Introduction to the Elevance Health Class Action Lawsuit
The Elevance Health Class Action Lawsuit means that Elevance Health faces a major $100 million class action lawsuit about “ghost networks.” The healthcare giant’s troubles stem from a startling discovery – only 51 out of 300 providers in the Empire Plan directory actually accepted new patients and were in-network. Legal experts believe this revelation could trigger similar lawsuits across the healthcare industry.
The company’s financial story paints a mixed picture. Their stock gained 12% in the last year but lagged behind the broader US market’s 11.6% rise. The current Elevance Health Class Action Lawsuit adds another chapter to Elevance Health’s complex legal history. The company paid penalties of more than $1 billion since 2000.
The biggest problem for customers shows in the numbers – 516 violations cost over $709 million and directly affected consumer protection. In spite of that, analysts remain bullish and predict the company’s earnings will reach $9.6 billion by 2028.
Elevance Health Lawsuit Alleges Company Misled Members With Ghost Network
The Elevance Health Class Action Lawsuit filed on April 28, 2025 represents three New York State Health Insurance Program (NYSHIP) members against Carelon Behavioral Health, Elevance’s health services division. The plaintiffs want class action status for “many thousands” of state and municipal employees in New York.
The lawsuit centers on claims that Carelon “knowingly publishes an inaccurate and misleading provider directory” to attract potential customers and appear compliant with state and federal network requirements. The directory lists mental health providers who don’t exist, won’t accept the insurance, have wrong contact information, or aren’t taking new patients.
Attorneys ran extensive “secret shopper” surveys from November to February to validate these claims. Their investigation showed that only 51 out of 300 providers in the Empire Plan directory accepted the insurance and took new patients. One plaintiff’s search within a 25 miles found just 14 available appointments. This meant “an 86 percent ghost rate for all calls”.
Patients have faced significant financial burdens. One plaintiff found and received care from a provider listed as in-network with Carelon. They ended up being charged $1,017, with only $537 covered by out-of-network benefits.
The lawsuit claims these “ghost networks” break multiple regulations. These include the No Surprises Act, Mental Health Parity and Addiction Equity Act, state consumer protection laws, insurance regulations, and contractual obligations to enrollees.
Steve Cohen, an attorney for the plaintiffs, said “It is an abomination that they didn’t get the coverage they were paying for; and more importantly, didn’t receive the mental health care they or their loved one needed”.
This marks the second lawsuit in less than a year about ghost networks in Elevance’s subsidiaries. Anthem Blue Cross Blue Shield members made similar claims in October. Legal experts believe such class actions will spread across the country since these problems are systemic and not unique to New York.
Regulators Investigate Network Adequacy Violations
CMS has imposed a Civil Money Penalty of $149,060 on Elevance Health for contract administration violations. This penalty came in January 2025, as federal regulators took action amid growing concerns over network adequacy.
The U.S. Senate Finance Committee’s investigation into ghost networks painted a grim picture. Their research found that 82% of directory listings didn’t work properly in six states. The situation in Oregon proved even worse, where every single provider contacted turned out to be a ghost listing.
The problem runs deep. New York’s attorney general’s study showed that 86% of mental health providers in health plans’ networks were essentially “ghosts”. These findings support the claims made in the current lawsuit.
Government agencies are taking steps to fix these issues. Medicare Advantage network adequacy reviews will include access to mental health providers in 2025. The agency made insurers tell their members when mental health providers leave networks back in 2023.
CMS has drafted new rules that would make Medicare Advantage and Medicare Part D carriers update their network directories within 30 days of any provider changes. The rules would also require insurers to submit network lists to CMS in a format that works with the Medicare Plan Finder website.
Ghost networks create real problems, especially in mental health care. Tim Clement, vice president of federal government affairs at Mental Health America, points out that providers waste time telling patients they don’t take certain insurance.
Despite new regulations, challenges remain. Maureen Maguire from the American Psychiatric Association’s words sum it up well: “We have urged legislators and regulatory bodies that the burden has to be on the plans to ensure that errors are fixed, and their directories are accurate”.
Investors React to Legal and Financial Fallout
Elevance Health’s legal challenges and disappointing financial results sparked sharp reactions in financial markets. The company’s stock dropped 5.8% ($32.21 per share to $520.93) at the time executives announced they were “expecting second-half utilization to increase in Medicaid” on July 17, 2024.
The situation became worse when Elevance missed consensus earnings per share expectations by $1.33 (13.7%) on October 17, 2024, “due to elevated medical costs in [its] Medicaid business”. This news caused the stock to plunge 10.6% ($52.61 per share) to $444.35.
