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Series: America’s Mental Barrier:How Insurers Interfere With Mental Health Care

Reporting Highlights

• Extensive Errors: Many states have sought to make insurers clean up their health plans’ provider directories over the past decade. But the errors are still widespread.
• Paltry Penalties: Most state insurance agencies haven’t issued a fine for provider directory errors since 2019. When companies have been penalized, the fines have been small and sporadic.
• Ghostbusters: Experts said that stricter regulations and stronger fines are needed to protect insurance customers from these errors, which are at the heart of so-called ghost networks.

These highlights were written by the reporters and editors who worked on this story.

To uncover the truth about a pernicious insurance industry practice, staffers with the New York state attorney general’s office decided to tell a series of lies.

So, over the course of 2022 and 2023, they dialed hundreds of mental health providers in the directories of more than a dozen insurance plans. Some staffers pretended to call on behalf of a depressed relative. Others posed as parents asking about their struggling teenager.

They wanted to know two key things about the supposedly in-network providers: Do you accept insurance? And are you accepting new patients?

The more the staffers called, the more they realized that the providers listed either no longer accepted insurance or had stopped seeing new patients. That is, if they heard back from the providers at all.

In a report published last December, the office described rampant evidence of these “ghost networks,” where health plans list providers who supposedly accept that insurance but who are not actually available to patients. The report found that 86% of the listed mental health providers who staffers had called were “unreachable, not in-network, or not accepting new patients.” Even though insurers are required to publish accurate directories, New York Attorney General Letitia James’ office didn’t find evidence that the state’s own insurance regulators had fined any insurers for their errors.

Shortly after taking office in 2021, Gov. Kathy Hochul vowed to combat provider directory misinformation, so there seemed to be a clear path to confronting ghost networks.

Yet nearly a year after the publication of James’ report, nothing has changed. Regulators can’t point to a single penalty levied for ghost networks. And while a spokesperson for New York state’s Department of Financial Services has said that “nation-leading consumer protections” are in the works, provider directories in the state are still rife with errors.

A similar pattern of errors and lax enforcement is happening in other states as well.

In Arizona, regulators called hundreds of mental health providers listed in the networks of the state’s most popular individual health plans. They couldn’t schedule visits with nearly 2 out of every 5 providers they called. None of those companies have been fined for their errors.

In Massachusetts, the state attorney general investigated alleged efforts by insurers to restrict their customers’ mental health benefits. The insurers agreed to audit their mental health provider listings but were largely allowed to police themselves. Insurance regulators have not fined the companies for their errors.

In California, regulators received hundreds of complaints about provider listings after one of the nation’s first ghost network regulations took effect in 2016. But under the new law, they have actually scaled back on fining insurers. Since 2016, just one plan was fined — a $7,500 penalty — for posting inaccurate listings for mental health providers.

ProPublica reached out to every state insurance commission to see what they have done to curb rampant directory errors. As part of the country’s complex patchwork of regulations, these agencies oversee plans that employers purchase from an insurer and that individuals buy on exchanges. (Federal agencies typically oversee plans that employers self-fund or that are funded by Medicare.)

Spokespeople for the state agencies told ProPublica that their “many actions” resulted in “significant accountability.” But ProPublica found that the actual actions taken so far do not match the regulators’ rhetoric.

“One of the primary reasons insurance commissions exist is to hold companies accountable for what they are advertising in their contracts,” said Dr. Robert Trestman, a leading American Psychiatric Association expert who has testified about ghost networks to the U.S. Senate Committee on Finance. “They’re not doing their job. If they were, we would not have an ongoing problem.”

Most states haven’t fined a single company for publishing directory errors since 2019. When they do, the penalties have been small and sporadic. In an average year, fewer than a dozen fines are issued by insurance regulators for directory errors, according to information obtained by ProPublica from almost every one of those agencies. All those fines together represent a fraction of 1% of the billions of dollars in profits made by the industry’s largest companies. Health insurance experts told ProPublica that the companies treat the fines as a “cost of doing business.”

Insurers acknowledge that errors happen. Providers move. They retire. Their open appointments get booked by other patients. The industry’s top trade group, AHIP, has told lawmakers that companies contact providers to verify that their listings are accurate. The trade group also has stated that errors could be corrected faster if the providers did a better job updating their listings.

But providers have told us that’s bogus. Even when they formally drop out of a network, they’re not always removed from the insurer’s lists.

