Savannah Lord, who directs a nonprofit mental health clinic in Burlington, was taken aback this month upon receiving an email from Blue Cross Blue Shield of Vermont, similar to many of her colleagues across the state.
What unfolded afterward sheds light on the intricate realm of health insurance in the U.S., often bewildering even the companies responsible for setting reimbursement rates. This complexity can complicate efforts aimed at improving patient care.
A message dated November 5 from Tom Weigel, the chief medical officer at Vermont’s primary private insurance provider, outlined upcoming billing changes. Beginning in January 2026, unlicensed mental health providers will face a 24% reduction in payment compared to their licensed counterparts.
Weigel explained that the goal of this change is to motivate unlicensed healthcare providers to achieve licensure while aligning private insurers’ mental health service reimbursements with those of Vermont Medicaid. The insurer’s inquiry indicated that some trainees remained unlicensed for over a decade, with little progress toward obtaining their licenses.
Lord quickly recognized the significant financial implications this policy could have on her practice, Eden Valley, which serves patients from all age groups. Nearly 75% of the clinic’s earnings come from patients with Blue Cross Blue Shield coverage.
“This is how we keep our doors open. It’s how we pay our bills,” Lord remarked.
Moreover, she took issue with the email’s assertion that Vermont Medicaid rates should be reflected in mental health. Under Vermont’s low-income program, all practitioners at Eden Valley receive the same compensation, irrespective of their licensing status.
“The idea that we’ve been overpaying for years is quite concerning,” Lord said.
In response, mental health providers around Burlington quickly united against the proposed changes by circulating letters of protest among patients and fellow clinicians. They also engaged with community platforms, noting that these cuts would likely worsen the state’s shortage of therapists, particularly those accessible through insurance.
This week, Blue Cross Blue Shield of Vermont informed mental health professionals that it would pause the changes to collect more feedback.
“We received input from some providers who disagree with this policy and we’re taking that into account,” stated Andrew Garland, the company’s vice president.
“While we believe this is the right course, we aim to delay the implementation to allow further discussions with our network and community leaders,” he added.
(Mis)coordination with Medicaid
Lynn Currier, an executive director at the National Association of Social Workers, emphasized the importance of the licensing process for consumer protection. It ensures that practitioners undergo required exams and continuing education to maintain their licenses.
“While it’s true there are some who have been unable to obtain licensure for many years, Blue Cross Blue Shield’s reasoning is not entirely misplaced,” she stated. “But untangling the licensing status of providers is complicated.”
Many mental health professionals in Vermont can practice without a license, according to Deputy Secretary of State Lauren Hibbert. The state lacks a streamlined means to monitor these unlicensed practitioners, necessitating that they register within a system to track their treatment activities.
Some of those listed may have degrees and are working towards licensure, while others may not intend to pursue licensing at all.
The situation is further complicated as Blue Cross Blue Shield’s Weigel asserted that reducing payments for unlicensed clinicians aligns with Medicaid standards, but he missed key inconsistencies in actual Medicaid reimbursement rates.
Vermont Medicaid compensates many trainees at 76% of its established fee schedule, not distinctly based on licensure status but rather on educational attainment, creating confusion.
Alex McCracken, a spokesperson for the Vermont Agency for Health Access, noted that Medicaid has differentiated payment rates for a long time, but no changes are slated for the future.
“We need to get this right.”
Despite the concerns raised regarding long-registered unlicensed clinicians, Blue Cross Blue Shield’s initial intent remains valid.
Officials indicated that both the Agency for Health Access and the state’s Office of Professional Regulation are actively working on solutions to clarify licensure statuses.
By 2026, unlicensed providers will need to be individually enrolled in Vermont Medicaid, a shift that should aid in determining who is genuinely pursuing licensure.
Initially, efforts to address this issue included a five-year billing limit on registered professionals; however, due to feedback from providers, that rule is expected to be repealed at the end of next year.
One proposal suggests introducing two distinct qualifications for unlicensed professionals—one for those training for licensure and another for those opting to remain unlicensed. Other states, like New Hampshire and Massachusetts, have introduced conditional licensure for trainees.
“It’s crucial that the public recognizes the difference between seeing a licensed therapist and someone who is unlicensed,” Hibbert remarked. “I think financial adjustments in reimbursement might be necessary.”
Weigel raised another point in his communication about the supervision of trainees, expressing concerns regarding the potential for supervisors to prioritize profit over quality supervision.
Garland acknowledged the importance of discussions with providers about these issues, indicating that the delay in rate changes would allow for more engagement with stakeholders. “Ultimately, we need to get this right for our members, many of whom are facing healthcare cost challenges,” he wrote.
Some clinicians worry that decreased reimbursements might dissuade qualified professionals from taking on the responsibility of mentoring trainees.
“Supervising someone who isn’t licensed requires substantial oversight,” explained Daniel Bergeron Ingram, a psychologist. “A lot of time goes into reviewing treatment notes to ensure quality service,” she noted, echoing concerns that low reimbursements could create further barriers in pursuing careers in therapy.
“If compensation isn’t fair, it raises the question—why would anyone choose to pursue this path?”
