The healthcare system's promise of accessible mental health services increasingly stands in stark contrast to patients' lived reality. On January 8, 2026, the American Psychiatric Association filed a class action lawsuit against EmblemHealth, New York's largest health insurer, exposing a practice that has quietly undermined mental healthcare access for years: the maintenance of "ghost networks"—provider directories populated with clinicians who are unavailable, incorrectly listed, or unaware of their inclusion.
This lawsuit represents more than a dispute between medical professionals and an insurance company. It illuminates a systemic failure in how health insurance networks operate, revealing the gap between the coverage patients believe they have purchased and the care they can actually access.
Understanding Ghost Networks
Ghost networks emerge when health insurance companies maintain provider directories that contain inaccurate, outdated, or misleading information. These directories may list clinicians who no longer accept the insurance plan, who have moved to different locations, who have closed their practices, or who never agreed to participate in the network at all. In some cases, insurers inflate their directories by listing the same providers multiple times under different specialties or locations, or by misrepresenting the credentials of available practitioners.
The consequences extend beyond mere inconvenience. Patients relying on these directories spend weeks or months contacting providers only to discover they cannot schedule appointments. Faced with urgent mental health needs and exhausted options within their supposed network, many must choose between paying substantially higher out-of-network rates or delaying treatment during critical periods.
The EmblemHealth Case: A Window into Widespread Practices
The APA's complaint against EmblemHealth details specific allegations that illustrate how ghost networks function in practice. According to the lawsuit, EmblemHealth's directory issues include misrepresenting nurse practitioners as psychiatrists, duplicating provider listings to artificially expand apparent network size, and including clinicians without their knowledge or consent. The complaint cites cases of New Yorkers who searched unsuccessfully for in-network mental health care for months or even years.
These practices affect EmblemHealth's three million members, but the problem extends far beyond a single insurer. A 2023 report by the New York Attorney General examined mental health provider directories across multiple insurance plans and found widespread inaccuracies, identifying this as a significant barrier during a period of acute behavioral health crisis.
The Dual Harm: Patients and Providers
Ghost networks create damage on two fronts. For patients, the impact is immediate and tangible. Mental health conditions often require prompt intervention, and delays can lead to deterioration, crisis situations, or tragic outcomes. The financial burden adds another layer of stress, as individuals who cannot locate in-network providers must either absorb out-of-network costs or forgo treatment altogether.
For clinicians, the harm operates differently but remains significant. Psychiatrists and other mental health professionals listed in ghost networks receive constant calls from distressed individuals seeking help, forcing them into the uncomfortable position of repeatedly explaining they cannot accept the caller's insurance. This misuse of their professional identity without consent constitutes what the lawsuit frames as trademark violations—the unauthorized appropriation of their names and reputations for commercial purposes.
The broader effect on the clinician-patient relationship also deserves consideration. When patients finally connect with providers only to learn their insurance won't be accepted, it erodes trust in both the healthcare system and the insurance industry.
Regulatory Context and Legal Frameworks
The APA's complaint invokes multiple legal theories, including violations of consumer protection statutes prohibiting deceptive business practices, false advertising laws, and federal trademark protections. These various legal frameworks reflect how ghost networks intersect with different areas of law.
Federal regulations require Medicare Advantage plans to maintain accurate provider directories, and the Affordable Care Act imposed network adequacy standards. Many states have enacted their own requirements for directory accuracy and timely updates. However, enforcement has historically been inconsistent, and penalties often fail to create sufficient deterrent effects given the financial advantages insurers gain from maintaining narrow networks while appearing to offer broad access.
The challenge lies partly in the dynamic nature of provider networks. Clinicians join and leave insurance panels regularly, move practices, change their acceptance of new patients, or modify which insurance products they accept. Maintaining current information requires continuous effort and robust systems—investments that reduce profitability in an industry where margins drive decision-making.
Economic Incentives Behind Ghost Networks
Understanding why ghost networks persist requires examining the economic structures that create them. Insurance companies benefit from appearing to offer extensive provider networks during the plan selection process, when consumers compare options and make purchasing decisions. Broad networks suggest better access and value, influencing enrollment and allowing insurers to command higher premiums.
However, maintaining truly robust networks requires paying competitive rates to providers and actively recruiting clinicians to participate. Mental health providers, particularly psychiatrists, frequently decline insurance participation due to low reimbursement rates, administrative burdens, and utilization review requirements. Rather than addressing these underlying factors by improving payment rates and reducing bureaucratic obstacles, some insurers opt for the appearance of network breadth through inflated directories.
This creates a perverse incentive structure: insurers can market themselves as offering comprehensive mental health coverage while minimizing the actual cost of providing that care, knowing that many members will either pay out-of-network or delay treatment when they cannot navigate the ghost network successfully.
