Ghost Networks in Healthcare
You’ve probably heard of ghost kitchens, those restaurants that exist only on delivery apps with no physical storefront for customers to visit. But have you ever heard of ghost networks?
They’re not spooky Halloween décor or the latest streaming conspiracy. Ghost networks are the phantom pharmacy networks that pharmacy benefit managers and insurance companies claim to exist on paper, but have little basis in reality. If you’ve ever tried to help a patient find an in-network pharmacy only to discover there are basically none available within a reasonable distance, or if you’ve watched a patient’s face fall when they learn their trusted local pharmacy can’t actually fill their prescription under their insurance plan, you’ve already encountered one of these ghosts.
A ghost network emerges when an insurance plan lists what appears to be a large, robust network of healthcare providers including pharmacies, primary care doctors, specialists, and mental health professionals, but many of those providers are either not actually in-network anymore, not accepting new patients, have closed their doors entirely, been acquired by larger entities that changed their contracts, or have been dropped from the plan without notification.
In the specific case of pharmacy, these networks often include pharmacies that technically have contracts but face reimbursement rates so poor or contract terms so restrictive, that they cannot sustainably fill prescriptions for plan members. The result is a network that looks impressive on paper but functions as a ghost town when patients actually need care.
The mechanics of how this happens in pharmacy reveal a carefully constructed system of misdirection. Pharmacy benefit managers love to boast about their broad access networks when pitching services to employers, government programs, and state Medicaid agencies. They’ll confidently tell decision-makers that patients can choose from thousands of participating pharmacies across the country. But when you dig deeper into the reality behind these claims, you’ll find pharmacies that closed years ago listed in directories; independent community pharmacies that are technically listed as “in-network”, but reimbursed so far below their acquisition cost for medications they have to turn patients away and are simply counting the days until they can legally terminate their contract of adhesion; and entire geographic regions that are functional pharmacy deserts where the only available option listed might be 45 minutes away by car or, even worse, restricted to mail order only.
Consider the experience of a TRICARE beneficiary who looks up their coverage and sees their trusted, local community pharmacy listed as an in-network provider. They arrive at the pharmacy expecting routine service, only to discover that while their pharmacy is technically in-network, the reimbursement structure means the pharmacy would lose money on every prescription filled. The insurance might pay the pharmacy less than the actual wholesale cost of the medication, sometimes even less than the cost of the bottle and label used to dispense it.
This isn’t meaningful access to care. It’s administrative fiction masquerading as healthcare coverage.
Real stories from practicing pharmacists reveal just how pervasive this problem has become. A small-town pharmacy owner in the Nebraska panhandle made the difficult decision to opt out of a particular PBM contract three years ago after enduring years of unsustainable reimbursements that threatened the viability of their business. The refusal to join was filed, processed, and seemingly finalized. The pharmacy owner moved on, assuming the matter was settled. But this fall, they made a disturbing discovery: their pharmacy was still listed as an active in-network provider. Even worse, a TRICARE prescription processed through their system without any red flags or alerts. Now they’re spending countless hours on phone calls, emails, and administrative follow-up just to extricate themselves from a network they thought they had left years ago. The PBM never respected their opt-out and had been quietly counting the pharmacy as active in their network to inflate their network adequacy numbers for regulatory and contractual purposes.
Another pharmacy owner in Georgia faced a similar situation after declining an onerous contract for many of the same reasons. Several months after their departure, they discovered that one of their rural pharmacy locations had been magically re-enrolled without their knowledge or consent. When they investigated why this happened, the explanation was as cynical as it was predictable: the plan needed to maintain network adequacy, meaning they needed enough pharmacies listed on paper to meet their contractual requirements with payers and regulatory guidelines. When the owner discovered what had happened, they were exhausted by the prospect of another lengthy battle. As they put it, they just didn’t want to spend any more of their time or energy fighting to remove themselves from a network they never wanted to rejoin.
Neither of these pharmacy owners knew they were supposedly “in-network” until unexpected claims processed through their systems. The ghosts aren’t just metaphorical. They’re actively being counted and used to justify inadequate networks.
The consequences of ghost networks ripple outward in ways that harm everyone except the PBMs themselves. For patients, ghost networks mean delayed care while they hunt for an actual in-network option that can serve them; dramatically increased travel time that may be impossible for elderly or disabled patients; or forced reliance on mail order pharmacies that eliminate the clinical consultation and relationship-based care that community pharmacists provide. When the local pharmacy can’t afford to fill a patient’s prescription under their insurance terms, that refill gets delayed — sometimes abandoned entirely — leading to gaps in medication adherence that can have serious health consequences. With chronic conditions like diabetes, hypertension, or mental health disorders, even brief interruptions in medication access can lead to preventable hospitalizations and disease progression.
For pharmacies, ghost networks represent another layer of deception in an already fractured and dysfunctional system. PBMs get to claim broad access when reporting to regulators, legislators, and employer groups while simultaneously implementing reimbursement policies that choke out the local independent providers actually delivering face-to-face care in underserved communities. It’s the equivalent of a fire department listing every house in town as fully protected by emergency services, but when an actual fire breaks out, the trucks are nowhere to be found because the department never had the resources or intention to respond to those addresses in the first place.
Ghost networks aren’t just a pharmacy problem. They’ve emerged as a national healthcare crisis affecting multiple sectors of the medical system.
Investigations into medical and behavioral health insurance plans have already exposed massive discrepancies between the providers listed in directories and the providers actually available to accept new patients and deliver care. Patients seeking mental health services have been particularly hard hit, often calling dozens of supposedly in-network therapists only to find that either none are accepting new patients, the provider has moved, or those providers were never actually contracted with the plan. Now pharmacies are catching similar regulatory attention. A report compiled in 2024 by a coalition of state insurance commissioners found widespread and systematic inaccuracies in PBM network directories across multiple states. Some regulators went so far as to characterize these practices as “consumer fraud by omission”. After all, patients cannot access care that doesn’t actually exist, and pharmacies cannot remain financially viable while participating in networks that only look adequate on paper.
The incentives driving this behavior become clear when you follow the money and market consolidation. Why would PBMs maintain the charade of robust networks while the reality deteriorates? Because ghost networks allow them to appear as though they’re fulfilling their fundamental obligation of maintaining broad patient access while they continue consolidating control over the entire pharmaceutical supply chain and forcing prescription volume toward their own vertically integrated mail-order and specialty pharmacies. From a PBM executive’s perspective, it’s a brilliant strategy that satisfies contractual obligations for appearance purposes while directing profits to their own operations. For everyone else in the healthcare ecosystem, patients, independent pharmacies, employers paying the premiums, and taxpayers funding government health programs, it’s an infuriating example of systemic manipulation that prioritizes corporate profits over patient care.
The next time a pharmacy benefit manager brags about its broad national network of tens of thousands of participating pharmacies, there’s one simple but revealing question worth asking: How many of those pharmacies are actually willing and financially able to fill prescriptions under your current reimbursement rates and contract terms?
The honest answer to that question would likely make their theoretically broad network disappear faster than a ghost at sunrise. Until policymakers, employers, and government agencies start demanding verification of real-world access rather than accepting spreadsheet promises and directory listings at face value, patients and pharmacies will continue living in a haunted healthcare system where the providers they need have been reduced to shadows.
If you listen closely in communities across the country, you can almost hear the echo of every local pharmacy that used to be part of these networks — phantom whispers with a simple message: We were once here, serving our neighbors, until PBMs forced us away while still claiming we remain.
Brandi Chane, PUTT Board