A securities class action lawsuit (Case No. 1:25-cv-00923) emerged in May 2025. The Elevance Health Class Action Lawsuit claims Elevance misled investors about financial risks from Medicaid member acuity changes. The company allegedly failed to disclose that healthier Medicaid recipients left its programs. This created a population with higher medical needs—a change not considered in rate negotiations or 2024 financial guidance.
The stock trades about 30% below its April 2024 peak. Market experts predict a 4.6% decrease by June, but long-term forecasts point to recovery. The 2025 year-end targets stand at $417.41 (8.6% above May levels), and 2028 projections reach $551.73.
Elevance’s Q1 2025 results showed strength despite market pessimism. The company’s operating revenue grew 15% year-over-year to $48.80 billion. Management repurchased 2.2 million shares for $880 million and distributed quarterly dividends of $386 million.
The market responded well to recent earnings announcements. UnitedHealth’s disappointing results caused industry-wide stock declines. Yet, Elevance’s shares rose 2% to $414.00 in early trading after beating Q1 expectations with adjusted earnings of $11.97 per share compared to analyst predictions of $11.38.
Shareholders who bought ELV between April 18, 2024, and October 16, 2024, can seek recourse through the Elevance Health Class Action Lawsuit. The lead plaintiff motion deadline ends July 11, 2025.
Conclusion
The legal battle with Elevance Health goes beyond a $100 million lawsuit. This case emphasizes a systemic problem of “ghost networks” that affects many patients who need care, especially when you have mental health services. A troubling revelation showed only 51 out of 300 providers were available. This points to a widespread issue rather than an isolated case.
Regulatory bodies have stepped up their oversight. CMS now imposes penalties and demands stricter network directory accuracy. State-level investigations confirm these problems are systemic. New York’s attorney general discovered 86% of mental health providers couldn’t be reached.
Elevance Health’s financial strength persists despite these challenges. The company’s stock dropped 30% from its April 2024 peak. Yet their Q1 2025 results showed a 15% year-over-year increase in operating revenue. Investors now face a tough choice between short-term legal risks and long-term growth potential.
The Elevance Health Class Action Lawsuit could set a precedent for the healthcare industry. Legal experts believe similar class actions will emerge nationwide as patients learn about their rights. The regulatory world keeps changing. CMS now requires more frequent directory updates and transparency.
The Elevance Health Lawsuit’s outcome will influence how insurance providers handle their networks. Patients trapped in these ghost networks face heavy burdens, like the plaintiff who paid $1,017 for supposed in-network care. Elevance Health’s legal and reputation challenges raise a bigger question: Will this lawsuit force real change in insurance companies’ network management?
We’ll keep tracking this story as the class action moves through courts and regulatory responses develop.
Frequently Asked Questions About the Elevance Health Lawsuit
Q1. What is the “ghost network” issue in the Elevance Health lawsuit? The “ghost network” refers to inaccurate provider directories that list mental health professionals who are either unavailable, not accepting new patients, or not actually part of the network. This misleads members about the availability of in-network care.
Q2. How widespread is the problem of inaccurate provider directories? Studies have shown the problem is quite extensive. In one investigation, only 51 out of 300 listed providers were actually accessible and accepting new patients. Other surveys have found similarly high rates of inaccuracy across multiple states.
Q3. What are the financial implications for Elevance Health? Elevance Health faces a $100 million class action lawsuit and has seen its stock price drop significantly. However, the company still reported increased operating revenue in recent quarters, presenting a complex financial picture.
Q4. How are regulators responding to these network adequacy issues? Regulators are increasing scrutiny and implementing stricter requirements. The Centers for Medicare and Medicaid Services (CMS) has imposed penalties and is requiring more frequent updates to provider directories. State-level investigations are also ongoing.
Q5. What impact does this have on patients seeking mental health care? Patients face significant challenges in accessing care, often encountering difficulties finding available in-network providers. This can lead to delays in treatment, unexpected out-of-pocket costs, and added stress when seeking mental health services.
Contact Timothy L. Miles Today About an Elevance Health Class Action Lawsuit
If you suffered losses in Elevance Health stock, call us today for a free case evaluation about an Elevance Health Class Action Lawsuit. 855-846-6529 or [email protected] (24/7/365).
Timothy L. Miles, Esq.
Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
300 Centerview Dr. #247
Mailbox #1091
Brentwood,TN 37027
Phone: (855) Tim-MLaw (855-846-6529)
Email: [email protected]
Website: www.classactionlawyertn.com
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