In 2022 or 2023, employees of the state attorney general’s office in New York took a seat and began making phone calls. The directories of over a dozen health insurance plans in the state contained a list of mental health professionals, including psychiatrists, therapists, and counselors. Patients enrolled in those plans were supposed to be able to access these providers without having to pay out-of-pocket costs because they were supposed to be in-network providers. The employees pretended to be worried relatives, parents of troubled teenagers, or people in need of assistance when they called. They discovered dead ends, silence, and disconnection one after the other. 86% of the listed providers were either unreachable, no longer in-network, or not taking new patients by the time they put their findings together. Not a minor mistake. Not a mistake in administration. Eighty-six percent.
This is known as a “ghost network,” and it has been surreptitiously functioning within American health insurance for many years. The idea is simple and, once grasped, frustrating: insurance companies publish lists of mental health professionals that, in theory, patients can access through their coverage. However, a large number of those providers have either moved, retired, stopped taking that specific insurance, or filled their patient load years ago. The listing is still in place. On paper, the coverage appears authentic. When the patient calls the number, they either get no answer or someone who claims they haven’t used the insurance in three years. Every month, the premium is still collected.
| Category | Details |
|---|---|
| What is a ghost network | An insurance provider directory listing mental health professionals who are not actually available — because they have retired, moved, stopped accepting the insurer, or are no longer taking new patients — creating a false impression of accessible care |
| New York AG findings (2023) | 86% of listed mental health providers called by NY AG staffers were unreachable, not in-network, or not accepting new patients; no insurer in New York was fined despite rampant violations |
| Federal OIG report (Oct 2025) | Investigation of 40 Medicare Advantage plans and 20 Medicaid managed care plans across Arizona, Iowa, Ohio, Oregon, and Tennessee; found 55% of behavioral health providers listed in Medicare Advantage plans were not treating a single enrollee in 2023 |
| Medicare Advantage scope | Covers over 34 million seniors and disabled individuals; projected to reach 50% of all Medicare enrollment by 2030; government pays fixed per-enrollee rates — allowing insurers to profit from unspent care funds |
| Washington State private study | Seattle Times secret-shopper study called 400 mental health providers from four of the largest Washington insurers — only 32 (8%) offered an appointment; directories listed retired providers, wrong phone numbers, duplicate names, and non-clinical administrators |
| Arizona findings | State regulators called hundreds of listed mental health providers; could not schedule visits with nearly 2 in every 5; no company was fined |
| Enforcement reality | Fewer than a dozen fines issued nationally per year for directory errors; most states have not fined a single insurer since 2019; California issued one fine since 2016 — $7,500; fines represent a fraction of 1% of insurer profits |
| Key human cost case | Ravi Coutinho, 36, Arizona entrepreneur — made nearly two dozen calls to his insurer seeking mental health and addiction treatment; was hospitalized multiple times; never found an in-network therapist; died in 2024, likely from complications of excessive drinking |
| Reimbursement problem | Mental health provider reimbursement rates have not meaningfully increased in decades; psychiatrists can earn 2–3 times more seeing patients out-of-pocket than through Medicare or Medicaid — driving providers out of insurance networks entirely |
| Legislative proposal | Behavioral Health Network and Directory Improvement Act (introduced 2022, Senators Smith and Wyden) — would require dual audits of directory accuracy by insurers and federal government, ombudsman programs, and provider-side update requirements; has not passed |
| Expert verdict | Dr. Robert Trestman, American Psychiatric Association: “They’re not doing their job. If they were, we would not have an ongoing problem.” — referring to state insurance regulators |
| Annual behavioral health spending | Over $280 billion per year in the U.S.; emergency interventions for untreated conditions significantly more expensive than outpatient care — making ghost networks a fiscal crisis, not just a moral one |
This is neither conjecture nor anecdote. In October 2025, the federal Office of Inspector General published the results of an investigation into 20 Medicaid managed care plans and 40 Medicare Advantage plans in five states. In 2023, not a single enrollee was being treated by 55% of behavioral health providers listed as in-network for Medicare Advantage plans. These figures were startling. There were no in-network behavioral health specialists available in any of the seven Medicare Advantage plans and one Medicaid plan that the study looked at. Nothing. They were listed in the directories. There was no access.
In response to these findings, the insurance industry typically acknowledges that mistakes do occur, such as providers moving, retiring, or ceasing to accept new patients, while pointing out that directories are updated frequently and that providers have an obligation to notify insurers when their status changes. This argument seems plausible on the surface. However, providers have consistently resisted, pointing out that they are often left on the listings even after they formally leave a network. The industry’s framing is further complicated by one of the OIG report’s own findings: 72% of surveyed inactive providers claimed they shouldn’t have been listed in the first place. They were aware that they were ghosts. It appears that the insurer was unaware or failed to investigate.
All of this is much more difficult to justify in light of the enforcement picture. The majority of states have not penalized an insurer for provider directory errors since 2019, according to ProPublica’s public records requests to almost all state insurance commissions nationwide. When fines do occur, they are typically modest and sporadic. California, which enacted one of the nation’s first ghost network laws in 2016, has only imposed one $7,500 fine under that law in almost ten years. That number serves more as an administrative footnote than as a deterrent for businesses with yearly profits in the billions. ProPublica was informed directly by health insurance experts that insurers view these fines as an expense of doing business. When the numbers are so striking, it is difficult to argue otherwise.
Beneath all of this, there is a true human cost that is beyond the scope of statistics. Ravi Coutinho, a 36-year-old Arizonan businessman, required treatment for addiction and mental health issues that his health plan was meant to pay for. He made almost two dozen calls to his insurance company. While searching, he was admitted to the hospital several times. He was unable to locate a therapist in his network. He passed away in 2024, most likely from alcohol-related complications. His case was covered by NPR and added to the larger body of information showing the true harm that ghost networks cause to those who rely on them. If he had had access earlier, the outcome might have been different. You can’t possibly know. This ambiguity contributes to the difficulty of understanding regulators’ silence.
Inaccurate directories are only one aspect of the structural issue causing ghost networks. Medicare and Medicaid reimbursement rates for mental health providers have hardly changed in decades, and the difference between what insurers pay and what providers can make by seeing patients privately has gotten so large that many psychiatrists and therapists have simply stopped taking insurance. Compared to insurance billing, psychiatrists can make two to three times as much money out of pocket. You get the ghost when network providers depart and directories fail to update. However, fixing a spreadsheet never addresses the root causes of their departure, which include low reimbursement, administrative burden, and credentialing delays. It’s a structural issue disguised as a data issue.
There is a frustrating sameness to the way this situation has developed over the past few years, as evidenced by the numerous reports, investigations, and state attorney general findings. There is documentation of the issue. The damage is recorded. There is documentation of the regulatory inaction. Consequences are lacking. The directories will continue to list names of people who are not present until the fines are significant enough, directory accuracy is audited in real time against actual billing data rather than self-reported insurer submissions, and reimbursement rates provide providers with a real incentive to remain in networks. Additionally, patients will continue to call numbers that don’t ring.
