The digital mental health platforms Alma and Headway notified therapists in a number of states recently that new contracts with UnitedHealth’s Optum subsidiary meant their pay would be cut, stirring a flood of angry responses.
The pay cuts for clinicians using these two platforms for UnitedHealth-Optum clients affect several mental health procedures, and range in size from a few dollars, to $7 a visit, to $43 a visit, or a cut of 30 percent, therapists said. Therapists discussing the cuts said they would mean an aggregate annual income loss of $6,000, or $13,000, or $28,000. Some therapists said they would no longer accept clients through Alma or Headway.
One psychologist with Headway wrote in an email: “I am a psychologist in NY and I see Optum patients through Headway. Last week I got an email from Headway that rates for Optum patients were decreasing from $144.27 for 90834 (45 minute psychotherapy session) to $103 as of 1/1/2025. Outrageous!”
One New York psychologist and psychoanalyst said she is contemplating ending her practice because of the UnitedHealth-Optum Alma rate cuts. One New York clinical psychologist with Headway said he was going to stop taking patients “with Optum insurance (UHC, Oxford, Oscar) and to inform my 14 patients with this insurance that I may stop taking their insurance come Jan 1st.”
Several therapists noted that the Optum rate cuts come as some therapists are struggling to fulfill Optum’s recently announced practice of “pre-payment review,” requiring that therapists send extensive documentation — treatment plans, session notes, hospital records, details on the lab machines used in lab tests — before it would pay claims. Optum said it has paused the practice, but some therapists have continued to say they aren’t getting paid.
Notifications
The Alma and Headway platforms match clinicians and patients, and include things like credentialing and billing services, to relieve clinicians of these duties. They also generally promise higher pay rates from insurers than what individual therapists get.
Alma and Headway gave similar explanations, but different rate cuts. “We recently concluded a contract renewal process initiated by Optum,” the Alma notification to clinicians said. “As a result of this process, you will see a reduction in reimbursement rates for some codes you bill for Optum clients beginning December 1st.”
“We recognize that this directly impacts your financial well-being, and a reduction in rates is never the outcome we hope for. We have absorbed as much of this reduction as possible, and we are actively working to find new ways to help your practice grow, including EAPs and other premium programs available exclusively to Alma members.”
The email adds that Optum clients with a deductible or coinsurance may see their cost per session decrease.
Headway sent a similar notification on Oct. 24. After a brief introduction saying a change is coming affecting clients under Optum, which administers healthcare pay for UnitedHealth, Oxford (a United subsidiary) and Oscar under Headway, it says:
“Our Optum rates will change on January 1, 2025. You can preview the updated rates here.
“A few other things to note:
“Your new rates reflect exactly what we’re paid from Optum directly, meaning Headway will make $0 on your Optum appointments.
“We will continue to take on any costs associated with clawbacks or denials for you.
“These are still the highest rates we are offering to any Headway solo provider with your license type in your region at this time.
“Our goal has always been to only maintain or increase rates, and pay above market. This is not something we’ve ever done before, or have any plans to do again. …
“Earlier this year, Optum went through internal changes and reexamined their agreements with large organizations like Headway. This was an atypical event that resulted in less favorable agreements for Headway, driving lower rates. Headway has historically seen a loss on the rate we’ve paid you; with the new agreement, we will incur an even greater loss on these appointments. We’ve determined we cannot support your historical rates on this new contract.”
It is not clear how widespread these cuts are, or how many people — patients and clinicians — are affected. We have seen reports from many states and from people with different qualifications and degrees.
In Alma’s case, Reddit is full of complaints. There is little or none of that on Reddit regarding Headway. Headway’s note ends: “Please note: This change will only impact providers who received this note directly on October 24, 2024.”
The Current Procedural Terminology (CPT) codes most frequently mentioned online as marked for cutbacks were the common 90834 (psychotherapy, 45 minutes with patient) and 90837 (psychotherapy, 60 minutes with patient), though both Alma and Headway also included several other mental health codes.
In response to messages inquiring about details posted on therapist listservs and social media, I received dozens of complaints, which is surprising in that many therapists do not see a great upside in discussing their problems with journalists. Almost all echoed this sentiment, from one writer: “I do prefer to remain anonymous as I am fearful of any legal ramifications from the insurance carriers or from Alma itself.”
Therapists do not negotiate with UnitedHealth’s Optum on their own behalf, but instead have Alma and Headway as intermediaries to the insurers on those platforms.
We did not see evidence of rate cuts from Optum outside of those two platforms.
