Insurance Clawbacks Are Driving Mental Health Providers Out of Practice
I am angry. And I am tired.
I completed seven years of education after high school, followed by years of supervised clinical work to earn my professional license. I did all of that because I wanted to provide excellent mental health care to the people who trust us with their stories, their pain and their healing.
I did not do it so I could spend countless hours deciphering insurance policies, correcting payer-system problems, tracking changing requirements, appealing decisions and fighting to be paid for legitimate care that was already provided.
There is a major problem in the mental health system that we do not talk about enough: insurance.
As a mental health provider and practice owner, insurance is the single greatest source of administrative stress and financial instability in my work. Clawbacks are only one part of the problem. Insurance requirements seem to change constantly. In my experience, it feels as though every six months there is another policy change, billing requirement, enrollment process or documentation rule that providers must learn and implement. Each change creates more unpaid administrative work, more opportunities for claims to be delayed or denied and more time taken away from client care.
I did not enter this field expecting it to be easy. I understood the emotional weight of the work, the responsibility of caring for vulnerable people and the challenge of running a small organization. What I did not expect was that providing care would become only one part of the job, while navigating insurance bureaucracy would consume so much of the rest.
Insurance premiums rise year after year for families and employers, yet mental health providers rarely see meaningful increases in reimbursement. In some cases, reimbursement remains stagnant while wages, rent, technology, compliance requirements and every other cost of providing care continue to climb. The result is a system in which patients pay more, providers carry more administrative burden and it becomes harder to keep community-based mental health services available.
Then there are clawbacks.
Recently, my group practice received multiple letters from Colorado Community Health Alliance, a regional organization in Colorado's Medicaid program, stating that it intended to recover thousands of dollars previously paid for services dating as far back as 2021. This is 2026. The stated reason was that the clients were later found to have other insurance that should have been billed before Medicaid.
To be clear: the services happened. They were clinically necessary, delivered by real providers and documented. This was not a situation in which my practice billed for care that did not occur. We billed Medicaid based on the eligibility information available to us at the time, and the claims were accepted and paid.
Years later, the financial responsibility is being pushed back onto the provider.
The impossible position for small practices
Providers can verify the coverage information available to us, but we cannot independently know every insurance policy a client may have. We rely on clients, state eligibility systems and insurers to provide accurate and timely information. If a client does not know about another policy, does not disclose it or provides incomplete information, a practice may submit a claim to Medicaid in good faith.
If Medicaid pays that claim and then identifies other coverage years later, the practice may have no realistic way to recover the money:
The commercial insurer's timely-filing deadline may have expired long ago.
The client may no longer receive services from the practice.
The provider has already been paid for the work performed.
The practice has already paid payroll, taxes, rent and other expenses associated with that care.
The records may be years old, while the practice receives only a limited window to research and challenge the recovery.
In other words, the organization that had access to Medicaid eligibility and coordination-of-benefits systems can identify other coverage years later, while the small provider is expected to absorb the entire loss.
That is not a meaningful remedy. It is a transfer of risk to the party least able to bear it.
The policy contains a dangerous gap
Colorado lawmakers have already recognized the harm caused by retroactive recoveries. A law effective in 2023 generally prohibits certain Medicaid managed-care plans from recovering provider payments more than 12 months after a claim was paid. It also restricts recovery in some situations involving eligibility determinations or plan processing errors.
But the law includes an exception when Medicare, commercial insurance or another third party should have been the primary payer. That exception leaves providers exposed to exactly the kind of situation I am describing: a claim can be paid based on the information available at the time, another insurer can be discovered years later and the provider can be left with no practical path to payment.
The existence of a legal mechanism does not make the outcome reasonable or sustainable.
When a provider delivered and properly documented legitimate care, relied on the coverage information available at the time and can no longer bill the newly identified insurer because of timely-filing limits, the answer should not be to make the provider work for free.
This harms patients, not just providers
It may be easy to view a clawback as an accounting correction. For a large organization, thousands of dollars may be a line item. For a small mental health practice, it can mean delaying hiring, reducing services, freezing wages, declining to accept certain insurance plans or closing altogether.
Every hour spent locating years-old claims, gathering records, writing appeals and calling payer representatives is an hour not spent supporting clinicians, building programs or expanding access to care.
This is especially troubling when practices are trying to serve Medicaid members and other communities that already face significant barriers to treatment. We regularly hear that there are not enough mental health providers willing to accept insurance. We should be honest about one of the reasons why: accepting insurance can expose a provider to unpredictable financial losses years after care was delivered.
My experience with multiple insurance payers has shown me that this problem is larger than any single company. It is a system that gives payers enormous control over reimbursement while leaving small providers with limited leverage, short appeal windows and a crushing administrative burden.
What needs to change
We need reforms that protect public funds without punishing providers who acted in good faith. At a minimum:
Payers should be required to identify other coverage and notify providers within a reasonable, clearly defined period.
If other insurance is discovered after that insurer's timely-filing deadline, the provider should not be required to return payment unless there is evidence of fraud, duplicate billing or a material billing error by the provider.
When repayment is disputed, funds should not be taken until the provider has had a meaningful opportunity for independent review.
Appeal periods should be reasonable and proportionate to the time the payer took to identify the issue.
Providers should receive clear claim-level evidence, an understandable explanation and access to a real person empowered to resolve the dispute.
Policymakers should evaluate the cumulative administrative and financial burden placed on small and nonprofit behavioral health organizations.
Accountability matters. Fraud should be investigated, duplicate claims should be corrected and genuine billing errors should be addressed. But legitimate care delivered in good faith should not become unpaid labor years later because multiple insurance systems failed to coordinate coverage in time.
I am speaking publicly because quiet appeals and private frustration have not fixed the underlying problem. Small practices should not have to choose between accepting publicly insured clients and protecting their own financial survival.
If insurers and state agencies want more providers to participate in their networks, they must stop treating those providers as an unlimited source of free labor and retroactive repayment.
Mental health providers are trying to keep the lights on, pay clinicians fairly and care for their communities. We should not have to live with the fear that, years from now, an insurer can take back payment for care that unquestionably occurred, leaving us with no realistic way to be paid.
The public deserves to know that this is happening. Providers deserve a fair process. And patients deserve a mental health system that does not financially punish the very organizations willing to serve them.