Kentucky’s AODE regulations require every nonhospital-based alcohol and other drug treatment entity to obtain a license from the Cabinet for Health and Family Services before providing any care, and the core rules live in 908 KAR 1:370. That regulation, along with 908 KAR 1:372 for residential programs and 908 KAR 1:374 for narcotic and office-based opioid treatment, controls how facilities are licensed, how staff are credentialed, how records are kept, and how patients are protected. Fall short and the cabinet can impose fines up to $10,000 per violation, suspend or revoke the license, or refer the matter for criminal prosecution.
The Three Regulations That Govern AODEs
Kentucky splits its AODE framework across three companion regulations, and which ones apply depends on what services the facility offers.1Kentucky Legislative Research Commission. 908 KAR 1:370 – Licensing Procedures, Fees, and General Requirements for Nonhospital-Based Alcohol and Other Drug Treatment Entities
- 908 KAR 1:370 is the baseline. It covers licensing procedures, fees, background checks, staff qualifications, client records, and general requirements that apply to every outpatient and residential AODE.
- 908 KAR 1:372 layers on the residential-specific standards: physical environment, staffing ratios, and structured activity minimums.
- 908 KAR 1:374 governs narcotic treatment programs and office-based opioid treatment on top of the general standards.
A facility that runs both residential and outpatient programs has to meet the standards in both 908 KAR 1:370 and 908 KAR 1:372, and cabinet inspectors verify compliance across every regulation that applies. One boundary worth flagging: community mental health centers operate under 902 KAR 20:091, but any community mental health center that wants to provide residential substance use disorder treatment must obtain a separate AODE license under 908 KAR 1:370.2Kentucky Legislative Research Commission. 902 KAR 20:091 – Facilities Specifications, Operation and Services; Community Mental Health Center
Getting and Keeping the License
No person or organization may operate a health facility in Kentucky without a license from the cabinet, per KRS 216B.105.3Justia Law. Kentucky Revised Statutes 216B.105 – License Procedure For AODEs, the application goes in with a $500 licensure fee. Outpatient programs that operate extension sites separate from the parent facility pay an additional $80 per extension site.1Kentucky Legislative Research Commission. 908 KAR 1:370 – Licensing Procedures, Fees, and General Requirements for Nonhospital-Based Alcohol and Other Drug Treatment Entities
The license renews annually with a new application and the same fee. Once issued, it has to be posted conspicuously in a public area of the facility at all times. Every AODE also needs a governing authority that is legally responsible for management, operations, and financial viability. Denying access to cabinet representatives who show up to inspect for compliance is grounds for denial or revocation, so plan accordingly.
Staff Credentials, Training, and Background Checks
Clinical Services Supervisors
A clinical services supervisor has to complete 12 hours of specialized clinical supervision training within six months of taking the position. After that, the supervisor needs at least three hours of clinical supervision training and at least 10 hours of alcohol and other drug abuse counseling training every year.1Kentucky Legislative Research Commission. 908 KAR 1:370 – Licensing Procedures, Fees, and General Requirements for Nonhospital-Based Alcohol and Other Drug Treatment Entities Supervisors who are licensed or certified health care professionals rather than credentialed alcohol and drug counselors face two extra requirements: 80 hours of substance use counseling training within four years before or two years after assuming the role, plus 4,000 hours of post-degree work experience in the field.
Clinicians and Counselors
Every clinician needs at least 10 hours of alcohol and other drug abuse counseling training annually. Clinicians providing case management services need an additional 12 hours of specialized case management training within six months of taking on that responsibility.
Counselors are credentialed through the Kentucky Board of Alcohol and Drug Counselors, which issues the Certified Alcohol and Drug Counselor (CADC) credential and the Licensed Clinical Alcohol and Drug Counselor (LCADC) license for those with qualifying master’s degrees. Under 201 KAR 35:040, CADC and LCADC holders each need 60 hours of continuing education over each three-year certification or licensure period, including at least six hours in ethics. Peer support specialists registered through the Board need 10 continuing education hours each year. At least half of the required hours must come from live or face-to-face presentations, and unused hours don’t carry over. Every credential holder also has to complete at least six hours of training in suicide assessment, treatment, and management.4Kentucky Legislative Research Commission. 201 KAR 35:040 – Continuing Education Requirements
Peer Support Specialists and Case Managers
Peer support specialists must complete a state-approved 30-hour training program, hold a high school diploma or GED, be at least 18 years old, and demonstrate a pattern of recovery from addiction or mental health conditions. Case managers are capped at no more than 30 unique clients on the caseload.