The notifications to therapists went out on Oct. 24 (Headway) and Oct. 31 (Alma) — so patients or clients (or, as we like to call them, “people”) may not know about this switch or about its implications. Alma said it would notify patients no later than Nov. 22. We have not heard from patients.
Alma has a “community hub” on its platform, where one therapist told us “there are multiple threads about the Optum announcement that are brutally critical of Alma.”
Mental health platforms
Alma and Headway, like Grow, Rula and others, are online platforms that try to bridge gaps between payers, therapists and patients; therapists can register and pay fees or give a cut of their pay to the company, gaining aid in billing and access to assets like credentialing, an electronic health record, a pool of patients, a telehealth platform, a scheduler and clinical assessment tools. They have grown quickly because they promise to alleviate the burden of practice management for a therapist, and can offer higher pay rates, and also because they promised answers to telehealth procedural questions that sprang up early in the pandemic.
Some who object note that these platforms take a cut of the therapist’s pay — or they charge a fee or fees — and also that they have access to varying amounts of patient and clinician data. The models differ, and the therapist is not required to store detailed records in every case, but the data access raises privacy concerns for some. Some also complain that these companies take charge of their professional listings in Psychology Today and Zocdoc, which are sources of referrals to therapists.
Some therapists are strongly opposed to the platforms, saying that they are destroying the profession by taking control of functions that should be performed at the individual or practice level.
Company responses
In response to a query about the scope of the rate cuts, who is affected, what is the size of the cuts and whether the cuts could be appealed, an Alma company spokesperson wrote in an email: “Unfortunately we are not able to comment on specific terms of our agreements with insurance companies including rates. We remain committed to helping providers build financially rewarding practices where they are fairly compensated for their vital work and supporting clients with high-quality mental health care, particularly during a time when access to mental health services is more important than ever before.”
UnitedHealth-Optum did not respond to a request for comment. If they do, we will update.
In response to a detailed request for comment about the scope of the rate cuts, who is affected, what is the size of the cuts and whether the cuts could be appealed, a Headway spokesperson wrote by email: “Less than 1% of providers on our platform were impacted by this change.
“Headway is a platform available to providers at no cost that helps them run and grow their private practice so they can focus on care delivery. We know providers’ livelihoods are informed by the rates we are able to negotiate with health plans, and we take this seriously.
“We’re committed to continuing to negotiate the strongest rates possible for them. This type of change is extremely rare and we prioritized doing everything we could to minimize impact to our providers — and to give them several month’s notice so they have time to adjust their practice if needed.”
On background, they added, “Less than 340 providers (out of our network of 40,000+) have been impacted by this change.” We inquired why these 340 were affected, and are awaiting an answer.
June Feder, a psychologist practicing in Manhattan who is chair of the New York State Psychological Association insurance committee, said her comments reflect her own views and experience and not official NYSPA policy.
“We have been hearing from a number of our members who participate in those platforms – that they have been notified about a reduction in reimbursement rates originally offered at a significantly higher level in comparison to ‘standard’ in-network provider compensation. In one case, a member reported a 29% decrease in the rate,” she wrote in an email.
“When this was first introduced and members began to sign on, when I was asked for my view I pointed out that there were potential risks; including privacy issues and adherence to HIPAA protections. We advised that it would be wise to review the contract they are asking you to sign with a practice-knowledgeable attorney and that changes could be expected at any time. We are not surprised.”
A spokesperson for the American Psychological Association said they had heard nothing about the issue.
‘Utterly demoralized’
One licensed psychologist in New York State wrote of Alma: “Yes, I got the notice. I attended a town hall about it yesterday and feel utterly demoralized.
“I expect to lose about 6,000/year based on my current caseload. Aetna will be next and other companies will likely follow suit since they know they can get away with it with zero repercussions. My plan is to continue to build my private pay clients.
“It makes me sad because I fundamentally believe that everyone should be able to get therapy, not just those who can afford to pay privately, but I literally cannot afford to pay for my office space and health insurance based on in-network rates. Psychologists are expected to meet the same privacy and professional standards as medical doctors (ie pay for office space, liability insurance, billing, etc,) but we get paid substantially less. Parity is a myth.”
Many therapists echoed her thoughts about taking insurance to make it possible for more people to access mental health care, instead of having private pay clients, which may be out of reach financially for the client.
Before the notice, she discussed the ease of working with Alma, which she has been using for a year and a half. “One of the things that they promise is to get you credentialed with the insurance companies, which can take months and months,” she said. “They offer a lot of things so that instead of having to pay for all those things separately, it’s one-stop shopping. You can get your [HIPAA-compliant] Zoom platform through them, they offer electronic medical records, and networking opportunities. They manage your billing, they have a way for you to process payments, and their rates are so much higher.”
