Ghost Networks Cost Millions: Lawsuit Fights Back

Patients encounter frustration when insurance provider directories are inaccurate, creating 'ghost networks.' These misleading listings impede access to in-network care, sometimes forcing patients to pay out-of-pocket or delay treatment.

A recent class action lawsuit against EmblemHealth, filed in December, alleges violations of New York state law. The suit claims the company misrepresented its healthcare plan by providing inaccurate provider information, effectively operating a ghost network.

Plaintiffs, including New York state government employees, cite significant difficulties in accessing mental health care. Attorney Sara Haviva Mark asserts that these inaccurate directories attract members by falsely inflating provider numbers, enabling plans to profit without adequate provider participation.

The lawsuit also alleges false advertising by EmblemHealth, as claimed by the American Psychiatric Association, a co-plaintiff. This legal action follows at least seven similar lawsuits filed recently challenging inaccurate provider listings nationwide.

In a significant development, EmblemHealth agreed to pay $2.5 million in penalties and fees to New York state. The company will also compensate members who paid out-of-pocket for mental health services and improve its provider listings' accuracy, settling to avoid lengthy litigation.