Phantom Networks Add Yet Another Barrier to Behavioral Health

Phantom networks in behavioral health are coming into focus as yet another potential barrier to care.

The behavioral health industry faces clear challenges from workforce shortages and reimbursement parity enforcement issues. Now, an increasing body of evidence shows that many payers struggle to keep accurate records of behavioral health provider networks.

This, in turn, undermines efforts to get more people in need of mental health care connected to services.


Earlier in the month, researchers from the Oregon Health & Science University and Johns Hopkins University found that, on average, more than half of all mental health providers listed on Oregon Medicaid managed care providers’ networks didn’t actually see patients.

Dr. Jane Zhu, assistant professor of medicine at Oregon Health & Science University (OHSU) and an author of the phantom network study, said there is some variability between the providers listed as in the network and the providers that actually see patients.

“What’s not expected is the discrepancy between what’s listed in the directory and [the providers that are] actually seeing patients and it’s not explained by geographic variation alone,” Zhu said in an interview. “There’s something going on here that suggests that potential health plan capacity and administrative capabilities to keep up with these provider directories is potentially playing a role.”


In the most extreme case, 90.3% of the providers listed in one Medicaid provider network didn’t see any Medicaid patients. Dubbed phantom networks, these insurance plans were shown to have networks that would otherwise appear robust but don’t actually supply the required access to care, the study states.

“There’s lots of variation that you see across [these] health plans and that ranges from the rate of providers [not seeing Medicaid patients] being in the teens to 90%,” Zhu said. “That is a huge shocker to me. I was very surprised to see that.”

Phantom networks, on top of being inconvenient, can delay, interrupt or even lead some patients to avoid getting health care. This is true even in commercial health insurance, Zhu said.

Zhu said other research finds that commercially insured members who relied on their insurer’s network to find a mental health practitioner were twice as likely to be charged out-of-network rates and four times like to get a surprise bill.

Another key finding in Zhu’s research was that mental health care provided to Medicaid enrollees comes from a small corps of providers.

“A third of prescribers are seeing the majority of Medicaid patients and that finding is in line with [a] previous study,” Zhu said.

Further impacts of phantom networks

Provider directories are often inaccurate in a broader context than Medicaid, according to Elizabeth Hinton, associate director for the Program on Medicaid and the Uninsured at the Kaiser Family Foundation.

She highlighted many factors at play. For example, insurers have the administrative challenge of verifying provider information. Additionally, providers shoulder the burden of updating insurers when they make a change.

However, phantom networks foil state efforts to regulate insurers.

“The basis for regulators to evaluate some of those quantitative access standards that states create are the provider directories,” Hinton said. “So having inaccurate provider directories certainly poses a lot of problems in terms of trying to evaluate [insurers].”

She also said that the federal government “historically has not been super involved” in monitoring whether or not insurers are meeting network standards and offload most of that regulatory work to states. However, access to care, especially behavioral health, is a focus of the Biden administration, Hinton noted.

In Congress, BHB has reported that key legislators have signaled they will strengthen existing laws that forbid insurers from diminishing access and payments to behavioral health providers. On July 26, Democratic lawmakers introduced the Behavioral Health Coverage Transparency Act of 2022 which does just that.

“We’re anticipating that this administration is going to put out, in the fall, a notice of proposed rulemaking defining a lot more rules in this space,” Hinton said.

Andy Schneider, a research professor at the Georgetown University McCourt School of Public Policy, said that the Oregon phantom networks represent the opaque nature of managed care and state Medicaid programs. In his work with the Georgetown Center for Children and Families, he and his fellows have faced struggles to get basic population data from states and insurers alike.

“If that data in Oregon, like in most of the states, is not transparent, that’s a problem,” Schneider said. He added that both state Medicaid agencies and Medicaid plans don’t have “reputational interest” in improving networks if information about potential network inadequacies isn’t made public.

“And for the plans that are performing well, there’s no interest in them upping their game.”

Further, Schneider is doubtful that a lack of transparency from state Medicaid agencies will leave space for improving the accuracy of networks.

Many states, Scheider noted, look to Medicaid-managed care companies to efficiently manage state funds for Medicaid and ensure vulnerable populations have access to care. But phantom networks stymie that work, he said.

“If states really want to make risk-based managed care work, they have to solve for bad networks — one way or another, they have to be sure that the networks are adequate,” Schneider said. “Plans are being paid for organizing networks and networks need to work for the populations that are enrolling.”