Recent York City government workers are at the center of a class action lawsuit alleging that EmblemHealth, a major health insurer, maintains a “ghost network” of mental health providers, hindering access to care and violating state law. The suit, filed in December, claims the insurer’s provider directories list clinicians who are not accepting new patients, are out of network, or have inaccurate contact information.
The plaintiffs, six New York City government employees, allege that EmblemHealth’s misleading directories significantly impeded their ability to find in-network mental health care. Val Calderon, a special education teacher and one of the plaintiffs, described a desperate search for a provider after experiencing a miscarriage and suicidal thoughts in early 2024. “You sort of feel like, ‘I’m in this dark tunnel and I don’t realize if I can pull myself out of it, and I’m scared,’” Calderon said, recounting hours spent calling and emailing listed providers, only to find they were unavailable or out of network. “I felt enraged. This health care coverage is supposed to provide me with mental health support, and there isn’t any mental health support — so I don’t have health care coverage. That’s how I look at it.”
The lawsuit argues that EmblemHealth’s practice artificially inflates the number of in-network providers to attract members and secure more favorable rates, rather than ensuring actual access to care. Attorney Sara Haviva Mark, representing the plaintiffs, stated that the directory’s inflated numbers support EmblemHealth attract members without having to pay providers market rates. “The more providers that are listed, the more people that will choose a plan, the more premiums, the more money they make,” she said.
The American Psychiatric Association is also a plaintiff in the suit, alleging that EmblemHealth misrepresents the coverage offered by psychiatrists, constituting false advertising. The lawsuit is one of at least seven filed in the last two years challenging the accuracy of provider listings from various insurance companies, according to lawyers involved in the cases.
The core of the legal challenge rests on a potential workaround to the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that has historically shielded employer-sponsored health plans from state consumer protection lawsuits. Because the suit involves health plans offered to government employees, We see not subject to ERISA, allowing the plaintiffs to pursue claims under New York state law.
The issue of “ghost networks” has been a longstanding problem in the health insurance industry. A 2023 review of physician directories from five large health insurers found inconsistencies in 81% of entries, including incorrect addresses or specialties. The same year, a New York attorney general’s office investigation found that 86% of in-network mental health providers listed in one state health plan were unavailable, with the share for EmblemHealth specifically at 82%.
EmblemHealth recently agreed to pay $2.5 million in penalties and fees to the state of New York and to compensate members who paid out-of-pocket for mental health care, and to improve the accuracy of its provider listings, following an investigation by the New York attorney general’s office. The company stated it agreed to the settlement to avoid prolonged litigation.
EmblemHealth, which recently transitioned to a new plan in partnership with UnitedHealthcare, has stated it is committed to improving access to behavioral health care. An EmblemHealth spokesperson said the company has established a concierge line to help members make appointments, expanded its network, and is now directly providing behavioral care services instead of using a vendor. “EmblemHealth is committed to ensuring that our members have the support they need to access behavioral health care in a timely and equitable manner,” the spokesperson said.
Despite these efforts, Calderon initially resorted to paying $160 per week out-of-pocket for therapy sessions after struggling to find in-network care. She later sought treatment for postpartum depression following the birth of her daughter and again faced challenges navigating the network. “As exhausted as I am after a long day of work, after having a 1-year-old, I can’t get on the train fast enough to go to my therapy sessions, because I know that by the end of it, I feel so much better,” she said.
Steve Cohen, a lawyer at Pollock Cohen, who has filed five similar class action lawsuits, believes litigation is the only path to meaningful change. “The only way we’re going to observe change — and I believe we’re going to see change — is through litigation,” he said. Mark stated she intends to move the case forward expeditiously, viewing the situation as an “urgent health crisis.”
