One of New York’s largest health insurers, EmblemHealth, has agreed to a $2.5 million settlement with the state attorney general’s office following allegations that it failed to correct extensive errors in its mental health provider directories, officials said this week.
The settlement addresses the chronic problem of “ghost networks,” where insurer directories list providers who are unreachable, out-of-network, or not accepting new patients. Such inaccuracies often force consumers to postpone treatment or pay for expensive out-of-network care.
“Health insurers cannot mislead consumers with inaccurate provider directories while families are left without care,” New York Attorney General Letitia James said in a statement.
The investigation by the attorney general’s office found that 82% of providers listed in EmblemHealth’s directory were unavailable for appointments when contacted.
The office further determined that the insurer overstated the availability of its network and failed to comply with state and federal laws requiring mental health care to be as accessible as other medical services.
In addition to the fine—the largest of its kind secured by the state—EmblemHealth must compensate customers who paid out-of-pocket for mental health care because they could not find an available in-network provider from the directory.
An EmblemHealth spokesperson said the company did not admit to the findings but agreed to the settlement to “avoid time-consuming litigation.” The spokesperson added that the insurer is focused on taking “immediate steps to further support our members’ access to care.”
The settlement includes the following mandates for the insurer, which covers more than 3 million people: Correcting inaccurate listings within two business days of discovery; verifying the accuracy of all directory listings every 90 days and oversight by an independent monitor to ensure compliance with these terms.
The attorney general’s office noted that the problem persisted despite a previous settlement agreement in 2011 in which EmblemHealth promised to address directory errors. Between 2018 and 2024, more than 360 customers filed complaints regarding these inaccuracies.
The settlement comes as EmblemHealth faces a separate lawsuit filed in December by New York City employees, who allege the insurer’s directory provided a “deceptive” and “misleading” impression of its network size.
EmblemHealth has declined to comment on that pending litigation.