Jane Doe (her real name hidden to protect her child) thought she knew how to help her eight-year-old son “Baby Doe.” She was educated, employed by a federal agency, and comfortable navigating bureaucracies and unresponsive gatekeepers. More importantly, she was a fierce advocate for her child with an autism spectral disorder who needed occupational and speech therapies, which he received, and mental health care, which he did not.
Despite living in the suburbs of New York City, with an abundance of mental health professionals, she would have to pay thousands of dollars a month for her child to see these doctors, and her insurance would reimburse a small fraction of that cost. That’s because these doctors were all out-of-network.
Jane’s frustration and anxiety were matched by her anger, because all the doctors she called were listed in her insurance company’s in-network directory, requiring only a $30 co-pay for each visit. Yet the dozens of doctors she called were out-of-network: they either didn’t accept her insurance, didn’t exist, or weren’t psychiatrists. In total, 93% of the listings were erroneous.
Jane encountered an extraordinarily common practice among health insurance companies: ghost networks. The prevalence of grossly inaccurate provider directories is staggering.
The Office of the New York State Attorney General in 2023 found that each of New York’s 13 largest health insurance companies published grossly inaccurate doctor directories. The best directory was only accurate in 35% of its listings; another had an accuracy rate of 0%, and the rest ranked between 5% and 20%, mostly hovering in the single digits.
This problem is not confined to New York, and the impact is serious. The U.S. Senate Finance Committee found that ghost networks are a nationwide problem, and are not limited to mental health providers, but crosses many medical specialties.
Patients affected by ghost networks spend hours calling doctors in directories, getting increasingly frustrated and anxious, exacerbating their condition as care is delayed. Most reported encountering wrong or out-of-service numbers.
The directory inaccuracies are the rule, not the exception. Many called their insurance company to report the directory inaccuracies and ask for updated listings — only for those recommended doctors to not accept the insurance.
Compounding the problem and frustration, when Jane (and dozens of others we interviewed) actually found an in-network doctor, they often heard that the doctor wasn’t accepting new patients, or that there was a six-month waiting list for an appointment.
The injury goes beyond money — though the financial impact is often severe. Out-of-network mental health providers often charge hundreds of dollars per visit, and most plans reimburse members a small fraction of that.
For patients who need to see doctors several times a month, the unreimbursed cost can soar into the thousands of dollars. Those who have the means — or make sacrifices to afford care — are lucky. Many patients simply abandon their search for affordable doctors.
Jane did something many people are afraid to: she agreed to be a representative plaintiff in a class action suit filed by my firm and others in Manhattan Federal Court in October. Her goal is twofold: for the insurance company to clean up its act and publish accurate directories, and to reimburse the thousands of people similarly affected for the thousands of dollars spent on out-of-network doctors.
Jane is brave to step forward, because she is concerned about both losing her privacy and retaliation by the insurance company. Her concerns are not unfounded: The defense lawyers’ first communication with Jane’s legal team demanded identification of Jane and Baby Doe.
Sadly, some patients cannot be compensated through a lawsuit: people who, out of frustration or the barrier of high cost, abandon their search for care. They cannot be part of a class because the harm they experienced is too “individualized.”
Legal rules require “commonality” of damages; someone who is depressed and cannot work is considered different from a person who is anxious and cannot work.
And, not surprisingly, these terribly impacted people typically cannot afford to bring their own lawsuit: the legal fees would dwarf their recovery. And few lawyers would take the case on contingency, because their share wouldn’t come close to their actual costs. Thus, the power and economics of class actions.
Cohen is an attorney at Pollock Cohen in New York, representing Jane Doe.
