By Chris Myers, CEO of No Surprise Bill
Elevance Health is under fire again, this time facing a second lawsuit accusing it of misleading policyholders by maintaining inaccurate provider directories—so-called "ghost networks." The plaintiffs in this case, three individuals covered under New York state employee health benefits, claim that Elevance’s subsidiary, Carelon Behavioral Health, misrepresented providers as being in-network, causing significant financial harm and disruption to their access to care.
At the heart of this lawsuit is Carelon’s failure to provide accurate mental health care options. The plaintiffs allege that Carelon’s provider directory included a significant number of providers that were either out-of-network, no longer practicing, or had incorrect contact information. This discrepancy left patients scrambling to find legitimate care providers and potentially facing hefty out-of-pocket expenses for services they believed would be covered under their insurance.
This case marks the second legal challenge of its kind for Elevance Health, with the first lawsuit focusing on federal employees who also reported similar issues with Carelon’s provider network. Both lawsuits highlight a troubling pattern in the health insurance industry—namely, that many insurers may be creating the illusion of a wide-reaching network to comply with federal and state regulations, while in practice, the networks are far from adequate.
What’s at stake here is more than just a financial payout. Plaintiffs argue that Carelon's misleading directories directly contribute to patients being forced to pay out-of-pocket for out-of-network services. And for those who cannot afford these higher costs, many simply abandon their efforts to seek necessary mental health treatment altogether. This not only harms individuals but also shifts the financial burden away from the insurer and onto the consumer.
Legal experts warn that lawsuits of this nature could become more frequent. The issue of "ghost networks" is not unique to Elevance Health. In fact, the plaintiffs' attorneys have already conducted "secret shopper" surveys and uncovered troubling findings about the accuracy of directories for providers in New York’s Empire Plan, managed by Carelon. Of 300 providers listed in the directory, only 51 were found to actually accept the insurance and be available to new patients. The rest either didn’t exist, were out of network, or had incorrect contact information.
This legal action is particularly significant as it shines a light on potential violations of key federal and state laws, including the No Surprises Act and the Mental Health Parity and Addiction Equity Act. These laws are designed to ensure that insurance companies provide adequate, accessible care, especially for high-needs members who rely on mental health services.
As we move further into 2025, this lawsuit may be the beginning of a broader trend. Health insurers, including major players like UnitedHealth Group, Aetna, Cigna, and Centene, are all being scrutinized for similar issues. In fact, Pollock Cohen, the firm representing the plaintiffs in this case, is investigating whether these companies are using similar deceptive practices to inflate their provider networks and evade regulatory scrutiny.
For now, the plaintiffs in this case are seeking class-action status, and we’ll be watching closely as the case progresses. If they succeed, it could set a significant precedent for holding insurers accountable for faulty networks and ensuring that patients receive the care they’re promised under their insurance plans.
At the core of these lawsuits is a simple but crucial question: Should health insurers be allowed to misrepresent their networks and jeopardize the access that patients depend on? As legal challenges mount, it’s clear that patients and regulators alike are looking for answers.
