In the U.S. healthcare system, where promises of coverage often clash with the harsh reality of access, a new federal report has pulled back the curtain on a troubling deception: “ghost networks” of mental health providers. These are lists of psychologists, psychiatrists, and therapists that private insurers tout as in-network options for Medicare Advantage and Medicaid managed care plans—only for patients to discover they’re chasing shadows. The Office of Inspector General (OIG) for the Department of Health and Human Services released its findings on October 7, 2025, revealing that such inaccuracies aren’t isolated slip-ups but systemic flaws that leave vulnerable Americans—particularly those grappling with behavioral health crises—stranded when they need help most. As behavioral health needs surge in the wake of the pandemic, with almost half of all Americans expected to experience a behavioral health condition—including mental health disorders and substance use disorders—in their lifetime, this report isn’t just an audit; it’s a wake-up call to a privatized model that’s often prioritizing profits over people.
The Anatomy of a Ghost Network: Numbers That Haunt
At its core, the OIG investigation exposes a stark mismatch between what insurers advertise and what they deliver. Drawing from a nationally representative sample of 40 Medicare Advantage (MA) plans and 20 Medicaid managed care plans across 10 counties in five states—Arizona, Iowa, Ohio, Oregon, and Tennessee, balancing urban and rural areas—the report found that 55% of behavioral health providers listed as in-network for MA plans weren’t treating a single enrollee in 2023. For Medicaid plans, the figure drops to 28%, but that’s cold comfort when it means thousands of potential lifelines are effectively offline. These “inactive” providers? Many lack active contracts, have relocated (or retired) without updating directories, or have shifted to non-clinical roles like administration. In one egregious example, a Medicaid plan listed a therapist as available across 19 locations; investigators called one clinic only to learn the individual had retired years earlier.
This isn’t hyperbole—it’s a data-driven indictment. The study showed that in three-quarters of MA plans, in-network behavioral health options covered fewer than 25% of available providers in the county; seven MA plans and one Medicaid plan had zero in-network specialists at all. While the OIG deems the sample nationally representative, its focus on five states limits broader extrapolation, as network issues may vary regionally. Why does this matter? Medicare Advantage now covers over 34 million seniors and disabled individuals, while Medicaid managed care reaches about 70 million low-income Americans—groups disproportionately hit by mental health disparities. The government funnels hundreds of billions annually into these private plans, paying fixed per-enrollee rates that let insurers pocket unspent funds. Yet, as Jodi Nudelman, a regional OIG inspector and co-author, told reporters, “Taxpayers aren’t getting their money’s worth if insurers fail to meet obligations to provide sufficient care options for Medicare and Medicaid participants in the plans.”
Digging deeper, the incentives are misaligned in many cases. Insurers must meet regulatory thresholds for provider numbers to secure contracts, but verification is lax—relying on self-reported directories rather than real-time claims data. This echoes earlier OIG probes: a June 2025 report found 45% of surveyed behavioral health providers unavailable for new Medicare or Medicaid patients due to capacity issues or low reimbursements. Post-pandemic demand has only amplified the strain, with wait times stretching months and suicide rates ticking upward among the underserved. In essence, ghost networks often stem from a model where compliance feels performative, and care is commodified—sometimes including inactive providers to make networks appear larger than they are.
Human Cost: Stories Behind the Statistics
Statistics paint the picture, but personal narratives etch it into memory. Consider Jeanine Simpkins, a Mesa, Arizona, resident whose 40-year-old disabled relative spiraled into a substance use crisis this fall. Covered by Medicare Advantage, the family turned to the plan’s directory for rehab options—only to hit dead ends. “I called about 20 programs,” Simpkins recounted in an interview. “None accepted the insurance. You feel kind of dropped… I was pretty surprised, because I thought we had something good in place for her.” Her relative settled for partial hospital care, a suboptimal patch on a gaping wound.