The harms from ghost networks are real. ProPublica reported on how Ravi Coutinho, a 36-year-old entrepreneur from Arizona, had struggled for months to access the mental health and addiction treatment that was covered by his health plan. After nearly two dozen calls to the insurer and multiple hospitalizations, he couldn’t find a therapist. Last spring, he died, likely due to complications from excessive drinking.

Health insurance experts said that, unless agencies can crack down and issue bigger fines, insurers will keep selling error-ridden plans.

“You can have all the strong laws on the books,” said David Lloyd, chief policy officer with the mental health advocacy group Inseparable. “But if they’re not being enforced, then it’s kind of all for nothing.”

The problem with ghost networks isn’t one of awareness. States, federal agencies, researchers and advocates have documented them time and again for years. But regulators have resisted penalizing insurers for not fixing them.

Two years ago, the Arizona Department of Insurance and Financial Institutions began to probe the directories used by five large insurers for plans that they sold on the individual market. Regulators wanted to find out if they could schedule an appointment with mental health providers listed as accepting new patients, so their staff called 580 providers in those companies’ directories.

Thirty-seven percent of the calls did not lead to an appointment getting scheduled.

Even though this secret-shopper survey found errors at a lower rate than what had been found in New York, health insurance experts who reviewed Arizona’s published findings said that the results were still concerning.

Ghost network regulations are intended to keep provider listings as close to error-free as possible. While the experts don’t expect any insurer to have a perfect directory, they said that double-digit error rates can be harmful to customers.

Arizona’s regulators seemed to agree. In a January 2023 report, they wrote that a patient could be clinging to the “last few threads of hope, which could erode if they receive no response from a provider (or cannot easily make an appointment).”

Secret-shopper surveys are considered one of the best ways to unmask errors. But states have limited funding, which restricts how often they can conduct that sort of investigation. Michigan, for its part, mostly searches for inaccuracies as part of an annual review of a health plan. Nevada investigates errors primarily if someone files a complaint. Christine Khaikin, a senior health policy attorney for the nonprofit advocacy group Legal Action Center, said fewer surveys means higher odds that errors go undetected.

Some regulators, upon learning that insurers may not be following the law, still take a hands-off approach with their enforcement. Oregon’s Department of Consumer and Business Services, for instance, conducts spot checks of provider networks to see if those listings are accurate. If they find errors, insurers are asked to fix the problem. The department hasn’t issued a fine for directory errors since 2019. A spokesperson said the agency doesn’t keep track of how frequently it finds network directory errors.

Dave Jones, a former insurance commissioner in California, said some commissioners fear that stricter enforcement could drive companies out of their states, leaving their constituents with fewer plans to choose from.

Even so, staffers at the Arizona Department of Insurance and Financial Institutions wrote in the report that there “needs to be accountability from insurers” for the errors in their directories. That never happened, and the agency concealed the identities of the companies in the report. A department spokesperson declined to provide the insurers’ names to ProPublica and did not answer questions about the report.

Since January 2023, Arizonans have submitted dozens of complaints to the department that were related to provider networks. The spokesperson would not say how many were found to be substantiated, but the department was able to get insurers to address some of the problems, documents obtained through an open records request show.

According to the department’s online database of enforcement actions, not a single one of those companies has been fined.

Sometimes, when state insurance regulators fail to act, attorneys general or federal regulators intervene in their stead. But even then, the extra enforcers haven’t addressed the underlying problem.

For years, the Massachusetts Division of Insurance didn’t fine any company for ghost networks, so the state attorney general’s office began to investigate whether insurers had deceived consumers by publishing inaccurate directories. Among the errors identified: One plan had providers listed as accepting new patients but no actual appointments were available for months; another listed a single provider more than 10 times at different offices.

In February 2020, Maura Healey, who was then the Massachusetts attorney general, announced settlements with some of the state’s largest health plans. No insurer admitted wrongdoing. The companies, which together collect billions in premiums each year, paid a total of $910,000. They promised to remove providers who left their networks within 30 days of learning about that decision. Healey declared that the settlements would lead to “unprecedented changes to help ensure patients don’t have to struggle to find behavioral health services.”

But experts who reviewed the settlements for ProPublica identified a critical shortcoming. While the insurers had promised to audit directories multiple times a year, the companies did not have to report those findings to the attorney general’s office. Spokespeople for Healey and the attorney general’s office declined to answer questions about the experts’ assessments of the settlements.

After the settlements were finalized, Healey became the governor of Massachusetts and has been responsible for overseeing the state’s insurance division since she took office in January 2023. Her administration’s regulators haven’t brought any fines over ghost networks.

