Insurers Face Lawsuits Over 'Ghost Networks'
Patients are suing insurers over inaccurate provider directories, known as “ghost networks,” that list clinicians who are not accepting patients or are no longer in-network. This legal trend is increasing pressure on health plans and providers to ensure data accuracy in billing and credentialing. The lawsuits create a new pain point that RCM and data management vendors can help solve.
- The federal No Surprises Act and the Consolidated Appropriations Act (CAA) mandate that health plans verify their provider directories at least every 90 days. Any updates to a provider's information must be made within two business days. - Penalties for non-compliance can be severe, with potential fines of up to $25,000 per beneficiary for errors in Medicare Advantage directories and up to $100 per beneficiary for other plans. The No Surprises Act also allows for fines of up to $10,000 per violation for inaccurate information. - A recent lawsuit filed against Carelon Behavioral Health, a subsidiary of Elevance Health, on behalf of over 1 million patients, highlights the scale of the issue. This follows a 2024 lawsuit against another Elevance subsidiary, Anthem Blue Cross and Blue Shield, for similar "ghost network" allegations. - In one investigation of an insurer's behavioral health directory, over 80% of the listed providers were found to be unreachable, not accepting new patients, or no longer in-network. This is a particularly critical issue in mental health, where patients may abandon seeking care after encountering such obstacles. - In May 2025, a lawsuit was filed against Centene and Health Net of Arizona following the death of a patient who was unable to find a single accessible in-network therapist after 21 calls to his insurer. The lawsuit alleges that despite previous warnings from state regulators and prior fines for directory inaccuracies in other states, the problem was not corrected. - The administrative burden on providers is a significant contributor to directory inaccuracies. A typical medical practice may have to respond to requests from an average of 20 different health plans, each with its own platform and timeline for updates. - If a patient receives a surprise bill from an out-of-network provider they found through an inaccurate directory, the health plan is required to limit the patient's cost-sharing to the in-network rate. The provider must also refund any amount paid by the patient above the in-network cost-sharing, plus interest. - Beyond regulatory fines, the hidden costs for health systems include referral leakage to competing hospitals and significant operational inefficiencies. Hospitals are estimated to spend over $3 billion annually on the administrative task of maintaining provider directories.
