Blue Cross Blue Shield of Vermont has delayed a planned billing change that alarmed mental health providers across the state and raised concerns about future access to care.
Earlier this month, Savannah Lord — clinical director of Eden Valley, a Burlington nonprofit clinic — received an email from the insurer describing a major shift in reimbursement rules. The message, sent by Chief Medical Officer Tom Weigel on Nov. 5, stated that beginning in January 2026, unlicensed mental health providers would be paid 24% less than licensed clinicians.
Weigel said the goal was to push trainees to complete their licensing requirements and to bring the insurer’s payment structure in line with Vermont Medicaid. He noted that some clinicians had remained in trainee status for many years, even more than a decade.
Lord was immediately worried. Four of Eden Valley’s six clinicians are pre-licensed, and nearly 75% of the clinic’s revenue comes from patients insured by Blue Cross Blue Shield of Vermont.
“This is how we stay open. This is how we pay our bills,” she said. She also questioned the insurer’s explanation about aligning with Medicaid, because Medicaid pays Eden Valley’s practitioners the same rate regardless of their licensure status. “The suggestion that we’ve been overpaid is very unsettling,” she said.
Providers Push Back
The insurer’s email triggered fast and vocal backlash. Mental health providers around Burlington organized quickly, sharing protest letters with patients, colleagues, and local Facebook groups. Many warned that the reduction would discourage new therapists from entering the field and worsen Vermont’s already severe shortage of mental health providers, especially those who accept insurance.
In response, Blue Cross Blue Shield of Vermont announced this week that it would pause the policy to collect more information.
“We’ve heard concerns from our network providers, and we take them seriously,” Vice President Andrew Garland said in a statement. “We believe our approach is sound, but we want more time to discuss it with clinicians and community leaders.”
A Complicated Alignment With Medicaid
The licensure process matters, said Lynn Currier, executive director of the Vermont and New Hampshire chapters of the National Association of Social Workers. Licensure ensures that a clinician has passed required exams and continues professional education.
Currier agreed that some clinicians never progress beyond trainee status, relying instead on supervision from a licensed provider. “That’s a problem,” she said.
However, aligning payments with Medicaid is not as simple as it sounds.
In Vermont, many mental health professionals can legally practice without a license if they are listed on a state roster. Some are working toward licensure, while others plan to remain unlicensed permanently. The two groups can be hard to distinguish.
Medicaid does reimburse some supervised clinicians at 76% of its fee schedule, which appears similar to the insurer’s proposal — but Medicaid’s distinction is based on education level, not licensure.
For example, a psychiatric physician receives 100% of the rate, a PhD psychologist receives 93%, and a master’s-level clinician receives 76%, whether licensed or not. This system has been in place since 2016.
Efforts to Fix a Confusing System
State agencies acknowledge that it can be difficult to track who is working toward a license and who is not. Medicaid plans to require all unlicensed providers to enroll individually starting in 2026 so the state can identify them clearly on claims.
Past efforts to set limits on how long someone can bill as a trainee proved unworkable, and the state is now exploring new ideas. One proposal would create two different credentials for unlicensed clinicians — one for those pursuing licensure and another for those who intend to stay unlicensed long-term.
“It’s important for the public to know whether they are seeing a licensed therapist or someone who is still training,” said Lauren Hibbert, deputy secretary of state. “It makes sense that reimbursement should reflect that difference.”
Weigel also raised concerns about supervision. There is currently no limit on how many trainees a licensed provider can oversee, and some supervisors reportedly keep part of their supervisees’ reimbursement. The insurer worries this could turn supervision into a “profit center.”
Garland said it is unclear how long the delay will last, but the insurer wants to “get this right,” noting that many Vermonters struggle with rising health care costs.
Clinicians Warn of New Barriers
Some providers fear that paying trainees less will discourage licensed clinicians from supervising them. Supervision requires hours of reviewing notes, treatment plans, and other documentation.
“It’s a major responsibility,” said Danielle Bergeron Ingram, a licensed psychologist and practice owner in Middlebury. She supervises one trainee and sits on the board of the Vermont Psychological Association. “Lower pay for trainees may push people away from entering the field,” she added. “If they can’t earn a fair wage, why would they pursue such an expensive career path?”
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