Another Elevance Health (NYSE: ELV) entity has been sued over allegations that it is operating a harmful “ghost network” of behavioral health providers in the state of New York.

The law firms Pollock Cohen LLP and Walden Macht Haran & Williams LLP have filed suit against Carelon Behavioral Health in the U.S. District Court for the Southern District Of New York on behalf of three members of the New York State Health Insurance Program (NYSHIP), the plan for employees of the state.

Carelon and Elevance Health representatives have not yet returned a request for comment. This story may be updated. In previous communications, Elevance representatives have told Behavioral Health Business that the organization does not comment on pending litigation.

The suit alleges, among other things, that Carelon Behavioral Health fraudulently and negligently represented an adequate behavioral health provider network for plan members. In allegedly failing to do so, Carelon violated state and federal law requiring health plans to make timely corrections to their provider network directories. These actions, according to the suit, harmed the plaintiffs named in the suit and others who could be included in a class that the suit seeks to certify. 

“The defendant’s publication of an inaccurate provider directory is not just an inconvenience for people searching for mental health providers; it is far more insidious and costly,” the suit reads. “By publishing an inaccurate provider directory, … the Defendant did not just mislead people, but damaged them.”

This is the second time that Pollock Cohen and Walden Macht Haran & William have sued Elevance Health-related entities. In October 2024, the firms sued Anthem Blue Cross Blue Shield of New York and other organizations over an alleged ghost network of behavioral health providers within its health plan for federal employees in New York.

Ghost networks have been well-defined and widely panned by behavioral health providers, researchers and regulators. Yet they remain a persistent problem in health care, especially so for behavioral health.

Regarding the suit against Carelon, the plaintiffs allege that they could not find care that was in-network despite relying on the provider directory the health plan provided. For one plaintiff, they identified and got care from a provider listed as in-network with Carelon, only to have $1,017 charged to the plan, of which only $537 was covered by out-of-network benefits. The suit states that this provider dropped Carelon a month before the visit.

The lawsuit cites several instances of previous investigations of ghost networks in behavioral health, including work by the U.S. Senate Finance Committee. Other attempts at federal legislation have taken aim at the practice, including a provision of the No Surprises Act. However, some research demonstrates that such efforts have largely had no impact on the matter.

It also details a “secret shopper” study conducted by the firms on behalf of the three plaintiffs. They reviewed the first 100 provider entries within a 25-mile radius of each plaintiff, called three times, left messages when answering machines were relevant, and noted whether or not they could secure an appointment for the plaintiff. Here are the results for each:

An unnamed minor plaintiff

— 82 providers were reachable; 18 were unreachable

— 23 providers required additional hoops, such as online registration

— 17 providers were wrongly listed by provider type

— 14 providers were not at the location in the directory

— 2 accepted the insurance but had more-than month-long waitlist

— 1 accepted the insurance but was not taking new clients

— 1 phone number did not have a provider by the name in the directory

— 6 listed providers were able to provide an appointment, marking a “94 percent ghost rate for all calls”

A resident of Nassau County

— 74 providers were reachable; 26 were not

— 25 providers did not accept the plan

— 22 providers accepted the insurance but were not taking new clients

— 5 providers were not at the location in the directory

— 4 accepted the insurance but had more-than month-long waitlist

— 2 providers only offered in-patient services

— 1 provider was wrongly listed by provider type

— 27 appointments could be made, “a 73 percent ghost rate for all calls”

A resident of Rockland County

— 83 providers were reachable; 17 were unreachable

— 67 providers did not accept the plan

— 4 providers were not at the location in the directory

— 3 providers only offered in-patient services

— 3 providers were wrongly listed by provider type

— 1 accepted the insurance but had more-than month-long waitlist

— 14 appointment could be made, “an 86 percent ghost rate for all calls”

Carelon Behavioral Health administers the “Empire Plan Mental Health and Substance Use Program of the NYSHIP plan.

Elevance inherited the contract as part of its acquisition of managed behavioral health care organization Beacon Care Options in 2020.

Beacon previously operated its partnership with NYSHIP through a $2.5 billion contract from February 2016 to December 2023. It secured a successor contract worth $2.8 billion beginning inJanuary 2024 and ending in 2028. Elevance rebranded and consolidated behavioral health operations under the Carelon brand in March 2023.