Healey’s spokesperson declined to answer questions and referred ProPublica to responses from the state’s insurance division. A division spokesperson said the state has taken steps to strengthen its provider directory regulations and streamline how information about in-network providers gets collected. Starting next year, the spokesperson said that the division “will consider penalties” against any insurer whose “provider directory is found to be materially noncompliant.”

States that don’t have ghost network laws have seen federal regulators step in to monitor directory errors.

In late 2020, Congress passed the No Surprises Act, which aimed to cut down on the prevalence of surprise medical bills from providers outside of a patient’s insurance network. Since then, the Centers for Medicare and Medicaid Services, which oversees the two large public health insurance programs, has reached out to every state to see which ones could handle enforcement of the federal ghost network regulations.

At least 15 states responded that they lacked the ability to enforce the new regulation. So CMS is now tasked with watching out for errors in directories used by millions of insurance customers in those states.

Julie Brookhart, a spokesperson for CMS, told ProPublica that the agency takes enforcement of the directory error regulations “very seriously.” She said CMS has received a “small number” of provider directory complaints, which the agency is in the process of investigating. If it finds a violation, Brookhart said regulators “will take appropriate enforcement action.”

But since the requirement went into effect in January 2022, CMS hasn’t fined any insurer for errors. Brookhart said that CMS intends to develop further guidelines with other federal agencies. Until that happens, Brookhart said that insurers are expected to make “good-faith” attempts to follow the federal provider directory rules.

Last year, five California lawmakers proposed a bill that sought to get rid of ghost networks around the state. If it passed, AB 236 would limit the number of errors allowed in a directory — creating a cap of 5% of all providers listed — and raise penalties for violations. California would become home to one of the nation’s toughest ghost network regulations.

The state had already passed one of America’s first such regulations in 2015, requiring insurers to post directories online and correct inaccuracies on a weekly basis.

Since the law went into effect in 2016, insurance customers have filed hundreds of complaints with the California Department of Managed Health Care, which oversees health plans for nearly 30 million enrollees statewide.

Lawyers also have uncovered extensive evidence of directory errors. When San Diego’s city attorney, Mara Elliott, sued several insurers over publishing inaccurate directories in 2021, she based the claims on directory error data collected by the companies themselves. Citing that data, the lawsuits noted that error rates for the insurers’ psychiatrist listings were between 26% and 83% in 2018 and 2019. The insurers denied the accusations and convinced a judge to dismiss the suits on technical grounds. A panel of California appeals court judges recently reversed those decisions; the cases are pending.

The companies have continued to send that data to the DMHC each year — but the state has not used it to examine ghost networks. California is among the states that typically waits for a complaint to be filed before it investigates errors.

“The industry doesn’t take the regulatory penalties seriously because they’re so low,” Elliott told ProPublica. “It’s probably worth it to take the risk and see if they get caught.”

California’s limited enforcement has resulted in limited fines. Over the past eight years, the DMHC has issued just $82,500 in fines for directory errors involving providers of any kind. That’s less than one-fifth of the fines issued in the two years before the regulation went into effect.

A spokesperson for the DMHC said its regulators continue “to hold health plans accountable” for violating ghost network regulations. Since 2018, the DMHC has discovered scores of problems with provider directories and pushed health plans to correct the errors. The spokesperson said that the department’s oversight has also helped some customers get reimbursed for out-of-network costs incurred due to directory errors.

“A lower fine total does not equate to a scaling back on enforcement,” the spokesperson said.

Dr. Joaquin Arambula, one of the state Assembly members who co-sponsored AB 236, disagreed. He told ProPublica that California’s current ghost network regulation is “not effectively being enforced.” After clearing the state Assembly this past winter, his bill, along with several others that address mental health issues, was suddenly tabled this summer. The roadblock came from a surprising source: the administration of the state’s Democratic governor.

Officials with the DMHC, whose director was appointed by Gov. Gavin Newsom, estimated that more than $15 million in extra funding would be needed to carry out the bill’s requirements over the next five years. State lawmakers accused officials of inflating the costs. The DMHC’s spokesperson said that the estimate was accurate and based on the department’s “real experience” overseeing health plans.

Arambula and his co-sponsors hope that their colleagues will reconsider the measure during next year’s session. Sitting before state lawmakers in Sacramento this year, a therapist named Sarah Soroken told the story of a patient who had called 50 mental health providers in her insurer’s directory. None of them could see her. Only after the patient attempted suicide did she get the care she’d sought.

“We would be negligent,” Soroken told the lawmakers, “if we didn’t do everything in our power to ensure patients get the health care they need.”

Paige Pfleger of WPLN/Nashville Public Radio contributed reporting.