ARMHS changes in 2027: hour limits, prior authorization, 245I licensure

The ARMHS changes in 2027 are the most significant since chapter 245I took effect in 2022. Laws of Minnesota 2026, chapter 121 adds Minn. Stat. § 256B.0623, subd. 15, which states that effective January 1, 2027, Adult Rehabilitative Mental Health Services (ARMHS) "must not exceed four hours per week per recipient, with a maximum of 18 hours per month," and that "prior authorization is required for services exceeding 200 hours per year."

The same chapter changes how ARMHS providers are regulated. Beginning January 1, 2028, an ARMHS provider must hold a license under a new § 245I.22 and chapter 245A instead of today's Department of Human Services (DHS) certification, and § 256B.0623, subds. 2, 4, 5, 6, and 9 are repealed on that date.

This guide explains what changes and when, how the new limits interact with the 300-hour authorization threshold in the current DHS ARMHS manual, what agencies should do now, what is still unknown, and the other 2026 dates that sit around these changes. It reflects the session law as published on revisor.mn.gov as of September 2026. For background on the service itself, see what ARMHS is.

ARMHS timeline: what Laws 2026, chapter 121 changes and when

The 2027 billing limits: four hours per week, 18 hours per month, 200 hours per year

Section 256B.0623, subd. 15 is two sentences long, and both matter. The first sets hard limits: no more than four hours per week per recipient, and no more than 18 hours per month. The second sets an authorization trigger: prior authorization above 200 hours per year.

In H2017 15-minute units, the limits translate as follows.

Three things stand out. First, the weekly cap and the monthly cap work together: four hours in each of five weeks that fall in one month would be 20 hours, so the 18-hour monthly cap binds in a five-week month. Second, a client who receives the full four hours every week reaches 200 hours in the fiftieth week, so the annual authorization threshold is reachable at the weekly maximum. Third, the statute uses "services under this section," which on its face covers every ARMHS service, not only H2017. As of September 2026 DHS has not said how the limit is counted across H2017, functional assessment, treatment plan, medication education, and community intervention codes, so plan conservatively and watch for guidance.

How the new limits interact with the current 300-hour threshold

As of September 2026, the DHS ARMHS provider manual requires authorization for more than 300 hours per calendar year of H2017, H2017 HM, and H2017 HQ combined, requested on the MHCP Authorization Form (DHS-4695) together with the Adult Mental Health Rehabilitative Services Authorization Form (DHS-4159A). The manual also requires prior authorization for ARMHS provided concurrently with assertive community treatment (ACT) or intensive residential treatment services (IRTS).

The statute's 200-hour threshold is lower than the manual's 300-hour threshold, and a statute controls over a manual. The practical reading, until DHS says otherwise: from January 1, 2027, request authorization before a client's annual ARMHS total passes 200 hours, and treat the 300-hour figure as superseded once the manual is updated. Under the four-hour weekly cap, 300 hours in a year is no longer reachable in any case (52 weeks at four hours is 208 hours), so the 300-hour threshold becomes moot in practice even before the manual changes.

Compliance note: an authorization protects payment above the threshold; it does not lift the weekly and monthly caps. Nothing in subd. 15 says an authorization can exceed four hours per week or 18 hours per month. Until DHS publishes guidance, schedule within the caps and use authorization only for the annual total.

The ARMHS billing guide covers how units are counted from note times, which is what the caps will be measured against.

The 2028 move to licensure under chapter 245I

Article 7 of chapter 121 rewrites how nonresidential mental health services are regulated, and ARMHS is first on the list. The pieces that matter for an ARMHS agency:

