'American Psychiatric Association Sues Health Plan Over 'Ghost Networks''

 The American Psychiatric Association (APA) is suing a New York State health plan over its alleged use of "ghost networks" that list mental health providers that are not in their network or aren't taking new patients.

The class action lawsuit, filed on Dec. 30 in federal court against EmblemHealth, alleges that the ghost network directory "constitutes unlawful deceptive acts and practices, false advertising, and violations of statutory and regulatory requirements," according to an APA press release. "It also alleges that their provider directory violates federal trademark law by falsely advertising and misusing the names, identities and reputations of mental health clinicians."

The networks "[harm] clinicians' reputations by listing them in provider directories when they do not accept the plan's insurance or do not practice at the locations where they are listed," the press release noted. "In some cases, clinicians are unaware of their listing in the directories and have not consented to inclusion."

During an online interview at which a press person was present, Robert Trestman, MD, PhD, chair of the APA's Council on Healthcare Systems and Financing, noted that "when people look for care and are denied it, when one of us tells a prospective patient that we're not a member of the health plan and never signed up for it, they don't get angry with the insurer -- they get upset with the psychiatrist, they feel it was the psychiatrist's fault."

"It's a normal human reaction but it damages the reputation of psychiatrists," he added.

The lawsuit seeks punitive damages and a jury trial.

"The reality is that in a commodity-driven environment, the way large corporations like Emblem [will respond] is [if there are] financial penalties," said Trestman, a psychiatrist at the Virginia Tech Carilion School of Medicine in Roanoke. "If they recognize that continuing this kind of behavior will lead to more financial damage ... then the problem will be fixed."

Although keeping a directory constantly up to date may be challenging, "this is within their skillset," he noted. "This is by no means as complicated as creating an electronic health record, or the actuarial estimation of the risk of insuring patients with severe illness ... It's the business of insurers to manage their finances and manage the operations of their business."

Fixing this problem is more critical now than ever, Trestman said. "The demand for psychiatric care increases year after year. The availability of resources continues to be limited, and we need to develop effective triaging strategies to know who's available to provide care ... and at what level of sophistication. This is one element in the very complex fabric of healthcare delivery that we need to focus everyone's attention on."

The ghost networks problem -- which affects many specialties in addition to psychiatry -- has already caught the attention of federal lawmakers and regulators. Sen. Ron Wyden (D-Ore.), then the chair of the Senate Finance Committee, released a report in 2023 from a "secret shopper" study his staff conducted.

Staff members reviewed directories from 12 different Medicare Advantage plans in a total of six states, calling 10 systematically selected providers from each plan, for a total of 120 calls. As the Finance Committee noted in a press release, of the total 120 provider listings contacted by phone, 33% were inaccurate, non-working numbers, or unreturned calls. Staff could only make appointments 18% of the time.

At a committee hearing held in conjunction with the report release, Wyden said the solution to the ghost networks problem is "a three-legged approach. We've got to have more oversight, greater transparency, and serious consequences for insurance companies that are fleecing American consumers."

The problem is apparently still continuing in Medicare -- and Medicaid -- with behavioral health providers, according to an October 2025 report from the HHS Office of Inspector General (OIG), which examined provider directories in four Medicare Advantage plans and two Medicaid managed care plans in each of 10 counties -- for a total of 60 plans. (The behavioral health providers listed included social workers and psychologists in addition to psychiatrists.) The OIG found that 30 of the 40 Medicare Advantage plans they looked at had "limited" networks that included less than 25% of the county's behavioral health care workforce.

In addition, on average, 55% of the providers listed in the Medicare Advantage networks were considered "inactive" -- they had not provided a single service to a Medicare Advantage enrollee in 2023, the year the study was conducted.

"We found that 72% of the inactive providers should not have been listed as network providers in the plan directories," the report authors wrote. "Most often, these providers should not have been listed because they no longer worked at any of the locations listed by the plan. In other cases, providers should not have been listed in the network because the providers indicated they would not have seen patients enrolled in the plan or never signed up to be a network provider with the plan."

The report also found that "some providers indicated that they worked with specific patient populations and could not see most enrollees. For example, some providers in Medicare Advantage plan networks explained that they worked in a children's clinic or served a younger patient population and could not see older patients enrolled in a Medicare Advantage plan."

Having such a high proportion of providers who should not have been listed as network providers "may be an indication of 'ghost networks,' which can pose a significant barrier to enrollees seeking behavioral health care," the authors said.

Congress is continuing to work on the issue; a provision in a 2026 appropriations bill passed this week by the House requires Medicare Advantage plans to maintain accurate provider directories on a public website beginning in plan year 2028, and also requires plans to report on the accuracy of their directories.

https://www.medpagetoday.com/psychiatry/generalpsychiatry/119565