursement system for Group Home Residential Services, determined by the individual's score on the Supports Intensity Scale (SIS). Rates are also geographically adjusted, with a higher rate tier for providers located in Northern Virginia (NOVA) versus the Rest of State (ROS).

Claims are submitted directly to the MES portal as fee-for-service, as these services are excluded from Cardinal Care MCO capitation.

• Procedure Code: H0043 (Supported housing, per diem).
• Tier Modifiers: DMAS requires specific U-modifiers (e.g., U1, U2, U3, U4) appended to H0043 to indicate the individual's assigned SIS tier.
• Geographic Variances: Northern Virginia (NOVA) rates are approximately 15-20% higher than Rest of State (ROS) rates to account for cost of living.
• Billing Frequency: Typically billed weekly or monthly on a per diem basis for days the individual was present in the home or on approved therapeutic leave.
• Bed Hold Days: DMAS allows a limited number of therapeutic leave days (e.g., visits to family) per year where the provider can still bill a retainer rate, provided it is documented in the PCISP.

9. Approval Sequence and Timeline

Becoming a fully enrolled provider in Virginia is a sequential process that routinely takes 6 to 9 months from the initial submission to the ability to bill Medicaid. Providers cannot fast-track DBHDS licensing, and DMAS will not accept a PRSS application without the DBHDS license in hand.

• Phase 1 Submission: Provider submits the Initial Application and policies to DBHDS. Review typically takes 30-60 days.
• Human Rights Affiliation: Concurrent with Phase 1, provider secures OHR approval and LHRC affiliation (30-45 days).
• Phase 2 Preparation: Provider finalizes the physical location, staffing, and zoning.
• Phase 2 Inspection: DBHDS specialist conducts the on-site survey. If clear, a Conditional License is issued (30-60 days).
• Medicaid Enrollment: Provider submits the PRSS application with the new DBHDS license. DMAS processing takes 15-45 days.
• WaMS Setup: Provider registers in WaMS to receive service authorizations from CSB Support Coordinators before any billing can occur.

10. Common Denials and Survey Findings

DBHDS Office of Licensing publishes annual reports on the most frequently cited regulations. For group homes, citations overwhelmingly cluster around medication administration errors, failure to complete DSP competencies on time, and inadequate documentation of the Part V plan.

• DSP Competencies: Licensing frequently cites providers for failing to have the DSP Competencies Checklist completed and signed by a qualified supervisor within the mandated timeframe.
• Medication Errors: Failure to accurately document the Medication Administration Record (MAR) or relying on staff whose Board of Nursing certification has lapsed.
• Late Incident Reporting: Failing to enter a Serious Incident into the CHRIS system within the strict 24-hour window.
• HCBS Settings Violations: Citing homes for restricting food access (e.g., locking pantries/fridges) without a specific, documented, and human-rights-approved behavioral plan.
• Incomplete Background Checks: Allowing staff to work a shift before the DBHDS BIU has issued a final clearance letter.

11. Key Contacts and Resources

Familiarity with the distinct portals for licensing, claims, and waiver management is required to operate a group home in Virginia.

• DBHDS Office of Licensing: (https://www.dbhds.virginia.gov/quality-management/Office-of-Licensing) Contains the Initial Provider Application, regulations, and Phase 1/Phase 2 guides.
• Virginia Medicaid Provider Portal (PRSS): (https://vamedicaid.dmas.virginia.gov/provider) For DMAS enrollment, fee schedules, and direct claims submission.
• Waiver Management System (WaMS): (https://www.dbhds.virginia.gov/developmental-services/wams) The required portal for Part V plan development and service authorizations.
• DBHDS Office of Human Rights: (https://www.dbhds.virginia.gov/quality-management/human-rights) For CHRIS system access and LHRC affiliation protocols.
• Virginia Town Hall: (https://townhall.virginia.gov) The official source for tracking changes to 12VAC35-105 and DD Waiver regulations.

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