Background Checks
All staff whose duties involve providing services to clients or having one-on-one contact must undergo a criminal record check through the Administrative Office of the Courts or the Kentucky State Police at initial hire, and every year after. A staff member cannot work at the facility if they have a conviction or guilty plea for a sex crime, a criminal offense against a minor, or a felony involving neglect or abuse of a child.
Federal Training Under the MATE Act
Any DEA-registered practitioner at an AODE, other than veterinarians, must also complete a one-time eight-hour training on treating patients with opioid or other substance use disorders. This federal requirement under the Medication Access and Training Expansion (MATE) Act took effect June 27, 2023 for all initial and renewal DEA registrations.5American Society of Addiction Medicine. DEA Education Requirements The hours don’t have to come from a single course; practitioners can accumulate them across multiple trainings. Practitioners who already held board certification in addiction medicine or addiction psychiatry, or who completed the earlier DATA-2000 waiver training, are treated as already having satisfied the requirement.
Operational Standards
Outpatient Records and Treatment Plans
Every AODE must follow written policies governing admission, treatment planning, and discharge. Treatment plans for outpatient clients have to be entered into the record within 30 days of admission. After a client’s death or discharge, the completed record goes to an inactive file and must be retained for six years, or three years after a minor reaches the age of majority, whichever is longer.
Residential Facility Standards
Residential AODEs face the most prescriptive requirements in the framework under 908 KAR 1:372, and this is where facilities most often trip up during inspections.6Kentucky Legislative Research Commission. 908 KAR 1:372 – Residential AODE Requirements
The physical environment rules call for at least 120 square feet of space per client, one toilet and one sink for every eight clients, and one shower or tub for every 15 clients. Indoor temperatures must stay between 72 and 82 degrees Fahrenheit, and if indoor air reaches 82 degrees for four consecutive hours the facility must have a written heat emergency plan in place.
Adult and adolescent clients must be physically separated by floor, wing, or other barriers, and male and female sleeping quarters need the same kind of separation. Residential programs must provide at least six hours of structured activities daily, with a minimum of 10 hours per week of individual, group, or family counseling. Group counseling sessions cannot exceed 12 clients per clinician. Treatment plans for residential clients have to be entered into the record within 72 hours of admission.
Staffing runs 24/7. At least one staff member must be on duty and awake at all times, trained in crisis intervention, CPR, and standard first aid. Adolescent residential programs carry stricter ratios: at least one staff member within sight and sound for every 10 adolescent clients during waking hours and every 20 during sleeping hours. Adolescent residents are also limited to two hours of entertainment-based screen time per day.
Controlled Substances and Disposal
AODEs that handle controlled substances follow KRS Chapter 218A. Practitioners who dispense opioids, benzodiazepines, barbiturates, or amphetamines must inform patients about proper disposal of unused medications and either make nontoxic disposal products available or provide a secure on-site disposal receptacle. Violations of these disclosure requirements carry fines of $25 for a first offense, $100 for a second, and $200 for each subsequent violation.7Kentucky Legislative Research Commission. Kentucky Code 218A.170 – Sale, Distribution, Administration, or Prescription of Controlled Substances
Patient Privacy and the 2026 Part 2 Changes
Substance use disorder records carry some of the strongest privacy protections in American health care. Under KRS 222.271, the administrator of every treatment program must keep a confidential record of treatment for each patient, and patients retain the right to retain their own physician, consult privately with an attorney, receive visitors, and communicate freely. Communications may not be censored or read without the patient’s consent.8Kentucky Legislative Research Commission. Kentucky Code 222.271 – Confidential Record of Treatment, Rights of Patient
At the federal level, 42 CFR Part 2 restricts when substance use disorder records can be shared. With limited exceptions for emergencies, records generally cannot be disclosed without written consent or a court order.9U.S. Department of Health and Human Services. Understanding Confidentiality of Substance Use Disorder Patient Records
A major final rule overhauling Part 2 took effect on February 16, 2026, and every Kentucky AODE should already have updated policies in place.10U.S. Department of Health and Human Services. Fact Sheet – 42 CFR Part 2 Final Rule The rule brings Part 2 closer to HIPAA in several concrete ways. Facilities can now use a single consent form covering all future uses and disclosures for treatment, payment, and health care operations, instead of separate consents for each disclosure. The HIPAA Breach Notification Rule now applies to Part 2 records, so facilities must notify patients and HHS when a breach occurs. The old criminal penalties specific to Part 2 have been replaced with the civil and criminal enforcement framework that applies to HIPAA violations. Part 2 records and testimony still cannot be used in civil, criminal, administrative, or legislative proceedings against a patient without consent or a court order.
