What's Happening?
Recent legal and regulatory developments have brought attention to the issue of 'ghost networks' in self-funded health plans. Ghost networks refer to provider directories that list healthcare providers
who are not actually available to patients, either because they are unreachable, not accepting new patients, or no longer part of the network. This issue has been highlighted in the case of Hecht v. Cigna, where plan participants alleged that Cigna misrepresented its network by listing inaccessible behavioral health providers. The court found that such misrepresentations could violate the Employee Retirement Income Security Act (ERISA) fiduciary duties, as well as state consumer protection laws. This case, along with increased regulatory scrutiny, underscores the importance of accurate provider directories for plan participants.
Why It's Important?
The emergence of ghost networks poses significant challenges for self-funded health plans and their participants. These networks can lead to a breach of fiduciary duties under ERISA, as plan sponsors are required to provide accurate information about available healthcare providers. Misleading directories can result in participants being unable to access necessary care, which can have serious health implications. Additionally, the issue raises compliance concerns under the Mental Health Parity and Addiction Equity Act (MHPAEA) and the No Surprises Act (NSA). As regulators and courts increasingly focus on this issue, health plans may face legal and financial repercussions if they fail to address ghost networks effectively.
What's Next?
As awareness of ghost networks grows, it is likely that regulatory bodies will continue to scrutinize health plans to ensure compliance with ERISA, MHPAEA, and NSA requirements. Health plans may need to invest in more robust systems to verify the accuracy of their provider directories and ensure that listed providers are genuinely available to participants. Failure to do so could result in further litigation and regulatory penalties. Additionally, plan sponsors may need to enhance their communication with participants to manage expectations and provide clear information about network availability.
