Why Ghosts haunt mental health networks
BOO! It’s Halloween season!
Time to talk about ghosts… Mental health ghost networks, that is.
My passion, and a quarter-century of experience, is in easing the administrative burdens of clinicians that directly contribute to burnout and subsequent withdrawal from the insurance networks. You can read about my journey here. So I’ve learned a few things about “ghost” or “phantom” networks.
Yet I read articles authored by so-called “experts,” (probably highly paid) and here in the real world, I’m shaking my head in disbelief.
It’s time for some plain talk.
What is a ghost network?
To compare pumpkins to pumpkins, and not pumpkins to apples, let’s ignore political rhetoric and look at what a “ghost” network really is.
A “ghost” network is one in which the insurance company directory lists lots of names of “in-network” clinicians. With plenty of names, there should be no trouble finding an in-network therapist and making an appointment. Right?
In theory. In reality, many people aren’t able to find in-network therapists with openings.
When a supposedly adequate, or even “full,” network turns out to be one in which a significant number of enrollees in the plan can’t find a participating therapist … that’s a “ghost” network.
Why do mental health ghost networks exist?
More reasons than you might realize.
It’s not – and never has been – as simple a fix as insisting if only providers would update their directory entries once a quarter…
In my view from the “trenches,” these are the major causes of ghost networks:
- Inadequate reimbursement rates
- Econ 101: Basic Law of Supply and Demand
- Lengthy process for joining insurance networks and lack of transparency.
- Difficulties with claims process / getting paid / admin issues
Breaking it down…
Inadequate reimbursement rates
Payers – via highly paid lobbyists and C-Suite types – imply that therapists are “greedy,” and that in-network reimbursement rates are adequate.
Is this true? Let’s crunch some numbers and find out.
In 1998, when I began billing, a masters-level in-network clinician could expect to receive a contracted rate of $50-65 for a 45-minute psychotherapy visit. The usual in-network reimbursement for doctoral-level psychologists was $60-75. (Note: contract rates vary WIDELY by payer and region).
A quick Google search shows that $60 in 1998 had the same purchasing power as $112.31 today. $70 in 1998 is about $131.85 today.
More quick searching: the cumulative inflation rate since 1998 has been 88.36% according to the Bureau of Labor Statistics. What you could buy for $1 in 1998, now requires $1.88. Prices have almost doubled in 25 years.
I’m a biller, practice coach, and consultant with a clinical background – not an economist. But it doesn’t take an advanced degree in economics to understand the reality here.
To keep pace with inflation, reimbursement rates should have been steadily rising during the past 25 years.
Did they rise? A bit, here and there, a couple of dollars per procedure code. Often not without significant begging, wheedling, cajoling, agitating, squeaky-wheeling, and/or pestering on the part of clinicians.
I began to see slight yearly increases in in-network reimbursement around 2017-2018, in some, but not all, geographic areas. But most of these increases were minor ($5/procedure or even less). None that I’m aware of were significant enough to adjust for the staggering inflation of the last 25 years.
What are clinicians paid today?
Certainly not 1.88 times what they were in 1998. In fact, I bill some plans today that still pay master-level clinicians $60 and PhDs $70.
From my data based on managing practices in 14 states, most master-level reimbursement rates are below $112 and most doctoral-level compensation is below $131, even for 60-minute psychotherapy visits.
This quick mathematical exercise has a startling conclusion if I’m understanding the economics correctly. In terms of actual buying power, 2023 levels of reimbursement to in-network clinicians in private practice could be as much as 88% less than in 1998.
Before leaving this topic, I’ll say one thing more. In some regions, Medicare and even Medicaid – which are typically regarded as paying too little – pay more than private insurance.
Let that sink in.
Medicaid?!? Yes. Really!
Question to non-clinicians and policymakers:
Would YOU stay at a job where you effectively make less and less each year?
No? – Then why do you expect that mental health professionals should?
Everything else in the remainder of this blog contributes to mental health ghost networks. However, in my opinion, changes to any of the remaining contributing factors won’t accomplish much without significant increases to insurance reimbursement of in-network clinicians.
Econ 101: Basic Law of Supply and Demand
Having billed and/or consulted in close to half the states in the last 25 years, I’ve identified trends relating to the effect of geography on reimbursement.
- Clinicians are paid more in rural areas (less supply = rural clinicians need more incentive to contract with payers)
- Clinicians are paid the least in the most expensive markets in the US. (more supply = less incentive required)
Let’s look at one example.
- 2023 rates for master-level clinicians in NYC (for a 60-minute visit), are 62% of those in Albuquerque, NM, for one plan.*
- According to salary.com, Albuquerque’s cost of living is 46% lower than NYC’s.