She was already credentialed through insurance before joining Alma. What was attractive to her was higher rates from insurers through Alma. She has a number of private patients, separate from insurance, and she moved their billing to Alma also, because of the ease of collecting credit-card payments.
“Alma also pays the money upfront, and they wait to collect from the insurance company, which is also really nice, because the insurance companies can pay very, very late,” she added. “I’m probably still waiting for payments from May.” She does keep her patients’ records out of Alma’s system, she said, for privacy reasons.
Alma rate cuts
The rate cuts were not clear, and seem to vary state by state and by the credentials of the therapist. This chart from a New York area therapist who spoke on condition of anonymity represented her rates, old and new. She is an M.A. and Licensed Mental Health Counselor.
One PhD psychologist wrote on condition of anonymity: “The amount of the reduction seems to vary a lot, by state, billing code (length and type of session) and license type (psychologist, social worker, MA level counselor etc.). I am a psychologist licensed in NJ and NY, and I expect to see a reduction of about $8,000/year in income as a result. For me, in NY, the rate for 90834 (45 min session) was reduced by about $15 and in NJ, the reduction was about $10. The decrease is particularly crushing because the rates are already low, and haven’t increased as cost of living increased. With the current reduction, the rates will be less than they were in early 2022, while my grocery bill has risen to a shocking extent.”
Another New York therapist with Alma wrote on condition of anonymity: “I am an LCSW in New York and we will be seeing a reduction of $8.80 for 90837. There is no reduction in 90834. 90840 (30 minute crisis session) will be reduced by $3.83, and 90785 by $2.98 but of course those are less frequently used.”
A PsyD clinical psychologist from Manhattan wrote in an email on condition of anonymity:
“90837 down from 172.19 to 160.00
“90834 down from 152.08 to 137.00
“90847 down from 152.08 to 140.43 (this is family/couples therapy)”
A Virginia licensed clinical social worker with Alma wrote, asking that we not use her name: “I am in Northern VA, have been with Alma since May and yes, they did reduce the reimbursement for 90837 in VA by $6 a session, effective December 1. I am in somewhat unique position as I am also a client of an Alma therapist and UHC is my insurance provider, so I am expecting to find out in early December from my whether UHC did in fact cut the rate or not.” She is also with Headway, but Headway has not been paneled with UnitedHealth-Optum in Virginia.
The New York psychologist and psychoanalyst, also speaking on condition of anonymity, said she is still trying to assess the total impact. She has seven clients with Alma and six non-Alma. She described herself as “very senior,” and is well past the normal retirement age. (I agreed not to reveal her age because it might be an identifying factor, and like others I talked with, she did not want to deal with retaliation from UnitedHealth-Optum or Alma.)
“I am in very good health and I have no plans for retirement,” she said in a phone interview. “My feeling is the longer I do this, the better I do it.
“But with this cut in the rates, I am beginning to think I am working for the sheer pleasure of it. The lower my income gets, and the more stable my expenses are, or even as they rise, the harder it is to justify me staying in practice. I certainly don’t want to be working if my profit is $10.25 for the month. That does not work.”
She added: “When Alma came in, they were going to be the savior. They originally offered rates much higher than others. But now….”
Headway rate cuts
Another New York clinical psychologist wrote on condition of anonymity: “Headway announced an Optum rate decrease as of Jan 1st 2025 of 30%. For me that would translate into a 28K yearly decrease in income. My reaction was to immediately stop taking patients with Optum insurance (UHC, Oxford, Oscar) and to inform my 14 patients with this insurance that I may stop taking their insurance come Jan 1st.”
Another New York psychologist wrote, also on condition of anonymity: “Current Optum rates through Headway for doctoral level psychologist: 90834: $144.27, 90837: $171.30, 90791: $192.92.
“The new Headway Optum rates are actually lower than what Optum would pay without Headway. Optum pays $114.95 for 90834 and $169.13 for 90837. This change has forced me to make the difficult decision to withdraw from Optum completely. My patients are in great distress.”
Several other New York area clinicians wrote with similar experiences. Several have a PsyD degree, or Doctor of Psychology, which is similar to a PhD, except it usually pursued by people interested in the hands-on practice of psychology in clinical settings, without dedicating time to research or academia.
