Patients Stalled by Insurance “Ghost Networks”: New Lawsuits and a $2.5M Settlement Against EmblemHealth

Insurer directories that list clinicians who are unavailable, out of network, or have incorrect contact details—so-called “ghost networks”—are leaving patients unable to access promised in‑network care, particularly for mental health services.

What Are Ghost Networks?

A "ghost network" describes inaccurate or misleading provider listings maintained by health plans. Listings may show clinicians who are not accepting new patients, practice only in hospital settings, are out of network, or have incorrect phone numbers and addresses. These errors can force patients to delay care, pay out of pocket, or go without treatment.

The Lawsuit And Why It Matters

In December, a group of New York state government employees filed a class action against EmblemHealth alleging the insurer overstated its in‑network mental health options and violated state law. Because most private employer plans are governed by the federal Employee Retirement Income Security Act (ERISA) — which limits state‑law suits — this case takes advantage of a key exception: health plans for government employees are not subject to ERISA and so can be sued under state consumer‑protection laws.

Who’s Involved

The plaintiffs include six New York City government workers and the American Psychiatric Association (APA), which contends the insurer misrepresents psychiatrists’ availability. Attorney Sara Haviva Mark says inflated listings help attract members without paying market rates to keep clinicians in network: “The more providers that are listed, the more people that will choose a plan, the more premiums, the more money they make.”

Real Harm To Patients

Plaintiff Val Calderon, a New York City special‑education teacher, attempted to find in‑network mental‑health care after a miscarriage and later during postpartum depression. After hours of searches and a dozen calls and emails, she found no available in‑network clinicians and ultimately paid $160 per weekly session out of pocket for therapy. Her experience illustrates how directory inaccuracies can lead to emotional and financial harm.

Investigations, Findings, And Settlement

Independent reviews and state investigations have found high rates of directory errors. A 2023 review of five large insurers reported inconsistencies in 81% of directory entries. New York’s attorney general called nearly 400 listed mental‑health providers in one state plan and found 86% were ghost entries; EmblemHealth’s listings were 82% ghost entries in that review.

Last week New York’s attorney general announced EmblemHealth agreed to pay $2.5 million in penalties and fees, reimburse members who paid out of pocket for mental‑health services, and take steps to improve directory accuracy. EmblemHealth said it accepted the settlement to avoid protracted litigation and has taken measures such as launching a concierge appointment line, expanding its provider network, and delivering behavioral health services directly rather than through a vendor.

Responsibility And Accountability

Industry group AHIP says plans work to keep directories up to date and that providers must inform insurers of changes to contact information. Providers counter that insurers must ensure directories are accurate and that it can be difficult to have a clinician’s name removed when needed. The mismatch of responsibilities contributes to persistent errors.

What Comes Next

At least seven lawsuits over ghost networks have been filed in the last two years, and several class actions are progressing through the courts. Plaintiffs’ lawyers say litigation may be the most effective route to compel systemwide changes and faster enforcement of directory rules.

Practical Steps For Patients

If you encounter potential ghost listings: call the insurer and the provider, ask for written confirmation of network status and appointment availability, keep records of calls and emails, and consider filing a complaint with your state insurance regulator or employer benefits office. Documenting difficulties can help with reimbursement claims and support regulatory complaints or litigation.

Bottom line: Ghost networks are a widespread problem that can have serious clinical and financial consequences. Recent litigation and regulatory action against EmblemHealth underscore growing scrutiny and the potential for change—but many patients continue to face barriers to timely mental‑health care.