The Mental Health Dimension
The ghost network problem carries particular urgency in behavioral health for several reasons. First, mental health conditions represent a significant and growing public health concern, with rates of depression, anxiety, and other psychiatric disorders rising substantially in recent years. Second, mental healthcare already faces a severe workforce shortage, with inadequate numbers of psychiatrists and other mental health professionals relative to population needs. Third, stigma and other barriers mean individuals seeking mental health treatment often do so only after considerable delay and personal struggle.
When someone finally reaches the point of seeking mental health care and encounters a ghost network, the additional obstacles may prove insurmountable. The energy required to make repeated fruitless phone calls, explain one's situation to multiple unresponsive numbers, and navigate insurance bureaucracy can overwhelm someone already experiencing psychiatric symptoms. The result may be abandoned treatment-seeking, crisis presentations in emergency departments, or worse outcomes that might have been prevented by timely outpatient intervention.
Parallel Issues in Healthcare Access
While the EmblemHealth lawsuit focuses on mental health, ghost networks affect medical specialties as well. Primary care, dermatology, endocrinology, and various surgical subspecialties face similar issues with inaccurate directories. The problem manifests across different insurance products, from employer-sponsored plans to individual market offerings to Medicare Advantage.
Some observers argue that ghost networks represent one manifestation of a broader challenge in American healthcare: the tension between market-driven insurance structures and the goal of universal access to necessary medical services. Insurance companies operate as for-profit businesses accountable to shareholders, creating inherent conflicts with patient welfare when the two objectives diverge.
Potential Solutions and Reforms
Addressing ghost networks requires intervention at multiple levels. Regulatory approaches might include more stringent accuracy requirements, mandatory verification frequencies, and meaningful penalties for non-compliance that exceed any savings insurers realize from maintaining phantom directories. Some have proposed requiring insurers to compensate patients at in-network rates for services obtained out-of-network after documented failed attempts to locate available in-network providers.
Technological solutions could involve real-time directory systems that integrate with provider scheduling platforms, automatically updating availability and insurance participation status. Third-party verification services might audit directories independently. Standardized complaint processes could flag inaccuracies more efficiently.
However, technological fixes alone cannot resolve the underlying economic issues. Sustainable solutions require addressing provider payment rates, reducing administrative burdens that drive clinicians out of insurance networks, and potentially reconsidering the role of private insurance in essential healthcare services like mental health treatment.
Public transparency may also drive change. When insurers face reputational consequences and legal liability for ghost networks, the calculus shifts. Class action lawsuits like the APA's complaint create financial incentives for compliance while compensating harmed individuals.
Implications for Healthcare Policy
The ghost network phenomenon raises fundamental questions about how healthcare is structured and regulated in the United States. It demonstrates how inadequate oversight allows business practices that undermine the stated purpose of health insurance: facilitating access to necessary medical care.
Policymakers face choices about whether current regulatory frameworks suffice or whether more substantial reforms are needed. Options range from incremental improvements in directory accuracy requirements to more transformative approaches such as public option insurance plans, enhanced regulation of network adequacy, or movement toward single-payer systems that would eliminate some current structural problems.
The mental health parity laws passed over recent decades aimed to ensure insurance coverage for behavioral health services equivalent to coverage for physical health conditions. Ghost networks represent a de facto violation of parity principles, creating access barriers for mental health services that patients seeking other medical care might not encounter to the same degree.
The American Psychiatric Association's lawsuit against EmblemHealth spotlights a practice that has operated in the shadows of the healthcare system for too long. Ghost networks harm vulnerable individuals seeking mental health care, waste time and damage the reputations of dedicated clinicians, and undermine the fundamental purpose of health insurance.
Addressing this problem requires acknowledging that it emerges not from isolated failures by individual companies but from systemic incentive structures within American healthcare. Solutions must therefore be similarly systemic, combining regulatory enforcement, technological improvement, economic restructuring, and potentially broader healthcare reform.
As this litigation proceeds, it may establish important precedents about insurer obligations, consumer protections, and the rights of both patients and providers. Beyond the legal outcomes, it serves as a catalyst for a necessary public conversation about ghost networks and the accessibility of mental health care. In a society increasingly recognizing mental health as essential to overall wellbeing, ensuring that insurance coverage translates into actual access to treatment is not merely a regulatory concern but a moral imperative.
References
American Psychiatric Association. (2026, January 8). American Psychiatric Association files class action complaint against EmblemHealth, Inc. https://www.psychiatry.org/
New York State Office of the Attorney General. (2023). Inaccurate and inadequate: Health plans' mental health provider network directories.
Mark Health Law PLLC, Zuckerman Spaeder LLP, The Hufford Law Firm PLLC, & Janove PLLC. (2026). Complaint filed in U.S. District Court, Southern District of New York [on behalf of American Psychiatric Association v. EmblemHealth, Inc.].
Note: This analysis draws primarily from the APA press release and complaint filing. A comprehensive treatment of this topic would benefit from additional sources, including peer-reviewed research on network adequacy, empirical studies of directory accuracy across insurers, regulatory enforcement data, health economics literature on insurance market dynamics, and patient outcome studies examining the health impacts of delayed mental health treatment access.