Simpkins’ ordeal underscores the vulnerability baked into these plans. Behavioral health patients often face compounded barriers: stigma silences outreach, crises demand immediacy, and geographic isolation—rural counties in the OIG sample were hit hardest—exacerbates scarcity. Nudelman emphasized this: “They can be particularly vulnerable… It can be daunting for people to acknowledge they need such care, and any roadblock can discourage them from trying to find help.” For Medicaid enrollees, who skew younger and poorer, the fallout includes higher emergency room visits and homelessness; for Medicare’s elderly, it’s isolation and cognitive decline. Inadequate networks drive up uncompensated care costs across hospitals.
These aren’t abstract risks. Per OIG survey, 72% of inactive providers indicated they shouldn’t have been listed—citing outdated info (46%), non-participation (21%), or retirement (5%)—the betrayal feels personal. It’s a reminder that in a for-profit ecosystem, the human element often gets ghosted.
Industry Pushback and Regulatory Reckoning
The response from insurers has been measured, if not contrite. Susan Reilly, vice president of communications for the Better Medicare Alliance—a trade group for MA plans—acknowledged the report’s “small sample” but pledged collaboration: “While this report looks at a small sample of plans, we agree there’s more work to do and are committed to continuing that progress together with policymakers.” Similar sentiments came from Medicaid advocates, who highlighted investments in telehealth as a bridge. Yet, critics like those at Fierce Healthcare argue this rings hollow; despite 2024 CMS rules mandating shorter wait times and “secret shopper” audits, enforcement lags. Plans face minimal penalties for inaccuracies, and with MA enrollment booming—projected to hit 50% of Medicare by 2030—the pressure to reform feels diluted.
The OIG doesn’t stop at critique; it charts a path forward. Top recommendations include leveraging billing data to audit networks in real time, offering technical assistance to plans for accurate directories, and launching a national searchable database of behavioral health providers, cross-referenced with accepted plans. CMS has piloted similar tools for other insurance types, and Reilly endorsed the idea, signaling potential buy-in. But implementation hinges on funding and willpower—Congressional gridlock could stall it, as seen in stalled mental health parity bills.
Broader Shadows: Lessons for a Fractured System
Zoom out, and ghost networks illuminate deeper fissures in U.S. healthcare. Privatization promised efficiency but delivered inequities: while traditional Medicare boasts broader networks, MA’s capitation model incentivizes skimping. Comparatively, single-payer systems like the UK’s NHS enforce centralized directories, curbing such ghosts—though even single-payer systems like the UK’s NHS grapple with long wait times, with fewer than 60% of patients meeting the 18-week target in 2025. Here, the OIG report builds on a decade of warnings, from 2017 GAO alerts to 2023 KFF analyses, yet change crawls.
The stakes? With behavioral health spending topping $280 billion yearly, misallocated funds erode public trust and inflate costs—emergency interventions for untreated conditions are significantly more expensive than outpatient care, per limited GAO research. For marginalized groups—racial minorities overrepresented in Medicaid, or LGBTQ+ youth facing dual stigmas—these networks aren’t just inadequate; they’re discriminatory by design.
Ultimately, this saga demands reckoning. Insurers must transcend compliance to cultivate genuine access; regulators, wield data as a scalpel. Patients like Simpkins deserve directories that deliver, not deceive. As Nudelman put it, the vulnerable “can’t afford more ghosts.” If unheeded, this report risks becoming one itself—a spectral warning in a system already haunted by unfulfilled promises.
Disclaimer: All case studies, examples, narratives, and direct quotations in this article are drawn from publicly available sources and are used for illustrative and analytical purposes only. They are not intended to represent or endorse any specific individuals or organizations.
Sources
1. Office of Inspector General, HHS. “Many Medicare Advantage and Medicaid Managed Care Plans Have Limited Behavioral Health Provider Networks and Inactive Providers” (OEI-02-23-00540). October 7, 2025. https://oig.hhs.gov/reports/all/2025/many-medicare-advantage-and-medicaid-managed-care-plans-have-limited-behavioral-health-provider-networks-and-inactive-providers/
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10. KFF. “Medicare Advantage in 2025…” July 28, 2025. https://www.kff.org/medicare/medicare-advantage-enrollment-update-and-key-trends/
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