A federal judge is allowing most claims to move forward in a proposed class action lawsuit accusing Carelon Behavioral Health of maintaining an inaccurate and misleading directory of in-network mental health providers for New York state employees.
Carelon, the health services arm of Elevance Health, contracts with New York to administer mental health and substance use disorder benefits for state employees and retirees. The current contract is effective through the end of 2028 and is valued at more than $2.7 billion.
Three plan members filed the lawsuit in April 2025, alleging Carelon knowingly published an inaccurate and misleading provider directory to attract customers and create the appearance of compliance with state and federal network adequacy rules. The proposed class would consist of New York state and municipal employees enrolled in the plan at any point from 2019 through the date of class certification who attempted to use the provider directory.
Separately, federal employees with Anthem BCBS coverage filed a lawsuit in October 2024 in the same court, alleging the plan maintained “ghost” mental health provider networks. The case was dismissed in March 2026 after the judge ruled that because the plan covered federal employees, federal law governed the dispute, thereby blocking the state-law claims.
In the ongoing New York case, the plaintiffs described calling large numbers of providers listed as in-network in Carelon’s directory, only to find most were not actually accepting their plan, were not accepting new patients, or could not be reached at the listed contact information. Overall, the plaintiffs allege more than half of the providers listed in the directory either do not exist, are listed with non-working or inaccurate phone numbers, are unavailable to new patients, are not actually in-network, are duplicate entries, or do not provide relevant mental health services.
Carelon filed a motion to dismiss all the claims in August 2025. On March 31, the judge ruled that most of the case can move forward, though he threw out the breach of contract claims. Because Carelon serves only as the third-party administrator, the court said the plaintiffs had no direct contractual relationship with Carelon to sue over.
The remaining claims, including allegations of deceptive business practices, false advertising, fraud, and unjust enrichment, will move forward. The court found the plaintiffs adequately alleged that Carelon told members the directory was reliable while hiding how widespread the inaccuracies actually were.
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