Lawsuit against Elevance Health alleging use of ‘ghost networks’ officially moving forward
Elevance Health, the publicly traded health insurance giant formerly known as Anthem, is facing a lawsuit alleging it used a “ghost network” to mislead patients about the availability of care in their area.
In this case, Carelon Behavioral Health, a subsidiary of Elevance, is accused of publishing an inaccurate directory of providers for those seeking mental health services. Specifically, it allegedly inflated the available number of eligible providers to make it seem like those with specific insurance had more options than existed in reality.
This was allegedly done to entice employers and health plans into adding its organization to their coverage networks.
A lawsuit was filed shortly after attorneys representing plaintiffs conducted a “secret shopper” survey, calling 300 Carelon providers who were reportedly accepting new patients and covered the plaintiffs’ insurance—in this case, the Empire Plan in the New York State Health Insurance Program (NYSHIP).
According to the lawsuit, only 17% of the 300 doctors lawyers called accepted the coverage and were ready to take on new patients, implying that the provider directory was inaccurate.
“By falsely inflating its network of available providers, Carelon is violating its statutory, contractual, and common law duties, not to mention its moral obligations," Jacob Gardener, a partner at Walden Macht Haran & Williams, said in a statement.
Three Carelon patients are leading the lawsuit on behalf of the 1 million people the organization serves in New York State.
If found to have knowingly deployed a ghost network directory to deceive the public and members of the NYSHIP, the lawsuit contends that Carelon would be in violation of federal law—mainly the No Surprises Act, the Mental Health Parity and Addiction Equity Act.
Attorneys for the plaintiffs argue that Carelon and its parent company Elevance would also be in violation of state law, in addition to running afoul of the contractual promises the groups made to health plans.
Case to move forward
The lawsuit was filed in April 2025, but this week a judge ruled the case can move forward. An attempt by Elevance to have the complaint dismissed was rejected by the Southern District of New York.
Judge Edgardo Ramos made the ruling on Tuesday, allowing the plaintiffs’ grievances to proceed. It’s unclear if the case will advance to trial or if Elevance will settle out of court.
For now, all claims regarding false advertising and deception are allegations only. Nothing has been proven in court, and since this is a civil lawsuit, Elevance and Carelon are not criminally liable for any outcome.
HealthExec reached out to Carelon for comment.
This is a developing story.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.