A new category of SUD counseling notes, analogous to HIPAA psychotherapy notes, requires separate specific patient consent and cannot be disclosed under a broad treatment/payment/operations consent. Facilities are not required to segregate Part 2 records from other medical records. And facilities must provide patients with a Patient Notice that aligns with HIPAA’s Notice of Privacy Practices, along with new patient rights to request an accounting of disclosures and restrictions on certain disclosures.
Telehealth Prescribing for MAT
For AODEs offering medication-assisted treatment, the federal telehealth rules are unusually favorable in 2026, but the window has a deadline. The DEA extended its pandemic-era telemedicine flexibilities through December 31, 2026, letting DEA-registered practitioners prescribe Schedule II through V controlled substances via audio-video telehealth encounters without ever having conducted an in-person evaluation. For buprenorphine and other Schedule III-V narcotics used in opioid use disorder treatment, audio-only encounters are also permitted.11Drug Enforcement Administration. DEA Extends Telemedicine Flexibilities to Ensure Continued Access to Care
Two final rules published in January 2025, covering buprenorphine treatment via telemedicine and continuity of care for Veterans Affairs patients, sit alongside the temporary extension. Those permanent rules impose more requirements, so practitioners currently have the option to operate under whichever framework is less restrictive. Start preparing now for what happens after December 31, 2026, when the flexibilities are scheduled to expire and the more stringent permanent rules become the only option.
Inspections
The Office of Inspector General within the Cabinet for Health and Family Services conducts both scheduled and unannounced inspections. Under 902 KAR 20:008, within three months of receiving a provisional license the OIG performs an unannounced on-site inspection to verify compliance with every applicable statute and regulation.12Kentucky Legislative Research Commission. 902 KAR 20:008 – License Procedures and Fee Schedule Periodic reviews continue throughout the life of the license.
Inspectors look at physical conditions, treatment procedures, record-keeping, staffing levels, and confidentiality practices. Medical and administrative records are reviewed for proper documentation of treatment plans, progress notes, and discharge summaries. Violations identified during the provisional period or any subsequent review push the facility into a correction process with a defined timeline. Missing that window leads to escalating enforcement.
Penalties for Noncompliance
Consequences range from corrective action plans to criminal prosecution, depending on severity.
Under KRS 216B.990, anyone who willfully operates a health facility without a license, or continues operating after suspension or revocation, faces fines between $500 and $10,000 per violation. Each day of continuing violation counts as a separate offense, so costs compound quickly.13FindLaw. Kentucky Revised Statutes 216B.990 – Penalties
The cabinet can deny or revoke a license outright if it finds a substantial failure to comply with AODE licensure regulations under 908 KAR Chapter 1. Serious deficiencies typically trigger a corrective action plan requiring immediate remediation. Persistent failure to meet patient care standards or recordkeeping obligations can result in permanent revocation. Fraudulent billing or illegal distribution of controlled substances moves the matter into criminal territory under KRS Chapter 218A, with possible imprisonment on top of additional fines. For individual credential holders, noncompliance with continuing education requirements can lead the Board of Alcohol and Drug Counselors to refuse renewal or suspend or revoke the credential.