Run that by me again?
I know. It makes no sense, but…
It’s 46% less expensive to live and work in Albuquerque than in New York City, but clinicians in Albuquerque are paid 38% more.*
Same education, same procedure.
*I’m not able to call out specific payers – reimbursement data is confidential according to the terms of in-network contracts.
From the perspective of a client seeking services, it is harder to find an in-network clinician in a more populous, expensive area of the US than one would think. Because clinicians simply cannot afford to participate!
That’s not to say that the rural areas don’t have issues; they do. But sparse networks in rural areas have more to do with the actual lack of clinicians, which has been well-documented elsewhere.
Now let’s look at it from the perspective of the clinician to see supply/demand in action:
Clinicians in private practice are small business owners like any other. They must make choices about who they will serve due to the overwhelming post-pandemic demand for services.
It’s not like they can treat an infinite number of clients. Professionals who see 20-25 clients per week are considered “full-time” in mental health. When caseloads rise too high, and stay that way indefinitely, burnout is the inevitable result.
There are many considerations a therapist uses to determine whether to accept a new client. Payment method is generally not the most important one. Not accepting a new client is most often due to an assessment that the client might be better treated by another clinician. Or the therapist simply has a full caseload.
But, looking only at the economic aspect, think about it like this.
In the COVID and post-COVID environments, therapists have been literally inundated with calls and electronic inquiries from potential new clients. To the point where many of them are so exhausted, they don’t have time to respond to all the inquiries. And if their caseloads have risen in response to the overwhelming need, after more than 3 years, they are burning out quickly.
If you’re a therapist, sorting through multiple inquiries, and one client indicates they’ll pay cash up front, full fee, and another client says, “I have XYZ insurance,” who do you think the therapist will choose – assuming the clinical considerations are equal?
Attention, Insurance Payers!
Before you scold clinicians about how it’s in the participation contract not to “discriminate” against potential clients who indicate using their insurance … and before you start “secret shopping,” consider this:
Your network clinicians are not employees!!
Do you REALLY think your contract trumps IRS rules regarding independent contractors? Want to take it to the courts and face a class-action suit to find out? If the judgment goes against you, are you willing to pay past-due taxes and penalties?
I would love a legal / tax opinion. The IRS definition of an independent contractor seems to be in direct contradiction with insurance payer contract terms.
The IRS asks:
“Does the company control or have the right to control what the worker does and how the worker does his/her job?”
If yes…then it’s NOT an independent contractor relationship – it’s employer/employee.
Participating-provider contracts usually include this provision:
“Provider will accept Members as new patients on the same basis as Provider accepts non-Members.”
Membership in an insurance plan is NOT a protected class under the Civil Rights Act, the Americans with Disabilities Act, or any other federal law prohibiting discrimination.
Do legal definitions of “discrimination” really apply here?
Ask a lawyer.
Another question for a lawyer: does signing a contract which includes this clause remove an independent clinician’s right to operate their business to their own economic advantage?
My layperson’s opinion says it should not. In a capitalist economy, a solo entrepreneur should have as much right to conduct a profitable business as a billion-dollar national enterprise.
Given the numbers I previously discussed, it’s not sustainable to operate a practice relying solely on in-network reimbursement rates.
From the clinician’s perspective, it can be advantageous to stay in a network while limiting how many clients with that insurance plan you accept. It gives existing clients the ability to afford care. It also serves as a practice safety net; if self-pay referrals dry up, a low fee is better than none.
That’s how mental health ghost networks develop: Clinicians are listed on the panel but must limit how many people with low-paying insurance they can accept as new clients, in order to stay in business. Without competitive, livable reimbursement rates, that will not change.
Lengthy process for joining insurance networks & lack of transparency.
Suppose a therapist decides to join a network. The process of signing up also contributes to “ghost” networks.
First comes the process of “credentialing,” whereby the clinician submits an application with their background information.
The payer, or a subcontractor, conducts a background check. They want to make sure the graduate degree & license are valid, there is adequate malpractice coverage, and the clinician has the training and experience that they claim.
Credentialing can take anywhere from 30-120 days. Once past credentialing, the therapist has been accepted for inclusion as a participating provider. But they aren’t “in-network” just yet, and claims will still pay at the“out of network” benefit level.
“Contracting” must be finalized before claims will be paid as “in-network.”
During contracting, the insurance company (in theory) updates their directories for every line of business they add the therapist to.
They have to update their claims system. Plus any other internal processes they have.
This usually takes another 90-180 days, but at times I’ve seen the contracting phase exceed 365 days.
