Elevance Health dealt second 'ghost network' lawsuit

Elevance Health is facing a second lawsuit accusing it of maintaining inaccurate provider directories, also known as “ghost networks.”

The plaintiffs are three people covered under New York state employee health benefits who allege that Elevance Health division Carelon Behavioral Health misrepresented providers as in-network, causing them financial harm. The attorneys are seeking class-action status.

Related: 'Ghost networks' lawsuit may signal trouble for insurers

Legal experts expect "ghost network" lawsuits to spread. Health insurers have long faced criticism for faulty provider directories. Federal and state officials have investigated, and federal authorities proposed and finalized regulations in recent years to strengthen provider networks.

“Higher-needs members are more likely to have to pay for out-of-network treatment or abandon their efforts to obtain mental healthcare altogether, thereby saving Carelon the costs associated with their care,” the complaint says.

Elevance Health did not respond to a request for comment.

Pollock Cohen and Walden Macht Haran & Williams filed the lawsuit against Elevance Health subsidiary Anthem Blue and Cross Blue Shield of New York in the U.S. District Court for the Southern District of New York.

The Elevance Health plaintiffs allege Carelon Behavioral Health, which administers mental health benefits to state and municipal employees enrolled in the New York State Health Insurance Program's Empire Plan, misled policyholders seeking mental healthcare. The first such lawsuit involves federal employees.

The plaintiffs' attorneys conducted “secret shopper” surveys from November to February and found that 51 out of 300 providers in the Empire Plan directory accepted the insurance and were accepting new patients. But most either didn’t exist, were out of network or had inaccurate phone numbers listed.

Carelon Behavioral Health used the illusion of a robust network of mental health providers to lure members to choose its plan and to create the appearance that the company complied with federal and state network adequacy laws, such as No Surprises Act and the Mental Health Parity and Addiction Equity Act of 2008, as well as its contract with the New York state.

Pollock Cohen previously said it was also looking into whether UnitedHealth Group subsidiary UnitedHealthcare, CVS Health subsidiary Aetna, Cigna and Centene deploy similar practices.