NYC Lawsuit Exposes ‘Ghost networks’ Blocking Mental Healthcare Access
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A class-action lawsuit filed against EmblemHealth, new York City’s most popular employee health plan, alleges widespread inaccuracies in its provider directory have left patients unable to access desperately needed mental healthcare.The suit,brought by city employees and the american Psychiatric Association,shines a light on the pervasive problem of “ghost networks”-insurance directories listing providers who are not actually accepting new patients,are no longer in-network,or are otherwise unreachable.
The case underscores a growing national crisis in mental healthcare access, where inaccurate provider listings routinely force individuals to delay treatment, seek costlier out-of-network care, or forgo help altogether.
A Desperate Search for Help
In late 2024, Nimrod Shimrony, an emergency medical technician with the New York City Fire Department, found himself in a life-or-death struggle and attempted suicide. Following intensive outpatient treatment, Shimrony and his wife embarked on a frustrating search for a continuing therapist, onyl to hit a wall of unavailable providers listed in their insurance directory.
Similarly, Valeria Calderón, a special education teacher, sought mental health support after suffering a miscarriage that same year. she contacted over a dozen therapists listed as in-network, only to discover none were accepting new patients. “I was hanging on by a thread,” Calderón stated,ultimately forced to pay higher out-of-pocket costs for an out-of-network provider. “There’s only so much you can vent to your family about
Historically, health insurers have faced limited consequences for inaccurate directories. Patients often have limited legal recourse due to restrictions on damages under federal law. however, plans offered by local governments or purchased through Affordable Care act marketplaces are not subject to the same restrictions, possibly allowing for more significant damages in lawsuits.
“We hope this case can use state consumer protection laws to better advocate for plan members,” said Sara Haviva Mark, an attorney representing the city employees.
Previous Scrutiny and Settlements
This isn’t the first time EmblemHealth’s practices have come under fire. In 2010,the New York State Attorney General’s office found that group Health Inc., an insurer that merged into emblemhealth, “failed to maintain an accurate” directory. A 2014 settlement with EmblemHealth addressed concerns about the improper denial of coverage for mental health and substance use disorders.
More recently, a 2023 report from the Attorney General’s office found that EmblemHealth and a dozen other insurers had extensive errors in their mental health provider listings. The report revealed that 82% of providers listed in EmblemHealth’s directory were unavailable for appointments when contacted.
Despite these findings and a new regulation announced last year by New york Governor Kathy Hochul aimed at eliminating ghost networks, the state’s insurance regulator has yet to issue any fines against EmblemHealth or other insurers for inaccurate directories. When contacted by ProPublica, the regulator did not respond to questions regarding enforcement actions.
Similar lawsuits have been filed against insurers like Kaiser Permanente and Molina in at least two other states. Last spring, the mother of an arizona man who died after being unable to find mental health treatment sued his plan, overseen by Centene, alleging false facts misled customers. Centene settled a similar lawsuit in San Diego last fall for $40 million.
Industry Response and Ongoing Concerns
AHIP, the insurance industry’s trade group, maintains that its members are taking steps to improve directory accuracy, suggesting that providers shoudl update their listings more frequently. though, mental health experts dispute this claim, arguing that insurers frequently enough fail to remove outdated listings even after providers formally leave a network.
EmblemHealth, wich covers over 3 million people in New York and neighboring states, declined to comment on the pending litigation. The company’s popular plan for New York City employees is set to be replaced by a plan jointly offered by EmblemHealth and UnitedHealthcare in early 2026.
The lawsuit serves as a stark reminder of the critical need for accurate and accessible mental healthcare resources, and the potential consequences when those resources are unavailable.
