New York has secured settlements totaling over $10 million from Carelon, a subsidiary of Elevance Health, regarding issues with mental health networks and coverage denials. The agreements comprise a $2.35 million payment for penalties, fees, and costs, as well as up to $8 million in restitution for individuals who incurred out-of-pocket expenses for out-of-network mental healthcare. New York Attorney General Letitia James conducted two investigations that led to these settlements, finding that Carelon had misled members by referring them to out-of-network providers through “ghost networks” and improperly denying coverage for substance abuse disorder treatment.
According to James, Carelon oversees behavioral health benefits for several plans, including Anthem Blue Cross, EmblemHealth, Independent Health, and the Empire Plan, which collectively cover over 4 million people in the state. However, the company’s alleged actions contravene a 2015 agreement with the Attorney General’s office, in which Carelon agreed to maintain accurate provider networks and utilize approved criteria when denying substance abuse treatments. James noted that Carelon’s administration of behavioral health benefits affects multiple insurers, highlighting the need for accurate provider information.
James stated, “When someone is ready to seek help for a mental health condition or addiction, every day matters. Carelon left New Yorkers calling provider after provider who could not see them and made it harder for people to get the treatment to which they were entitled. These settlements will help people get the care they need and put money back in New Yorkers’ pockets.” Her comments emphasize the importance of timely access to mental health care.
In a statement, Elevance Health expressed its commitment to ensuring patients have access to current provider information. The company said, “Carelon Behavioral Health is committed to helping people find and access high-quality mental health and substance use disorder care. Accurate, up-to-date provider information is an important part of that effort.” Additionally, the company stated, “We continue to invest in tools and processes that support accurate provider information and work closely with providers and other partners to help connect consumers with the care they need.”
A lawsuit filed in April alleged that Carelon’s “ghost networks” affected the Empire Plan, prompting an analysis of the company’s network. The analysis, which involved secret shopper calls to 300 providers, found that only 17% of those contacted accepted insurance and were open to new patients. This issue has also raised concerns in other markets, such as maternal care services in Medicaid and Medicare Advantage, with a recent study revealing that commercial plans often have inaccurate provider directories.
