Updated: April 29 at 4:39 p.m. ET
Another Elevance Health business, this time Carelon Behavioral Health, is accused of misleading beneficiaries seeking mental health services by pushing ghost networks, or inaccurate provider directories, to its members, a new lawsuit claims.
Three plaintiffs are suing the company on behalf of more than 1 million Carelon patients through the Empire Plan in the New York State Health Insurance Program (NYSHIP). The plaintiffs said Carelon exaggerates its provider network, persuading enrollees to choose its business over NYSHIP competitors.
"It is an abomination that they didn’t get the coverage they were paying for; and more importantly, didn’t receive the mental health care they or their loved one needed," said Steve Cohen, an attorney for the plaintiffs and law firm Pollock Cohen.
Like the Anthem Blue Cross Blue Shield case (see below), the plaintiffs' attorneys conducted secret shopper studies and called 300 Carelon providers. Just 17% of doctors accepted insurance and agreed to see new patients.
“By falsely inflating its network of available providers, Carelon is violating its statutory, contractual, and common law duties, not to mention its moral obligations," said Jacob Gardener, a partner at Walden Macht Haran & Williams. The lawsuit clarifies incomplete provider directories violates the No Surprises Act, Mental Health Parity and Addiction Equity Act, state consumer protection and insurance law, and contractual obligations to enrollees.
Carelon did not immediately respond to a request for comment.
October 23
Anthem Blue Cross Blue Shield of New York’s directory of doctors is thoroughly inaccurate and forces patients to seek costly out-of-network care and delay care, a class-action lawsuit alleges.
This network of New York doctors, which patients expect will accept their insurance plan, in most cases does not. Many patients sought mental health care but struggled to find a doctor within their network while contending with dozens of false options, also known as ghost networks.
The plaintiffs’ attorneys, with law firms Pollock Cohen and Walden Macht Haran & Williams, completed a secret shopper survey to see how extensive the problem is for patients. After calling the first 100 doctors on Anthem’s directory, only seven accepted insurance and could take new patients. Most would not accept the right insurance, were not mental health providers, refused to take new patients or simply could not be contacted, a news release explains.
A downloaded directory of psychiatrists generated 4,300 providers, but many listings were duplicated dozens of times with different addresses and telephone numbers, the lawsuit (PDF) explains.
“We knew ghost networks were a problem, but we had no idea it was this bad,” said Steve Cohen of Pollock Cohen, one of the lead attorneys representing the plaintiffs.
Ghost networks are rife with errors and duplicate listings and are more common in mental health provider directories than in other areas of care, the lawsuit explains. Failing to find a mental health provider after embarking on a “wild goose chase,” as the lawsuit explains, can intensify mental health woes and lead to even more expensive medical bills.
These findings reinforce secret shopper studies from the New York attorney general office and the U.S. Senate. The New York attorney general’s study revealed 86% of mental health providers listed on a health plan’s network were, effectively, ghosts. The Senate Finance Committee’s survey (PDF) contacted providers in six states. On average, 82% of the directory listings were ineffective. In Oregon, all providers contacted were ghost listings.
The lawsuit claims Anthem knowingly keeps its directory stocked with inaccurate listings to offer the illusion of a robust catalogue of mental health providers, as it competes against other health plans. The insurer may also be attempting to meet federal requirements. However, ghost networks are a violation of the No Surprises Act and the Mental Health Parity and Addiction Equity Act as well as New York insurance law.
“In sum, these are deceptive business practices on the part of the defendant,” the plaintiffs wrote.
Nearly 3 million people were dealing with a mental illness in New York in 2022, accounting for 19.5% of the state’s adults, according to the nonprofit Mental Health America.
Anthem Blue Cross Blue Shield of New York declined to comment on the ongoing litigation. Owned by Elevance Health, it is one of the largest insurers in New York.