November 03, 2000

health care economics

'It's News to Me': Psychiatrists Battling 'Phantom Networks'

Psychiatrists are outraged that some managed care companies are listing them as providers when that is not the case. But there are ways to escape these so-called "phantom networks."

By Joan Arehart-Treichel

A number of psychiatrists throughout the United States view managed care companies as the "Evil Empire." There are a number of reasons for this perception. Managed care companies are sometimes guilty of low reimbursement, long delays in payment, restrictions on coverage, and even infringements on medical-record privacy. But now a new outcry against managed care companies can be heard rising from the ranks. This outcry is against the practice of listing psychiatrists on their provider panels when the psychiatrists have no contract with the companies to provide service.

The misleading results that emerge from this practice are sometimes called "phantom networks" or "phantom panels."

Phantom networks have provoked some psychiatrists to the point that they charge that the networks are not only unethical, but also fraudulent. Others are annoyed but manage to keep their cool and even see some humor in the situation. For instance, one psychiatrist said that getting his name removed from a provider list when it didn’t belong there was about as tough as getting rid of hepatitis C. And who knows how those deceased psychiatrists listed in phantom networks—yes, there are some—are reacting?

The light touch aside, of course, there are some sobering issues here.

First off, phantom networks appear to be fairly widespread throughout the United States, Lawrence Lurie, M.D., chair of the APA Committee on Managed Care, said in an interview, although hard data are not yet available.

Secondly, whereas low fees and excessive paperwork are the two biggest problems that psychiatrists currently report having with managed care companies, phantom networks are certainly also a headache for some psychiatrists. Take the case of Charles McDermott, M.D., of Brooklyn, N.Y. Some of his patients have health insurance through United Behavioral Health. A few months ago, these patients received incorrect information from United Behavioral Health that he was a provider. Because he was not a provider, the fee he charged the patients was higher than the rate that the company quoted. In August United Behavioral Health asked McDermott to refund his United Behavioral Health patients the difference between what he had received and what he had supposedly agreed to take.

Yet the people who are really suffering from phantom networks are people who need psychiatric help. For instance, former APA President Rodrigo Muñoz, M.D., of San Diego, reported that time and again, patients tell him that he is listed as being on managed care panels when he is not, and then he has to tell the patients that he cannot see them because the companies’ reimbursement rates are so low. "I hate what they are doing to the patients, deceiving them," he said.

Pamela Wright-Etter, M.D., a psychiatrist in Charlotte, N.C., also feels for patients who seek psychiatric help through phantom paneling and can’t find it. "It’s a pretty major problem. Patients get very confused. They are told one thing by us, and then they call the company, and the company says we are on their list even though we have told them we are not."

How Do Phantom Networks Arise?

Also troubling is how phantom networks come about. In some cases, it appears, psychiatrists who were once providers continue to be listed in provider manuals after they leave the panel. This certainly seems to be so for Wright-Etter. She had had contracts with various managed care companies—mostly preferred provider organizations, not carveouts—and then resigned from all their panels last December. Still, to this day she has patients calling and asking whether she is a provider for this or that managed care company.

One reason she and other psychiatrists who used to be providers are still listed may be simply that companies are behind in their listings. That, at least, is the speculation of psychiatrist Jerome Vaccaro, M.D., vice president and corporate medical director of PacifiCare Behavioral Health in Van Nuys, Calif. Vaccaro said that his company avoids such a problem by posting its provider list on its Web site and updating it in "real time."

In other cases, however, psychiatrists who had never been providers with companies still end up on their lists. Lee Beecher, M.D., of Saint Louis Park, Minn., is affiliated with only one managed care company—a preferred provider organization named Preferred One. Yet time and again patients call his office and report that he is listed as a provider by health insurance companies other than Preferred One.

Another example is Muñoz. In addition to being kept on provider panels to which he no longer belongs, he is listed on the panel of a company to which he never belonged. McDermott is yet a third example. Although United Behavioral Health has been listing him as a provider, "I have never applied for provider status with that company, and I never signed a contract," he said.

