New York City-based health insurer, EmblemHealth, is being sued by the American Psychiatric Association (APA) and the New York State Psychiatric Association for maintaining a “ghost network” of mental health providers.
Court documents allege that EmblemHealth engaged in false advertising, misrepresenting its network size and quality and as a result, harming plan members and mental health providers.
Plaintiffs are seeking injunctive relief and damages, but a specific amount of money is not disclosed.
The lawsuit describes ghost networks as directors of mental health providers published by insurers that “list the mental health providers that are purportedly ‘in-network’ for a
given plan, but in reality, are not,” and state that these directories are “replete with errors and duplications, making them inaccurate, deceptive, and misleading.”
“EmblemHealth’s misconduct is driven by an age-old motive: to increase its revenue,” the complaint states. “By falsely affiliating and falsely advertising the Association Plaintiffs’ members, EmblemHealth artificially inflates the size and quality of its mental health provider network, which allows EmblemHealth to attract more members, and therefore more premiums and/or administrative fees. EmblemHealth is also able to charge inflated premiums and/or fees, on the basis of its illusorily broad network of providers.”
Across EmblemHealth’s ghost network of providers, allegedly around half are telehealth-only providers. The other half are a combination of hospital-based providers who only see individuals who are hospitalized, providers with incorrect or missing contact information or affiliated with larger entities that members cannot contact directly.
“The impact of ghost networks is widespread and harmful,” Dr. Marketa Wills, APA CEO and medical director, said in a statement. “Not only does this practice hurt patients and families who are seeking care, but it also harms clinicians dedicated to helping these individuals. They get phone calls asking for help and then have to explain that they are not, in fact, part of the Emblem network.”
Court documents also cite a 2023 investigation by the New York Attorney General’s Office, which found that about 82% of its directory listings were “ghost” listings that led nowhere, with just an 18% success rate for calls that led to a way for members to make a mental health appointment.
The health plan has a complex history of prior lawsuits and legal actions related to its practices. In 2014, EmblemHealth was fined $1.2 million plus an additional $31 million in reimbursements to its members for wrongly denying addiction and mental health benefits and violations of state mental health parity laws.
Four years later, in 2018, EmblemHealth reached a settlement with former New York Attorney General Eric Schneiderman and agreed to pay a $575,000 fine related to violation of New York state privacy laws following a mailing mishap that exposed the social security numbers of its members on the exterior of envelopes.
In 2022, the health plan was sued by the City of New York over allegedly charging retired Medicare plan members illegal copays.
One year later, in 2023, EmblemHealth reached a settlement in a separate case brought by the U.S. Department of Labor over allegedly engaging in unlawful payment and claims practices at the expense of its members.
Behavioral Health Business reached out to EmblemHealth for comment on this matter. A reply has yet to be returned.