Therapists have to eat and pay rent during the time they are undergoing credentialing & contracting. So who can they treat? Clients who can afford to pay cash or use out-of-network benefits.
Finally, the insurer says:
“Ok, you’re in-network now, so you have to reduce your rate to what we’re willing to pay.”
If I were the therapist?
I’d think: “I’ve been doing just fine on my own.” Given the effort involved, they very well may stay on the panel as a form of “insurance,” (pun intended), in case referrals dry up.
But they won’t exactly be rushing to fill their caseload with reduced-rate insurance clients.
An egregious example of a trend that makes this even worse, is when the insurance payer refuses to disclose the reimbursement rates until after this whole process is complete.
Then, you have a therapist new to the panel, who might immediately seek to leave when they realize the rates are inadequate. How does all this work – putting them in, only to then remove them – to benefit anyone?
But, hey, the network looks “adequate.” For a little while…
If they stay on the panel, the therapist is at best a spirit on the network…maybe accepting a couple of clients. Nothing significant enough to solve the national “ghost network” issue.
There’s also a lack of transparency in that some insurance payers have multiple fee schedules – some maybe close to adequate, and some much less. Which policies each of these many rate schedules represent can be obscure. Even experienced billers may be unable to determine ahead of time – based on an eligibility return – which fee schedule will apply to which client’s policy.
Typically, even the customer service reps don’t have that information if you call to ask. Bait and switch?
So we’ve come full circle back to the lack of adequate reimbursement.
Difficulties with claims process / getting paid / admin issues
Insurance companies don’t exactly have the reputation of being easy to deal with…
- Getting paid a low rate for your services.
- Pay someone to figure out how to get you paid
- Have to figure out how to do it yourself
- Fight to get paid
- And then (in some cases) pay to get your money…?
- And once it’s paid, a year or so later it might be “clawed back!”
Doesn’t seem all that attractive a prospect.
What’s been the solution, so far?
The oversight problem, AKA “s*** rolls downhill…”
The system of “attestation” to directory correctness is smoke and mirrors. Most of us here on the ground understand that. Many times, I’ll submit changes to payers only to find that in 90 days, nothing has been updated.
Recently, I found an address change submitted 3 years ago that was still not finalized. I encounter this quite often. The payer took no responsibility.
But the US Senate seems to think that continued directory-focused efforts are the solution. In a report dated May 3, 2023, the executive summary concluded:
“CMS should increase its oversight efforts to audit health plan directories to endure they hold MA [Medicare Advantage] plans accountable for these directories and for accurately documenting their networks. Congress can also require additional steps to ensure provider directory accuracy including regular audits, transparency, and financial penalties for non-compliance.”
Hasn’t that been tried already?
On January 1, 2016, CMS was first authorized to fine MA plans up to $25,000 per beneficiary for provider directory errors. Were plans ever fined? How much? How often? Seems to me fines won’t do anything unless:
- They are actually enforced routinely and consistently;
- They are steep enough for payers to conclude that paying fines is more expensive than increasing in-network reimbursement rates.
Don’t get me wrong; of course providers need to keep their practice profiles updated.
But directory initiatives will never be the ONLY solution to mental health ghost networks. Just pushing it onto providers isn’t the solution.
Nothing will change unless:
- Reimbursement rates are drastically increased to competitive levels.
- Administrative hassles in participating with insurance payers decrease to a level that clinicians are willing to contract again.
- Payers implement changes submitted in a timely manner and simplify the credentialing/contracting burdens.
- Providers can make directory updates in one place (for example, CAQH) and have it be disseminated to ALL payers. Why is there not ONE way to do it that all payers utilize? Currently, providers are expected to attest & update on multiple portals, for private subcontractors such as Lexis Nexis, and/or on paper. And even with all that…you still get addresses that are years out of date.
The Bottom Line: Mental Health Parity
President Biden is attempting to strengthen the Mental Health Parity legislation of 2008, by focusing on what are called NQTLs: Non-quantitative treatment limitations.
In other words, since it’s illegal to offer a plan where the mental health benefits differ from the medical benefits in terms of patient cost-shares and treatment limits, NQTL refers to OTHER ways in which insurance payers limit care.
I would argue that mental health ghost networks are perhaps the most serious of the non-quantitative treatment limitations.
What YOU can do NOW to have a voice:
Biden’s proposed parity legislation is open for comment until October 17: click here to share your views.
If society thinks mental health treatment is valuable and effective – then somehow, we must find a way to afford it.
If you’re interested in reading further, click here to access references used for this blog. (And for some much-needed light relief at the end…!)
