How the language of access obscures the mechanics of purchasing… and keeps employers from acting as buyers.
By Chris Deacon
This latest case against Blue Shield of California and Magellan is just one of several lawsuits across the country alleging that carriers are knowingly constructing and maintaining illusory provider networks.
These cases do not sue the therapists, physicians, or clinics listed in the directories. They sue the carriers and their network administrators, because those entities are the ones who design, market, and profit from the networks.
In the Blue Shield/Magellan case, plaintiffs claim an 87 percent ghost rate, meaning only 13 percent of listed mental health providers were both in-network and available.
Similar lawsuits have been filed against UnitedHealthcare, Cigna, Aetna, and Elevance (formerly Anthem), advancing similar theories: misrepresentation in plan marketing, network adequacy violations, ERISA fiduciary breaches, Mental Health Parity violations, and unfair business practices.
The common thread is not just inaccuracy. It is the allegation that these networks are designed, maintained, and marketed by the carriers and that carriers have financial and structural incentives to keep them narrow, under-resourced, and difficult to access. One allegation describes it bluntly: when members abandon the search for care, “Defendants do not have to pay for the care they would have received.”
The legal theories are compelling: violations of ERISA fiduciary duties, misrepresentation in plan marketing, network adequacy laws, Mental Health Parity, unfair business practices under state law, and breach of contractual obligations.
But even if these cases succeed – even if plaintiffs win damages, injunctive relief, or improved directory accuracy – the structural problem remains.
This is not fundamentally a directory problem. This is not even a network adequacy problem.
It is a network problem.
