OIG Says There Are Ghosts in Medicare Advantage and Medicaid Plans

This Halloween, remember: the ghosts you should fear most aren’t in your attic. They’re in Big Insurance’s behavioral health directories.

Last week, The Department of Health and Human Services’ Office of Inspector General (OIG) confirmed there are ghosts lurking inside Big Insurance’s Medicare Advantage and Medicaid plans. Not the kind that rattle chains on Halloween but “ghost providers” – the psychiatrists, therapists and other behavioral health providers listed in insurance companies’ taxpayer-funded directories even though those providers aren’t actually available to see patients.

These “ghost providers,” as the OIG calls them, make networks look robust on paper but curse patients to spend weeks calling disconnected numbers or showing up at practices where no one accepts their plan.

It’s a taxpayer-funded haunted house

The OIG’s new report — Many Medicare Advantage and Medicaid Managed Care Plans Have Limited Behavioral Health Provider Networks and Inactive Providers — examined 60 plans across five states and found that more than half of the behavioral health providers listed in Medicare Advantage networks were inactive and not providing care to enrollees. For Medicaid plans, the figure was 28%.

The Department of Health and Human Services’ Office of Inspector General’s (OIG) report titled — Many Medicare Advantage and Medicaid Managed Care Plans Have Limited Behavioral Health Provider Networks and Inactive Providers.

The report notes that many Medicare Advantage and Medicaid plans had networks that included fewer than a quarter of all available behavioral health providers, meaning that for millions of Americans enrolled in these plans, the odds of finding a real, in-network therapist or psychiatrist are worse than a coin flip.

When fewer providers actually participate, companies save money because under both Medicare Advantage and private Medicaid plans, insurers are paid by the federal or state government in advance or “anticipation” of the care they provide to enrollees. The advance is a fixed amount of taxpayer money for each person they cover, every month – regardless of how much care that person actually uses. The industry calls it capitation.

The idea was supposed to be that insurers would use that money efficiently to coordinate better care. But in practice, it’s created a perverse incentive because insurers keep whatever they don’t spend on patient care, every doctor visit avoided, every claim denied, and every frustrated patient who gives up trying to find help goes right to profits.

So, the fewer Americans who can access care — or even find an in-network provider — the more money insurers get to pocket.

Last year, the government paid Wall Street’s favorite insurers – like UnitedHealth Group, Humana, CVS/Aetna and Centene – $494 billion and $517.5 billion, over a trillion dollars respectively, to administer Medicare Advantage and Medicaid. In return, insurers are supposed to maintain adequate provider networks. But the OIG found that federal oversight often relies on the insurers’ own self-reported data and recommended that regulators use real billing data to confirm whether the providers on insurers’ lists are actually treating patients and urged the creation of a nationwide, searchable provider directory.

The Medicare Payment Advisory Commission (MedPAC) and Health Management Associates Information Services (HMAIS) reports noting more than $1 trillion in payments to private Medicare Advantage and Medicaid plans in 2024.

Alas, the ever bureaucratic, non-committal Centers for Medicare & Medicaid Services (CMS) has said that it’s merely “aligned” with the OIG’s recommendations.

Context

Jodi Nudelman, a regional inspector general who helped write the federal report, told Kaiser Health News that it can be “daunting” for folks to even acknowledge that they need mental health care in the first place, and any “roadblock” can stop someone’s pursuit of care.

And there are plenty of people who are in need of behavioral health providers in the Medicare and Medicaid populations.

About one in four Medicare-age beneficiaries live with a mental illness, yet only 40-50% receive treatment according to the Commonwealth Fund. For those enrolled in a Medicare Advantage plan filled with “ghost providers”, the consequences can ripple into physical health, hospitalizations and even mortality. For non-elderly adults enrolled in Medicaid, more than one in three have a mental illness (around 35%), and about 10% live with a serious mental illness.

“Ghost Networks” (and “ghost providers”) are more than just scary buzzwords used by health care policy wonks – they’re apt descriptors for a Wall Street-first practice that leaves Americans in distress when their mental health needs care. I don’t know what’s scarier than that.

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Important Reads: New Reporting Details Ghost Networks and Fighting Denials

Navigating behavioral health care in the United States can feel like a cruel game of hide and seek. Millions of Americans, already struggling with mental health and substance use issues are forced to confront a system that dangles the promise of in-network therapists and doctors. But when they finally reach out for help, they all too often discover a grim reality: Many of the providers listed in their insurer’s directory simply don’t exist or aren’t accepting patients. This isn’t a minor oversight; it’s what’s known as a “ghost network” and it leaves countless people stranded when they need care the most.

Wendell Potter
Sep 10, 2024