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The Short Answer: Two New Hurdles Before You File
Effective November 7, 2025, every applicant pursuing a Priority 1 or Priority 2 service license from the Virginia Department of Behavioral Health and Developmental Services (DBHDS) must complete a 16-module Initial Applicant Orientation and pass a proctored Comprehensive Knowledge Exam with a score of 85% or higher before the application will be reviewed on the priority timeline. Skip either step and the file gets pushed onto the general waitlist behind non-priority services.
Commissioner Nelson Smith’s Office of Licensing issued the memo in October 2025, and the materials went live on the DBHDS Office of Licensing website. Per that page, any applicant submitting a new application for a Priority 1 or Priority 2 service must complete the DBHDS Initial Applicant Orientation Training and successfully complete the proctored Comprehensive Knowledge Exam with a score of 85% or higher.
This is a real filter, not a paperwork formality. Per the October 2025 memo, applications submitted for Priority 1 or 2 services without prior completion of the orientation and exam will not be reviewed under the priority timeline. They land on the waitlist with non-priority services and get pulled in the order received.
For SUD operators planning detox, residential, PHP (which is outpatient, ASAM Level 2.5), or IOP services in Virginia, the orientation-and-exam step is now part of the critical path to licensure, DMAS enrollment under ARTS, and MCO contracting. CARF and Joint Commission accreditation surveys come later. Founders who fail this DBHDS gate never get to the survey window.
What DBHDS Is Actually Requiring
The new structure has two gates. First, the orientation. DBHDS built it as 16 self-paced modules designed to guide applicants through the licensing process. Each module has a video presentation and a self-assessment quiz. Quizzes are untimed, can be retaken, and require an 85% to advance. All 16 modules must be completed within 90 calendar days of starting Module 1, and at least one participant per organization must be the Main Authorized Contact (MAC) or the owner.
Then the exam. Per DBHDS Module 1, “The exam consists of 25 multiple-choice questions, and you must score 85% or higher to pass.” It runs 90 minutes, is proctored live over Microsoft Teams with cameras on the entire time, and admission locks at the scheduled start. Late arrivals reschedule, period. Per Module 1, submitting the completed checklist is required before an applicant can register for the Comprehensive Knowledge Exam and officially complete the Initial Applicant Orientation Training.
DBHDS framed the purpose plainly in its October 2025 memo: the orientation is “specifically designed to facilitate an understanding of DBHDS requirements and support applicants in successfully completing the application process.” Translation for operators: the state is tired of vetting underprepared applicants and is moving the screening upstream.
Which SUD Services Get Caught by Priority 1 and Priority 2
DBHDS sorts services into three buckets. Priority 1 services are essential services with a significant unmet need statewide, and DBHDS prioritizes their development and licensing. Why so aggressive on supply? Look at the demand side.
The Virginia Department of Health logged 18,292 drug overdose emergency department visits in 2024, a 16% decrease from 2023, and 420 Virginia infants younger than one year hospitalized with Neonatal Abstinence Syndrome, a 10% increase from 2023. Before 2024, NAS rates among Virginia infants had been decreasing since 2019. Preliminary 2025 data show 1,196 drug overdose deaths among Virginia residents, a 23% decrease from 2024. The pipeline pressure on residential withdrawal management (ASAM Level 3.7 under the 4th Edition), residential SUD, and intensive outpatient capacity is not theoretical.
The Commonwealth wants more licensed providers, but only ones who can operate at the level CMS, SAMHSA, and the Virginia Department of Medical Assistance Services (DMAS) expect once Medicaid claims start flowing. There is a proof point for the demand. A Health Affairs study by Barnes and colleagues found that after ARTS implementation, “the likelihood of having an emergency department visit in a quarter declined by 9.4 percentage points (a 21.1 percent relative decrease)” among Medicaid beneficiaries with opioid use disorder. Coverage exists. The gate is licensure.
The processing timelines tell you what is on the line. Priority 1 services get assigned within 5 to 10 business days, Priority 2 within 21 business days, and for non-priority services, DBHDS pulls at least one applicant per month from the waitlist. Per Module 4, for non-priority services it could take a year or longer to become licensed. The orientation-and-exam gate is what stands between an applicant and the 5-to-21-business-day lane.
How Operators Should Sequence This
Treat the 16 modules as a design exercise, not a checkbox. The orientation walks through eligibility, provider responsibilities, the application phases, and the regulatory frame under 12VAC35-105. Use each module as a prompt to stress-test the policy manual, staffing plan, physical plant, and budget against the language DBHDS uses. The “Sample Acceptable” and “Sample Unacceptable” policies are calibration tools; use them.
Pick the MAC carefully. This person should understand the proposed level of care, hold real authority over policy and budget, and be willing to own the CONNECT Provider Portal as the central liaison with DBHDS. Whoever sits the exam also carries institutional memory into survey prep and the first EOC tour. Founders should not delegate this to a contractor who will disappear after licensure. Operators in Tennessee and Florida have regretted that choice when the surveyor focus shifts mid-application and no one inside the building actually understands the regulations.
