One of New York’s largest health insurance companies will pay a multimillion-dollar fine for failing to correct a series of mistakes that made it difficult for customers to receive mental health care.
Emblem Health this week agreed to a $2.5 million settlement with the New York State Attorney General’s Office, alleging numerous inaccuracies in the list of mental health providers in its network, a problem that has persisted for years.
The fine is the largest amount secured in years of efforts by the state attorney general’s office to crack down on a chronic problem of provider directory errors, also known as ghost networks. This problem has led customers to postpone treatment, forgo treatment, and pay for more expensive out-of-network providers.
The agency found that Emblem Health overstated the availability of in-network mental health providers and failed to comply with state and federal laws that require insurers to make mental health care available like other types of medical care.
“Health insurance companies cannot mislead consumers with inaccurate provider lists while leaving their families without care,” state Attorney General Letitia James said in a statement.
EmblemHealth did not respond to ProPublica’s questions. A spokesperson said in a statement that the insurer “does not acknowledge” the state attorney general’s findings but agreed to the settlement “to avoid lengthy litigation.” The spokesperson added that the insurer is “committed to taking immediate steps to further support our members’ access to care.”
ProPublica’s 2024 series “Mental Barriers in America” investigated how ghost networks limit patients’ access to mental health care. Our report showed that the investigation into the ghost network by the state attorney general’s office was one of the rare instances nationwide in which a health insurance company faced influence from an elected official.
According to the settlement, from 2018 to 2024, more than 360 Emblem Health customers complained about these errors to either the insurer, a subcontractor that administers the insurer’s mental health benefits, or the Attorney General’s Office. However, Emblem Health failed to address the issue, even though the insurer promised to do so as part of a settlement agreement signed in 2011, the settlement states.
A report released by the agency in 2023 found that Emblem Health and more than a dozen other insurance companies failed to keep their lists of mental health providers free of serious errors. According to the report, the agency contacted a sample of providers — about 400 on the rosters of 13 insurance companies — but found that most were “unreachable, out of network, or not accepting new patients.” The report found that 82% of providers listed in EmblemHealth’s directory who received calls were unable to get an appointment.
This week’s settlement noted that an investigation into the accuracy of Emblem Health’s own directory listings found “similar results” to those found by James’s office.
The insurer, which covers more than 3 million people in New York and surrounding states, has agreed to compensate customers who paid out-of-pocket for mental health care because they were unable to get an appointment with a provider listed in its network.
As part of the settlement, Emblem Health also committed to taking additional steps to correct errors in its listings. The insurer promised to correct inaccurate listings within two business days of becoming aware of the error and to check each listing for accuracy every 90 days.
The settlement also requires the establishment of an independent monitor to monitor Emblem Health’s progress to ensure that Emblem Health complies with the terms of the settlement.
Emblem Health is also the subject of a lawsuit filed in December by New York City officials. Officials claimed that errors in the insurance directory gave them a “deceptive” and “misleading” impression of the size of the company’s provider network. An Emblem Health spokesperson recently told ProPublica that the insurance company does not comment on pending litigation.