• New § 245A.044. Beginning January 1, 2028, providers of ARMHS, children's therapeutic services and supports, crisis response services, and certified community behavioral health clinic services must obtain a license under chapter 245A and comply with chapter 245I and the MHCP rules in Minn. R. 9505.0170 to 9505.0475 and 9505.2160 to 9505.2245.
• Phased transition. Beginning July 1, 2027, DHS must begin issuing licenses and must transition currently certified providers on a phased schedule, communicated at least three months before the application is made available. Applicants must have held an approved § 245I.011 certification for at least 90 days before applying.
• Continuity. A certified provider that submits an application before January 1, 2028 may keep operating until DHS issues a licensing decision. A provider that fails to apply within six months of the application being made available is disenrolled from ARMHS reimbursement.
• New § 245I.22. ARMHS gets its own section in chapter 245I with definitions of basic living skills (13 listed skill areas), community intervention, medication education, and transition to community living; the four service components a provider must be able to deliver; staff qualifications (mental health professional, certified rehabilitation specialist, clinical trainee, behavioral health practitioner, mental health certified peer specialist, mental health rehabilitation worker); the functional assessment and level of care requirement; and the two-to-ten-client group rule.
• Repeals. Section 256B.0623, subds. 2 (definitions), 4 (provider certification), 5 (staff qualifications), 6 (required supervision), and 9 (functional assessment and level of care) are repealed January 1, 2028. Subds. 1, 3 (eligibility), and 12 are amended, and eligibility criteria are unchanged in substance.

For the eligibility rules that carry forward, see the ARMHS eligibility guide. The Revalidate 2026 and enrollment freeze guide covers the enrollment record that DHS will check against the licensure application.

What ARMHS agencies should do now

Scheduling

Run a report of every client's ARMHS hours by week and by month for the last six months. Any client above four hours in a week or 18 hours in a month needs a plan change before January 1, 2027. Build the caps into the schedule so a fifth contact in a week cannot be booked without a supervisor override.

Authorization tracking

Track each client's annual ARMHS hours from January 1, 2027 against the 200-hour threshold, with an alert early enough to submit DHS-4695 and DHS-4159A before the client crosses it. Keep the 300-hour threshold in the same tracker until DHS retires it. Record ACT and IRTS concurrency authorizations in the same place.

Caseload planning

If most of a caseload is at or near four hours per week, total billable hours per client fall, and staff schedules need more clients per worker or fewer hours per worker. Model it now. Use 180-day treatment plan reviews between now and December to bring frequencies into line rather than cutting hours on January 1.

Client communication

Clients and referral sources should hear about the limits from the agency, not from a denied claim. Explain what four hours per week means for the client's schedule, what changes at the next plan review, and that authorization is a payment step, not a change in eligibility.

Licensure readiness

Confirm the agency's § 245I.011 certification is current, since it must be held for at least 90 days before the licensure application. Review policies and procedures against chapter 245I, because § 245A.044 requires the license holder to notify clients and staff of the policies in the application. Check that owners, operators, and direct-contact staff are ready for the expanded NETStudy 2.0 background studies.

What is still unknown

As of September 2026, the following have not been published, and agencies should not guess at them:

• How DHS will count the caps. Whether "services under this section" includes functional assessment, treatment plan, medication education, and community intervention codes, or only H2017, and whether telehealth and group time count the same way.
• Whether authorization can exceed the caps. The statute is silent; DHS guidance may address exceptions.
• The updated manual and forms. DHS has not yet replaced the 300-hour threshold or revised DHS-4159A for the 200-hour rule.
• The licensure schedule and fee. DHS must announce the phased schedule at least three months before the application opens; no ARMHS licensure fee has been published in DHS guidance yet, so check the licensing page rather than budgeting a figure.
• Electronic visit verification (EVV). Article 10 of the same chapter adds ARMHS to the list of services in the EVV definition in § 256B.073. That section carries no separate effective date and DHS has not issued EVV guidance for ARMHS. Watch the DHS EVV page before assuming anything.
• Rulemaking. Chapter 121 proposes coding for new law in chapters 245A and 245I; any conforming rule changes will come later.

How Trustora helps

Trustora's compliance engine tracks the limits in this guide per client: weekly and monthly ARMHS hours against the four-hour and 18-hour caps, annual hours against both the current 300-hour and the 2027 200-hour authorization thresholds, and ACT or IRTS concurrency authorizations, with alerts before a threshold is reached. Scheduling shows a client's remaining hours for the week and month, and the pre-claim gate holds any H2017 line that would exceed a cap or lacks a required authorization.

For the licensure transition, the one-click DHS audit binder assembles policies, staff qualifications, background study records, supervision logs, and client records for any date range, which is the same material a licensure application and site visit will ask for. See the platform overview or contact Trustora to walk through your 2027 caseload numbers.