Carelon Ghost Network Lawsuit: Claims, Ruling, and Class Scope

The Carelon ghost network lawsuit is a federal class action filed in April 2025 accusing Carelon Behavioral Health of publishing a mental health provider directory so full of errors that more than 80% of listed providers cannot actually be seen by patients. In March 2026, a Manhattan federal judge allowed most of the plaintiffs’ claims to proceed, and the case is now in discovery on behalf of what could become a class of more than one million New York state employees and their family members.

What the Plaintiffs Say Carelon Did

Three members of the New York State Health Insurance Program’s Empire Plan sued Carelon on April 28, 2025, in the U.S. District Court for the Southern District of New York. Jane Doe of Westchester County, Hannah Landerer of Nassau County, and Steven Marks of Rockland County all get their mental health and substance use disorder benefits through Carelon, which administers those benefits for the state under a contract running through the end of 2028.¹

The heart of the complaint is a “secret shopper” audit. Plaintiffs’ counsel called 300 providers listed in Carelon’s Empire Plan directory. Only about 17% actually accepted the insurance and had availability for new patients.² The rest, more than 80% of the listings, were said to fall into one or more failure categories: providers who do not exist, phone numbers that do not work, clinicians who are not actually in-network, listings with incorrect specialties, or providers not accepting new patients.³

The complaint frames those inaccuracies as more than sloppy record-keeping. It alleges that Carelon uses the inflated directory to make its network look adequate and to attract customers while knowing the listings are unreliable, and that the result is real harm to plan members: delays in getting mental health treatment, thousands of dollars paid for out-of-network care, and patients who abandon the search for help altogether.³

The Legal Claims

The original complaint pleaded eight causes of action. Among them: breach of contract, deceptive business practices and deceptive advertising under New York’s consumer protection laws, a violation of New York Insurance Law § 4226, fraudulent misrepresentation, negligent misrepresentation, and unjust enrichment. Plaintiffs also pointed to the No Surprises Act and the Mental Health Parity and Addiction Equity Act as sources of Carelon’s obligation to keep an accurate directory.³

Carelon has not commented publicly on the litigation. As of late April 2026, the company had not responded to press questions about the case.⁴

What Judge Ramos Ruled in March 2026

Carelon moved to dismiss the complaint in August 2025. On March 31, 2026, U.S. District Judge Edgardo Ramos granted the motion in part and denied it in part.⁵

The court threw out the breach of contract claim, along with the related claim for breach of the covenant of good faith and fair dealing. Carelon’s contract is with the State of New York, not with the individual Empire Plan members, so the plaintiffs lacked the direct contractual relationship those claims require.⁴

Everything else stayed. Judge Ramos wrote that the plaintiffs had “adequately alleged that Carelon told members the directory was reliable while hiding how widespread the inaccuracies actually were.”⁶ The surviving claims are the deceptive business practices count, deceptive advertising, the New York Insurance Law § 4226 count, fraudulent misrepresentation, negligent misrepresentation, and unjust enrichment, which the court kept as an alternative theory grounded in the allegation that Carelon profited from the inaccurate directory.⁷

Where the Case Stands Now

Carelon filed its answer on April 28, 2026, and the court held a status conference the same day. A scheduling order followed on May 5, 2026, putting the case on a discovery track that runs through April 2027.⁵ Under the proposed schedule, plaintiffs’ initial discovery requests were due in late May 2026, non-expert depositions are to be completed by November 2026, and expert reports are due in early 2027.⁸

The class has not been certified. Carelon’s proposed schedule would have plaintiffs file their class certification motion by November 2026, with expert disclosures on that issue due in September 2026, but the court has not set a firm deadline and the parties submitted competing proposals.⁸ If a class is certified, it would cover more than one million NYSHIP Empire Plan members.⁹

Who the Case Covers, and Who It Does Not

The proposed class is limited to members of the NYSHIP Empire Plan, the health coverage for New York state employees and their families. Carelon administers mental health and substance use disorder benefits for that plan, including its 24-hour clinical referral line and its online provider directory.¹⁰

People covered by other Carelon or Elevance-affiliated plans are not part of this lawsuit. The distinction matters because a separate ghost network case, filed in October 2024 against Anthem Blue Cross Blue Shield by federal employees, was dismissed in March 2026. The judge in that case ruled that federal law governed the dispute, which blocked the state-law claims the plaintiffs had brought.⁶ The Carelon plaintiffs are pursuing state consumer protection claims through a state-employee plan, which is why those claims have room to move forward.

