NAICS 6232

Residential Intellectual & Developmental Disability, Mental Health, & Substance Abuse Facilities

NAICS 6232: Residential intellectual and developmental disability, mental health, and substance abuse facilities providing 24-hour treatment and care services.

Industry at a Glance

Sector-wide aggregates across all businesses classified under NAICS 6232 (2017 classification frame). For specific sub-industries within this sector, see the individual reports below.

Employment
770K
US Census CBP · 2023 · NAICS 2017
Establishments
44K
US Census CBP · 2023 · NAICS 2017
Annual Payroll
$32.6B
US Census CBP · 2023 · NAICS 2017
Avg Annual Wage
$42,344
Derived from US Census CBP · 2023 · NAICS 2017
Market Size
$59.2B
US Census Economic Census · 2022 · NAICS 2017

Industry Overview

NAICS 6232 encompasses residential facilities that provide 24-hour care, treatment, and support services for individuals with intellectual and developmental disabilities, mental health conditions, and substance abuse disorders. These facilities operate as an essential component of the behavioral health and social services infrastructure, offering structured residential environments where clients receive therapeutic interventions, psychiatric care, counseling, vocational training, and daily living support from trained clinical and support staff. The industry serves vulnerable populations requiring intensive, round-the-clock supervision and treatment that cannot be adequately provided in outpatient or community-based settings, making it a critical safety net within the broader healthcare system.

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Market sizing, workforce analysis, competitive landscape, regulatory environment — all sourced from Census, BLS, FRED, and SEC EDGAR.

Industry Trends

01

Increasing emphasis on trauma-informed care and evidence-based treatment modalities, with facilities integrating cognitive-behavioral therapy, dialectical behavior therapy, and motivational interviewing into their program structures.

02

Growing adoption of technology services for resident monitoring, staff scheduling, electronic health records, and telehealth psychiatric consultations to improve operational efficiency and access to specialized clinical expertise.

03

Expansion of integrated dual-diagnosis treatment programs addressing the co-occurrence of mental health and substance abuse disorders, reflecting clinical best practices and payer requirements.

04

Rising pressure to transition residents toward community integration and independent living through supported employment and housing programs, driven by regulatory requirements and person-centered care philosophies.

05

Intensifying workforce challenges requiring higher wages, improved working conditions, and expanded training programs to address recruitment and retention of qualified direct care and clinical staff.

Frequently Asked Questions

What is NAICS 6232? ▾
NAICS 6232 classifies residential facilities providing 24-hour care and treatment services for individuals with intellectual and developmental disabilities, mental health disorders, and substance abuse issues. These are licensed facilities that combine residential accommodation with therapeutic programming, clinical treatment, and support services. They serve as intermediate care settings between hospital-based treatment and community-based outpatient services.
What types of facilities are included in NAICS 6232? ▾
The industry includes residential treatment facilities for adolescents and adults with mental health conditions, group homes for individuals with intellectual and developmental disabilities, residential substance abuse treatment programs, and mixed-diagnosis facilities serving multiple populations. Facilities range from small group homes to larger residential treatment centers with multiple buildings and specialized therapeutic programs.
What are the primary sources of revenue for these facilities? ▾
Facilities generate revenue through Medicaid and Medicare reimbursement (typically the largest payer), private insurance, private pay from families, state and local government contracts, federal grants, and philanthropic support. Reimbursement models vary significantly by state and payer, with Medicaid covering the majority of residents in many facilities.
What regulatory requirements govern NAICS 6232 facilities? ▾
Facilities must comply with state licensing regulations, Medicare and Medicaid Conditions of Participation, HIPAA privacy and security requirements, state-specific staffing ratios, mandatory reporter laws, and various accreditation standards. Requirements vary significantly by state and the specific populations served, requiring ongoing compliance management.
What are the major operational challenges in this industry? ▾
Key challenges include workforce recruitment and retention of qualified clinical staff, managing complex resident needs and behavioral incidents, navigating variable and often inadequate reimbursement rates, maintaining compliance with evolving regulations, and balancing person-centered care with safety and liability management. These challenges are compounded by limited capital availability and competition for skilled professionals.

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