Ghost Network Lawsuits: Harmed by an Incorrect Provider Directory?

Attorneys working with ClassAction.org are investigating potential class action lawsuits against health insurance companies that fail to maintain their provider or “find a doctor” directories. These listings are often referred to as “ghost networks,” as they are inflated with “phantom” practitioners who are not actually in network or are otherwise unavailable to see and treat plan participants.  

Some studies have shown that more than half of all directory entries contain errors – a problem that can create unlawful barriers to patient care, as well as additional expense for those already paying inflated premiums.

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What Is a Ghost Network, Exactly?

The term ghost network refers to a health insurance directory that lists multiple doctors (or other medical professionals) who, for various reasons, cannot provide care to insured patients. 

Patients have been complaining about “ghost” or “phantom” networks for more than two decades, The Washington Post writes, adding that the problem has only “gotten worse in recent years,” especially when it comes to finding timely mental health care. (Complaints of difficulties finding specialized, covered and available providers for substance abuse treatment, pregnancy-related care and autism treatment are also common.)  

In May 2023, the Senate Committee on Finance released the findings from its “secret shopper” survey examining the breadth of mental health provider ghost networks in the Medicare Advantage program. In the study, staff members reviewed directories from 12 different plans in a total of six states and called ten providers from each plan. Approximately 33 percent of the 120 mental health providers contacted via phone had non-working or inaccurate numbers, or never called back. Further, committee staff members reported only being able to make appointments 18 percent of the time. 

In summary, “[m]ore than 80% of the listed, in-network, mental health providers staff attempted to contact were therefore ‘ghosts,’ as they were either unreachable, not accepting new patients, or not in-network,” the Senate Finance Committee report titled “Majority Study Findings: Medicare Advantage Plan Directories Haunted by Ghost Networks” reads. 

In another example, a lawsuit filed by the City of San Diego claims that Kaiser Foundation Health Plan, which has more than 9 million plan participants across the state, is one of the “worst actors in California” when it comes to inaccurate provider networks. According to the lawsuit, Kaiser has “mental health care directory inaccuracy rates of over 30 percent…and an overall directory inaccuracy rate of 19.14 percent.”

Chief executive of Mental Health America of California Heidi Strunk told The Washington Post back in 2022 that accuracy of network listings is particularly important for some suffering from depression or other mental health disorders as “one call is all they have…[s]o if someone isn’t answering, we lose the opportunity to help them…[i]t’s no exaggeration to say lives have been lost because of this.”

How Ghost Networks Harm Consumers

The consequences of inaccurate directory listings are considerable, as patients may suffer harm to both their physical and financial health.

For instance, assume a patient searches an insurance company’s directory for a general practitioner and finds one close by that’s listed as being in network. Unbeknownst to the patient, the supposedly “in-network” doctor’s contract with the insurance company lapsed and the directory was never updated. After the appointment, the patient is hit with a costly bill for out-of-network care they rightfully believed would be covered. 

In another example, a patient is looking for a mental health practitioner who specializes in eating disorders and finds three doctors in the directory who practice within 25 miles. After contacting the listed providers, the patient finds out that the first doctor is no longer in network, the second one is not accepting new patients, and the phone number for the third is disconnected. For all intents and purposes, these doctors are non-existent to the patient who is now forced to either go out of pocket, travel great distances for covered care (and possibly take time off work), or forgo treatment altogether. 

Health insurance companies have a financial incentive to make their provider listings appear as large and comprehensive as possible. Indeed, provider network is among the top considerations for consumers shopping for health insurance, with one study finding that patients are willing to pay more to have their doctor in network and broad access to other practitioners in their area.

When a health insurer’s directory is inflated with providers who are out of network, no longer practicing or are otherwise unavailable, customers are being misled as to how extensive their plan is and ultimately overpaying for a network that is much narrower than advertised. Compounding matters is the fact that participants in Affordable Care Act or employer plans who discover their network is smaller than anticipated will need to wait until the following year’s open enrollment period to switch plans, assuming they don’t experience a “qualifying event,” such as marriage or job loss.

Insurance companies, on the other hand, reap a number of financial benefits from inaccurate provider directories. Not only can they bring in more customers and at a higher cost with a ghost network, they also save money when frustrated patients give up on finding care or choose to go out of pocket.

Are Ghost Networks Illegal?

Although state and federal law requires insurance companies to publish complete, accurate and up-to-date directories, attorneys suspect that very few actually do.

The Affordable Care Act, for instance, states that health plan issuers must publish “up-to-date, accurate, and complete” provider directories. California law also requires updated, accurate and complete provider listings and explicitly prohibits health insurers from including doctors who are not currently under contract with the plan.

How Could a Lawsuit Over Ghost Networks Help Me?

Successful lawsuits could also force health insurance providers to ensure their network listings are accurate and regularly maintained. 

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