CareSource reverses course on recouping overpayments from some behavioral health providers

May 1—Dayton-based health insurer CareSource is reversing a previous decision to seek repayments for the last two years from behavioral health providers that the nonprofit said it had been overpaying for a number of years for services for CareSource members.

In late April, certain behavioral and mental healthcare providers in Ohio received notices from CareSource that it had found an error in how it had calculated reimbursements paid to the providers. CareSource had planned to seek repayment from those providers for two years of overpayments — the maximum state law allows. CareSource planned to start by giving the providers a bill for two months of overpayment.

After receiving pushback from providers and learning how this could impact its members, CareSource announced it will not be seeking the recoupments but will still go forward with the correct rate reimbursements in the future.

"Earlier this month we notified some behavioral health providers in our network that CareSource had inadvertently overpaid them and would be implementing the correct rates consistent with the terms of their contracts, both retrospectively and for future claims. Individual providers impacted by this change will be notified. This action did not represent a rate reduction," a statement from CareSource reads.

Behavioral and mental healthcare providers who recently spoke with the Dayton Daily News said that if CareSource sought repayment for the full two years, it could have potentially closed their doors or led them to not being able to accept CareSource insurance in the future.

"After direct conversations with providers over the past several days, CareSource has decided to suspend the recoupment of those overpayments. The providers we spoke to shared that the recoupment would create significant financial strain and could impact access to care for members. That feedback directly informed our decision," CareSource's statement said.

The overpayment was discovered during a review of past payments CareSource had made to behavioral health providers.

Reimbursement rates for physicians providing behavioral health services are set at 100% of the Medicaid maximum rate, while they are 85% for non-physicians, like clinical nurse specialists, certified nurse practitioners, and physician assistants, according to the Ohio administrative code, the section of which was updated Jan. 1, 2024.

CareSource had been paying all behavioral health providers, not just physicians, 100% of the Medicaid maximum when the health insurer said it should have been reimbursing the non-physician providers at 85%.

"Future claims will be paid at the correct rate based on the terms of our provider agreements, which apply rates in specific circumstances based on service, provider type and clinical setting. Applicable behavioral services rendered by a licensed or supervised practitioner are reimbursed at 85% of the established Medicaid fee schedule in most cases," CareSource's statement said.

"As behavioral health costs continue to rise, CareSource is committed to working with Ohio's healthcare community to advance a high-quality and sustainable behavioral healthcare system. We look forward to collaborating with the state, providers and other health care partners to ensure access to critical services for Ohioans."

Other routine recoupments unrelated to this instance of overpayment will still take place. In Ohio, health insurers have two years to recoupment overpayments from providers, but Senate Bill 162 — a bill that was just recently passed in the Ohio Senate and has moved on to the Ohio House — would reduce that time frame down to one year.

Providers cautious about the change

CareSource's announcement offered providers some relief, but concerns remained about the notice's wording and future reimbursements.

"We are pleased that we don't have to go through the process of submitting all of our disputes, although we're a little concerned about the wording," said Melissa Kappes, one of the co-owners of The Counseling Professionals, a practice based in Mason.

The Counseling Professionals works with about 17 clinicians, plus Kappes and the other co-owners, Tonya Chatlos and Karen Barnes.

In the notice Kappes' practice received, CareSource said it was "suspending" the recoupments stemming from these overpayments, so she and other providers are worried CareSource may try again at a different time.

"We're cautiously happy, but we're not certain this is completely settled," Kappes said.

CareSource will also be going forward with the corrected reimbursement amounts, and while CareSource says this is not a rate reduction, providers will still be taking in fewer funds than what they had previously budgeted for or expected.

"We'll definitely feel the impact," Kappes said.

With CareSource clients, Kappes said providers are not allowed to charge for late cancellations or missed appointments, so they already deal with possible lost hours with no reimbursement.

"Whenever we choose to take on a CareSource client, we know already we could have tremendous gaps in our time when we're not getting paid," Kappes said.

Now that CareSource will be reimbursing them at 85% of the Medicaid maximum reimbursement rate instead of what they were previously used to when they received 100% of the Medicaid maximum reimbursement rate, they face another financial challenge.

"That's something else we have to consider. We have to be able to make enough money to keep our doors open," Kappes said.

Kappes said they might not take on as many CareSource clients in the future or they may refer those clients to community mental health resources.

"We won't walk away from CareSource, but we'll definitely have to consider how many CareSource clients we do see because this is still a drop in pay and it is still significantly below any other reimbursement that we get," Kappes said.

Monica "Mo" Hill, a neuropsychotherapist and clinical mental health counselor who runs her mental health practice Untangled Thoughts in Midland in Clinton County, is also feeling cautious about CareSource suspending the recoupments.

"It's a move in the right direction, and I'm appreciative of that, I'm just hesitant by what it means by suspension," Hill said, adding she didn't know if this would be a temporary or permanent decision.

Hill is also concerned she will see reimbursements lower than what she has traditionally seen from CareSource, despite CareSource saying this is the rate they should have historically been paying.

"As it is, we take cuts to be able to serve our community, so we negotiate with the managed care plan to say, 'We will accept what you're willing to pay,' which is well below our fees, but we do that for our community," Hill said.

Social workers protest CareSource

At CareSource's Dayton headquarters on Friday, May 1, a group gathered to protest the recoupments, despite CareSource suspending them. They also called out how some behavioral health providers will be getting lower reimbursements than what they are used to, saying this is a field in which people cannot afford to work.

"We already have too few providers. We already have wait lists. We already have social workers and counselors leaving the field because they cannot afford to stay because we are chronically undervalued," said Danielle Smith, executive director of the Ohio and Kentucky chapters of the National Association of Social Workers.

Holly St. Pierre, a local behavioral health provider whose practice, HRS Counseling Services, has three locations, spoke about how her practice may have to close due to ongoing financial strain, saying it was due to CareSource.

"I may soon have to tell my clients I can't see them anymore," St. Pierre said.

Multiple Dayton-based nonprofit organizations doing outreach are also at risk, she said.

"Courts and community programs will lose critical clinical partners," St. Pierre said. "Already overburdened nonprofits will absorb demand they are not resourced to meet."

State Rep. Karen Brownlee, D-Symmes Twp., pointed out funding cuts are coming for Medicaid due to HR 1 — the federal reconciliation bill also called the "One Big Beautiful Bill Act" or the "Working Families Tax Cuts Act."

Ohio is projected to lose about $33 billion over the next decade for the Medicaid program, according to KFF, a national policy research organization.

Brownlee also promoted the idea getting rid of the managed care system that most Medicaid enrollees are a part of while discussing the bill she introduced, House Bill 780, called the "Medicaid Savings Act." The bill would terminate the managed care system within the Ohio Medicaid program and transition Medicaid recipients enrolled in a Medicaid managed care organization plan to the fee-for-service component of the Medicaid program.

"This is a single-payer program where we would go from seven managed care organizations to one administrative service organization," Brownlee said. "That ASO would not make legislators determine how often we get reimbursement increases. They would look at the data, look at the outcomes, look at what we're doing, and look at the medical economy to determine what fair payment is."

CareSource administers one of the largest Medicaid managed care plans in the U.S., offering health insurance — including Medicaid, Health Insurance Marketplace and Medicare products — to more than two million members across 12 states.

Across the CareSource brands, the company saw more than $13 billion in revenue in 2024, according to nonprofit tax filings, with earnings exceeding $386 million.

Behavioral, mental healthcare overpayed for years, says insurer.

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