Reddit in flames
On Reddit, the r/therapists subreddit was in flames, almost exclusively about Alma. Therapists from California, New Jersey, Massachusetts, Colorado, New York and Missouri wrote that they were affected. Many of our responses were in the New York area.
One therapist kicked off the discussion on Reddit: “I initially switched to Alma because their rates were higher than Headway’s, but now I’m questioning if the subscription fee is worth it. Alma sent an email today stating that Optum (including UnitedHealthcare, UMR, and Surest) rates are decreasing by $7. I’m now considering getting paneled independently. Has anyone else experienced this? I’m in NJ—curious to hear if similar issues have come up in other regions.”
One wrote: “Im in MA. 90834 is decrease by $20 per visit with Optum via Alma! Im dropping UHS with Alma.”
Another: “Headway and Alma both have seemed to be having conflict with Optum, I assume because Optum is paying them a lot more than they pay other practices (ex: in my state Optum pays $110.30 for a 90837, but they pay Alma $151 (clinician gets $130, now $120) and Headway something like $130 (clinician gets 112)). We’re basically out of luck either way.”
Another: “My Optum rates were dropped by $43. … Optum is half my caseload and now I have to refer all these clients out because they can’t afford self pay. I’m not sure I’ll be able to fill them. I always have a wait-list but now I’m left with only Aetna and that’s going to make things very tough. I did the math and this Optum decrease will cost me about 13k in 2025.”
The nature of the relationship
Lynne Spevack, a licensed clinical social worker who is a psychotherapist and practice-building consultant in Manhattan and Brooklyn, said she is not part of Alma or others, and is not in any insurance panels – all her patients are private pay.
“In my experience, many clinicians don’t understand the true nature of their relationship with companies like Alma, Headway and Grow: they think of them as similar to a billing service, i.e., as providing services to the clinician (e.g., credentialing, billing, negotiating reimbursement rates), despite the significant fact that the clinician isn’t paying for that service,” she wrote in an email. “In fact, the clinician is a 1099 employee of the company, and is not practicing independently in that regard.
“I’ve long anticipated that it would turn out to be a bait and switch gambit in that in the early days Alma, Headway and Grow were behaving in ways to entice and enlist clinicians, but once they have sufficient clinicians, they would begin to show their true colors, and their policies and procedures might not be as clinician-friendly. We’re starting to see this happen, with more case record reviews, moving towards having clinicians upload their client records onto the company website, and now with Alma reducing reimbursement rates.”
One person familiar with therapy billing wrote on condition of anonymity: “I’m guessing that OPTUM gave them such higher-than-normal rates at the beginning when they were smaller and now that so many therapists are on board they are rethinking the high rates they offer (which are usually significantly higher than an individual provider could get on their own).”
Optum is an investor in Alma
In 2022, Alma raised $130 million in Series D funding led by Thoma Bravo, a software investment firm, with participation from Cigna Ventures. “Existing investors Insight Partners, Optum Ventures, Tusk Venture Partners, Primary Venture Partners, and Sound Ventures also participated in the round, bringing the company’s total funding to over $220 million,” the company said in a press release.
In response to a query about the size of Optum’s investment, the Alma spokesperson wrote in an email: “With respect to Alma’s funding, we have raised capital from multiple venture capital funds including Thoma Bravo, Insight Partners, Tusk Venture Partners, First Round Capital, Primary Venture Partners, Rainfall Venture, Sound Ventures, BoxGroup, Optum Ventures and Cigna Ventures. While we cannot comment on the specific ownership of any particular fund, Alma is a fully independent business and all existing investors have minority ownership stakes in Alma. You can see more information in our press release from our most recent funding round.”
Alma laid off 9% of its workforce in early October, saying it needed to “re-focus resources.”
Headway raised $100 million in July, bringing the company’s valuation to $2.3 billion. It was founded in 2021, and says its mission is “building a new mental healthcare system.” It now claims 40,000 providers in all 50 states and the District of Columbia.
It is not uncommon for clinicians and observers of the healthcare system to point out that Startup World is focused on making money, and that goal will be paramount in a company’s calculus. That is doubly and triply true of venture-funded companies. So it might not be a complete surprise that patient or clinician welfare takes a back seat to making money.
It is also true that mental health practitioners find the drudgery of insurance niggling to be repugnant and time-consuming, as the country battles a mental health crisis exacerbated by the pandemic — so the platforms’ offer to take on that burden is attractive. Also, an increasing number of practitioners refuse to accept measly insurance rates, along with their heavy paperwork requirements — leaving people who want mental health care to either pay out of pocket, or go without.