Why This Case Fits a Pattern

A ghost network is a provider directory that lists clinicians as in-network and available when they are not: the provider left the plan, stopped taking new patients, moved, retired, or was never reachable at the listed contact information. Mental health, where provider shortages are already sharp, is where the gap between the directory and reality tends to be widest.

In 2023, New York Attorney General Letitia James released a secret shopper study of 13 health plans in the state. Her office called 396 providers listed as in-network for mental health care and got just 56 appointment offers, a success rate of 14%. Rates across plans ranged from 0% to 35%.¹¹

That report set off enforcement. EmblemHealth agreed in February 2026 to a $2.5 million settlement with the AG’s office, promising to compensate affected members, verify listings every 90 days, and submit to independent monitoring, without admitting the findings.¹² MVP Health Plan settled with the AG for $250,000 in penalties plus a restitution program for members who paid out of pocket for mental health care due to directory errors going back to January 2020.¹³

Carelon has been down this road before under a different name. The AG’s 2023 report noted that New York had already entered a 2015 settlement with Carelon’s predecessor, then called ValueOptions/Beacon Health Options, requiring it to ensure network adequacy and directory accuracy.¹¹ The company rebranded as Carelon Behavioral Health in March 2023 after Elevance Health acquired Beacon Health Options around 2020.¹⁴

Related Cases by the Same Plaintiffs’ Firms

Pollock Cohen LLP and Walden Macht Haran & Williams LLP, the firms behind the Carelon case, have filed a series of parallel actions.

In July 2025 they sued Anthem Health Plans, Carelon, and Elevance Health in Connecticut state court, alleging that more than 70% of listed providers in those companies’ directories are not actually in-network, do not exist, or are not at the listed addresses. The Connecticut complaint also alleges improper denial of covered services and failure to correctly apply patient out-of-pocket spending to deductibles.¹⁵ Named examples include a family paying thousands each month for out-of-network autism treatment and a therapist who found that none of the listed in-network therapists were actually available.¹⁶

In October 2025, the same firms filed a ghost network case against Healthfirst PHSP, Inc. in the Southern District of New York, also before Judge Ramos. It covers enrollees in certain Healthfirst qualified health plans and essential plans in New York. As of mid-2026, Healthfirst has moved to dismiss and the plaintiffs’ response was due in July 2026.¹⁷

1
New York State Office of the State Comptroller. Contract C000743 — Carelon Behavioral Health Inc.
2
Walden Macht Haran & Williams LLP. WMHW and Pollock Cohen File Class Action Lawsuit Against Carelon Behavioral Health
3
Pollock Cohen LLP. Class Action Complaint — Jane Doe et al. v. Carelon Behavioral Health, Inc.
4
Fierce Healthcare. Blue Cross Plan Accused of Perpetrating Fraud in Ghost Network Class Action Lawsuit
5
CourtListener. Doe v. Carelon Behavioral Health, Inc., No. 1:25-cv-03489
6
Becker’s Payer Issues. Elevance Mental Health Ghost Network Lawsuit to Move Forward, Judge Rules
7
Pollock Cohen LLP. Court Allows Key Claims to Proceed in Ghost Network Case Against Carelon Behavioral Health
8
Georgetown Law Litigation Tracker. Defendants’ Proposed Discovery Plan — Jane Doe et al. v. Carelon Behavioral Health
9
Pollock Cohen LLP. Ghost Networks Class Action — Carelon NYSHIP
10
New York State Department of Civil Service. NYSHIP Empire Plan Benefits Providers
11
New York State Office of the Attorney General. Inaccurate and Inadequate: Health Plans’ Mental Health Provider Network Directories
12
ProPublica. EmblemHealth Ghost Network Settlement — Mental Health
13
New York State Office of the Attorney General. Attorney General James Secures Settlement With MVP Health Plan Over Mental Health
14
Behavioral Health Business. Elevance’s Beacon Health Options Rebrands to Carelon Behavioral Health
15
PR Newswire. Pollock Cohen and Walden Macht File Class Action Against Anthem Health Plans, Carelon, and Parent Company Elevance
16
Behavioral Health Business. Carelon, Elevance, and Anthem Hit With Another Ghost Network Lawsuit
17
Georgetown Law Litigation Tracker. Greene et al. v. Healthfirst PHSP Inc.