So how do psychiatrists who have never signed a contract with managed care companies still end up on their lists? One possible explanation, although it probably doesn’t happen very often, is a case of mistaken identity. In May, McDermott called United Behavioral Health and protested against its erroneously listing him as a provider. The company nonetheless insisted that he had signed a contract with it in October 1999.

"It was probably my evil twin rather than me," McDermott said with a chuckle, "except I don’t have an evil twin." Here’s his alternative theory as to how he ended up on the company’s list: His wife is a nonphysician psychotherapist and was until recently a United Behavioral Health provider. So it is possible, he thinks, that the company had mixed up his name with hers.

Another possible explanation for how psychiatrists who never contracted with a managed care company nonetheless end up on its provider rolls is that unscrupulous managed care companies simply lift psychiatrists’ names from the provider manuals of "honest" ones. A sort of piracy, if you will. This is Beecher’s suspicion. He is reluctant to believe that the one managed care company he is contracted with—Preferred One—has sold his name to other managed care companies, since he was associate medical director with the company until 1996 and believes that the company is a good one. But he does suspect that other companies have pinched information from Preferred One’s provider manual.

Yet is it possible that some managed care companies are selling psychiatrists’ names to other companies? Possibly, but what may be just as likely, or perhaps even more likely, is that some managed care companies rent their provider lists. Psychiatric News asked Allen Daniels, Ed.D., CEO of Alliance Behavioral Care in Ohio and chair of the American Managed Behavioral Healthcare Association in Washington, D.C. (the umbrella association for mental health carveouts in the United States), why a number of psychiatrists find their names on managed care panels when they have no contracts with those firms.

"I’m really aware of [the problem’s] being more of an issue on the medical side than the psychiatric side, but what happens is, the physician may sign up for a panel like a preferred provider organization plan. And what the PPO plan does, then, is rent its network out to other managed care companies. . . .So it becomes a subpanel contract."

Still another way that psychiatrists may end up in networks to which they don’t belong is via mergers in the managed care industry, according to Seth Stein, executive director of the New York State Psychiatric Association and a lawyer in Garden City. N.Y.

Breaking Free

Yet no matter why psychiatrists are included erroneously in a managed care company’s provider network, it does not mean that they must remain there for the rest of their lives, or even after death. Escape hatches do exist.

For example, psychiatrists who have been falsely placed on a managed care company’s provider list, Stein suggested, should write the company; state that they are not on the company’s panel; ask that the company remove them from the panel; and state that if the company still refers patients to them, they will tell the patients that they are not on the panel and that if they treat the patients, the patients may not be reimbursed. Vaccaro agreed with this tack and suggested that the letter be addressed to the "Director of Provider Relations" or to "Network Management."

But what if this advice doesn’t work? In that case, psychiatrists may want to report the abuse to their state department of insurance. This suggestion comes from Barry Herman, M.D., a child and adolescent psychiatrist in Austin, Tex., and a former health maintenance organization director who contracted with mental and behavioral health carveouts.

"Usually most health plans are under a fair amount of regulation about fraud with respect to listing providers who are not actually credentialed in a network," he explained. "And when a health plan contracts with, and carves out, mental health benefits to a MBCO [managed behavioral health care organization], usually it is delegating both credentialing and utilization management, as well as some other things to that entity. But [the health plan] still maintains responsibility for credentialing, which means that ultimately the health plan is responsible for what the MBCO is doing."

Still another escape strategy, Herman recommended, at least when the culprit is a mental health carveout, is to notify the health plan that has contracted with the carveout. "A lot of health plans really have poor oversight when they delegate these functions to MBCOs," Herman opined. "So they are really in the dark about these phantom networks taking place. They think they are getting a robust network when they contract with these MBCOs, but in reality they are getting just a handful of providers."