In this regard, mental health professionals are subject to pressures similar to those on urgent-care centers, or veterinarians, or dentists, or fertility doctors, or healthcare practitioners in other specialties who have found attractive the offers that someone else would do the heavy lifting with insurers and other bureaucracies, so they can practice medicine — and discovered that the offers from private equity or venture capital are not without tradeoffs.
The possibility that reduced mental health treatment is a violation of the Mental Health Parity and Addiction Equity Act, requiring that insurers supply mental health benefits at the same level that they supply medical-surgical benefits, is also a point of discussion.
The records of other fast-growing mental health startups also form an instructive background.
“Virtual mental health startup Cerebral has agreed to pay the government more than $7 million, abide by a ‘first-of-its-kind’ restriction on the handling of consumers’ sensitive information and rework its service cancellation practices, the Federal Trade Commission (FTC) announced Monday,” Fierce Healthcare wrote in April 2024. A former executive filed a suit against Cerebral saying he was fired after he complained that the company was too quick to prescribe stimulant drugs.
In June 2024, the Department of Justice and the Federal Trade Commission sued Cerebral; the company’s founder and former CEO Kyle Robertson, and former executive Alex Martelli; as well as telehealth companies Zealthy Inc. (founded by Robertson), Gronk Inc., and Bruno Health P.A., and an executive of those companies, German Echeverry, for improperly sharing patient information, among other charges, TechTarget reported.
Venture-funded Cerebral was once valued at $4.8 billion.But with its repeated challenges, it’s not likely that this value still holds.
Two top executives of another digital mental healthcare company, Done Health, which gave psychiatric chronic care management, were arrested in June 2024 in a $100 million scheme, MobihealthNews wrote: “According to the Justice Department, California-based Done Global’s founder and CEO, Ruthia He, and Done Health’s clinical president, David Brody, were arrested in connection with allegedly conspiring to commit healthcare fraud via submitting false and fraudulent claims for reimbursement for Adderall and other stimulants, for obstructing justice and for allegedly participating in a scheme to distribute Adderall online.”
‘Avoiding like the plague’
A New York State therapist, discussing Alma and similar platforms, wrote that she is “avoiding them like the plague.”
“The patients aren’t really my patients, because they bill under their [National Provider Identifier number],” she wrote by email. “It’s a no brainer that these initially higher rates are going to go down, and administrative/paperwork demands with associated risk of patient privacy invasion are going to go up as time passes.
“My younger colleagues are finding their offers too good to pass up, but my predictions seem to be happening.”
Before the rate cut, the New York State psychologist who pegged her anticipated losses at $6,000 spoke of the profession’s assessment of Alma and similar companies. “People say it’s just too good to be true, and maybe it is — maybe that’ll come to light over time,” she said in a Zoom interview. “Within psychology, there’s a lot of division, with some people saying, this is the end of private practice — ‘Nobody should do this,’ ‘That’s terrible,’ ‘You’re betraying your profession.’
“But I think this is how healthcare is going right now. It’s not business as usual, where people open up a practice, and they see two patients a day for a large amount of money each, and they can see them indefinitely, and insurance will just keep paying it. Those days are done.”
What can you do?
If you have information about insurance payments for mental health care, or other issues you think we might want to know about, email jeanne@clearhealthcosts.com or use our secure Signal at 914-450-9499.
For clinicians: It may be worth discussing this with a professional association, like the New York State Psychological Association or the American Psychological Association, if you are a member.
The APA Services and the American Psychiatric Association recently told Optum how onerous its “pre-payment review” policy is, and Optum said it was discontinuing this practice, though we have still heard of people who are not getting paid.
Register your objections with the insurer and the platform.
This is obvious, but the decision to use Alma, Grow, Headway or others is one only you can make: Does it make sense for you and your practice?
Regulators and legislators have an interest in helping; consider raising these issues with your elected representatives or regulators.
For patients, or, as we like to call them, people: The Consumer Finance Protection Bureau has a complaint system.
We have learned in many years of immersion into the healthcare marketplace that many therapists decided long ago not to accept insurance payments. If you’re unsure about who accepts what, the practice’s website may be informative.
Psychology Today has a find-a-therapist function, with therapist profiles including, quite often, the insurance they take and a statement of hourly cash rates. You can do a zip-radius search to find therapists close to you.
Regulators and legislators have an interest in helping; consider raising these issues with your elected representatives or regulators.
If you have information about insurance payments for mental health care, or other issues you think we might want to know about, email jeanne@clearhealthcosts.com or use our secure Signal at 914-450-9499.