Sequence the payer track in parallel, not after. Per DMAS, on April 1, 2017, Virginia’s Medicaid Program launched an enhanced substance use disorder treatment benefit, Addiction and Recovery Treatment Services (ARTS). ARTS expands access to a comprehensive continuum of addiction treatment services for all enrolled members in Medicaid, FAMIS and FAMIS MOMS, including community-based addiction and recovery services and coverage of inpatient detoxification and residential SUD treatment. Providers must submit a DBHDS license for the intended level of care to the DMAS Provider Services Solution (PRSS) vendor and each of the Medicaid health plans before credentialing and contracting can start. Your pro forma assumptions about when Medicaid revenue actually begins should now include the orientation, the exam, the priority review window (5 to 21 business days for assignment), and DMAS plus MCO credentialing on the back end, which routinely runs 90 to 120 days per plan. If the model assumes first ARTS revenue at month four, rebuild it.
One more sequencing point. Per the DBHDS Licensing Information page, initial applications and modification applications must be submitted within 90 days of beginning the application process. The clock is real. Plan the exam date around when policies, attachments, and staffing documentation will actually be ready for submission, not when the orientation finishes.
What This Tells You About Where Virginia Is Heading
Virginia is doing what a handful of states have started doing quietly: raising the floor on who gets to enter the behavioral health system. DBHDS oversees the licensing and regulatory compliance of providers delivering mental health, developmental disability, and substance use services across Virginia, and demand still outstrips supply in most regions for SUD residential and withdrawal management beds. Rather than open the gates wider, DBHDS is narrowing the gate and grading on preparedness before anyone touches a license number.
This mirrors what the DEA is doing with new buprenorphine prescriber oversight and what the HHS Office of Inspector General has signaled on behavioral health enrollment fraud. The regulatory floor is rising in more than one direction at once.
For the operators AHS works with in Virginia, the takeaway is unglamorous. Founders and CEOs who treat the orientation as a design tool finish licensure faster, with cleaner policies and fewer policy-review revisions. Founders who treat it as a hurdle to clear with the cheapest available warm body lose months on the waitlist and rework. The orientation is now the cheapest mock survey a founder will ever get from DBHDS. Use it.
If you are weighing Virginia against other states for the next site, run the math honestly. A Priority 1 service assigned in 5 to 10 business days is still one of the more predictable timelines on the East Coast, as long as the MAC passes the exam on the first attempt. A failed exam plus a re-test window plus a 90-day application clock can push a planned January go-live to May. At roughly $80,000 to $120,000 per month in pre-revenue burn for a mid-sized residential SUD startup, that delta is the difference between a workable pro forma and a capital call.
Frequently asked questions
When does the new DBHDS orientation and exam requirement take effect, and who has to comply?
The requirement took effect November 7, 2025. Per the DBHDS Office of Licensing October 2025 memo, any organization submitting a new application for a Priority 1 or Priority 2 service must complete the Initial Applicant Orientation Training and pass the proctored Comprehensive Knowledge Exam with a score of 85% or higher. At least one participant must be the Main Authorized Contact or the owner of the organization. Materials and current exam dates are posted on the DBHDS Office of Licensing website.
What happens if we submit a Priority 1 or Priority 2 application without completing the exam?
Per the October 2025 DBHDS memo, applications submitted without prior completion of the orientation and Comprehensive Knowledge Exam will not be reviewed under the priority timeline. They land on the waitlist with non-priority services and are pulled in the order received. Per DBHDS Module 4, for non-priority services it could take a year or longer to become licensed.
How does the orientation timeline affect Virginia Medicaid ARTS enrollment?
DBHDS licensure is a prerequisite to DMAS enrollment under ARTS, which Virginia launched on April 1, 2017. ARTS covers a comprehensive continuum including outpatient, IOP, PHP (an outpatient level), residential SUD, and inpatient withdrawal management for Medicaid, FAMIS, and FAMIS MOMS members. Providers must submit the DBHDS license for the intended level of care to the DMAS Provider Services Solution (PRSS) vendor and each Medicaid health plan before credentialing and contracting can start, and MCO credentialing routinely runs another 90 to 120 days per plan.
What exactly does the Comprehensive Knowledge Exam look like?
It is a 90-minute proctored virtual exam delivered through Microsoft Teams with cameras required on for the full session. Per DBHDS Module 1, the exam consists of 25 multiple-choice questions, requires 85% or higher to pass, and is scored automatically at completion. Applicants cannot register for the exam until DBHDS has received and approved the completed Initial Applicant Orientation Training Checklist.
References
- DBHDS Office of Licensing, Memo: Initial Applicant Orientation for Priority 1 and Priority 2 Services (October 2025)
- Virginia DBHDS, Licensing Information for Providers and Applicants
- DBHDS Initial Applicant Orientation, Module 1: Overview of the Initial Applicant Orientation Process
- Virginia Department of Health, Drug Overdose and Substance Use Data (2024 and preliminary 2025)
- Virginia DMAS, Addiction and Recovery Treatment Services (ARTS)
- Virginia DMAS, Behavioral Health for Providers
- Barnes AJ, et al., “Hospital Use Declines After Implementation Of Virginia Medicaid’s Addiction And Recovery Treatment Services,” Health Affairs