New York Attorney General (AG) Letitia James reached a $2.5 million settlement with health insurer EmblemHealth following an investigation of the behavioral health provider “ghost networks.” “Ghost networks” are provider networks in which many of the providers listed in the insurer’s directory of “in-network” providers are actually unavailable, not accepting new patients, or not actually participating in the network. The investigation also focused on compliance with state and federal behavioral health parity laws. As part of the settlement, the insurer will pay more than $2.5 million and undertake changes to its policies and procedures.
According to the AG, the EmblemHealth’s provider directories were not accurate and overstated the availability of in-network behavioral health and substance use providers by as much as 80% (meaning the majority of providers were effectively unavailable), resulting in so‑called “ghost networks.” The settlement requires EmblemHealth to implement corrective measures, and compliance is subject to James’s approval. Specifically, EmblemHealth must:
- Establish a robust process to maintain accurate, up‑to‑date provider directories and ensure actual access to care.
- Rapidly correct inaccurate listings by mandating regular provider verification (with removal for nonresponse or inactivity).
- Provide a mechanism for consumers to easily report inaccuracies.
- Implement a complaint‑tracking system.
- Use “secret shopper” monitoring with public reporting results.
EmblemHealth must also expand its behavioral health network, meet appointment-access standards, and allow members to use out-of-network providers at in-network cost-sharing levels when timely in-network care is not available. The company is required to provide restitution to members who paid out of pocket because they could not access in-network behavioral health care. An independent monitor will oversee compliance with the settlement.
For health plans, this settlement underscores a growing enforcement focus on network adequacy, accurate provider directories, and mental health parity compliance. In October 2025, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) released a report on similar “ghost networks” of behavioral health providers in Medicare Advantage and Medicaid Managed Care plans. Health insurers should expect continued scrutiny of their directory data, access standards, and parity practices. Accordingly, insurers may wish to proactively review their behavioral health networks in light of this settlement and increased regulatory interest. Consumer-facing representations, no matter the context, may result in regulatory scrutiny and enforcement when those representations are allegedly false.
