Elevance’s Carelon Behavioral Health will pay $2.35 million in penalties, fees and costs and up to $8 million in restitution under two settlements with New York Attorney General Letitia James’ office. The settlements, announced Nov. 10, resolve investigations into mental health “ghost networks” and improper denials of substance use disorder treatment.
The restitution covers members who paid out of pocket for out-of-network mental healthcare because they could not get an in-network appointment. Carelon must also repay, with 12% interest, members who paid extra because it wrongly listed a provider as in network. It must also repay members who paid out of pocket or still owe bills for addiction treatment after an improper denial dating back to Jan. 1, 2020.
Carelon administers behavioral health benefits for more than 4 million New Yorkers. Its clients include EmblemHealth, Anthem Blue Cross Blue Shield, Independent Health and the Empire Plan, which covers state and local government employees.
A secret shopper study by the attorney general’s office found that 82% of surveyed Emblem behavioral health providers that Carelon listed as accepting new patients were effectively unavailable. Investigators also found that Carelon acknowledged the ghost network internally but did not tell Emblem.
A second investigation found that Carelon denied addiction treatment requests in at least 41 cases using criteria not approved by the New York State Office of Addiction Services and Supports. From 2019 to 2022, independent reviewers overturned 17 of 24 appealed denials for Empire Plan members, 27 of 50 for Emblem members and four of six for MVP Health Care members.
Under the settlements, Carelon must:
- Correct directory errors within two business days.
- Verify provider data every 90 days.
- Run quarterly secret shopper surveys.
- Ensure members can get urgent care appointments within 24 hours and initial outpatient appointments within 10 business days.
- Let members see an out-of-network provider at in-network cost if Carelon cannot find them an in-network provider within three business days or if they were incorrectly told a provider was in network.
An independent monitor will report to the attorney general’s office every six months.
The investigations found that Carelon violated a 2015 agreement that its predecessor, ValueOptions, reached with the office. That agreement required accurate directories, an adequate network and state-approved review criteria.
