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Carelon, a division of Elevance Health, has agreed to pay over $10 million to settle two New York investigations into misleading mental health provider networks and improper coverage denials for substance abuse treatment. The settlements include $2.35M in penalties and up to $8M in restitution for affected members. The case highlights the growing national concern over inaccurate "ghost networks" in insurance plans.
Carelon, the behavioral health division of Elevance Health, has agreed to pay more than $10 million to resolve two investigations by New York Attorney General Letitia James. The settlements stem from findings that Carelon misled members by directing them to providers who were actually out-of-network — a practice known as a "ghost network" — and improperly denied coverage for substance abuse disorder treatment.
The company manages behavioral health benefits for over 4 million New Yorkers across major plans including Anthem Blue Cross, EmblemHealth, Independent Health, and the Empire Plan. The alleged misconduct also violated a 2015 agreement with the AG's office, in which Carelon had already committed to maintaining accurate provider networks and using approved criteria when denying substance abuse treatments.
By the Numbers:
Why it matters: Ghost networks leave patients — especially those seeking urgent mental health or addiction care — unable to access in-network providers, driving up costs and delaying critical treatment. This settlement signals growing regulatory pressure on insurers to maintain accurate, accessible provider directories.
