Blue Shield class action claims insurer maintained ‘ghost network’ of providers

Blue Shield class action overview:

• Who: Four policyholders filed a class action lawsuit against Blue Shield of California Life & Health Insurance Company, Magellan Health Inc., Magellan Healthcare Inc. and Human Affairs International of California.
• Why: Plaintiffs allege the defendants misrepresented the scope of their coverage by maintaining a “ghost network” of mental health providers.
• Where: The Blue Shield class action lawsuit was filed in California federal court.

A new class action lawsuit alleges Blue Shield of California and Magellan Health maintained a “ghost network” of mental health providers who do not exist or do not accept new patients.

Plaintiff Jenniffer Roiz and three others filed the class action lawsuit against Blue Shield of California Life & Health Insurance, Magellan Health, Magellan Healthcare and Human Affairs International of California on Nov. 19 in California federal court.

The plaintiffs allege the defendants misrepresented the scope of their coverage and extent of their provider networks.

The Blue Shield class action lawsuit claims the defendants misled patients in need of qualified mental health providers by publishing a “grossly inaccurate” directory of doctors and therapists, also known as a “ghost network.”

“When people in need are unable to find an in-network mental health provider, urgent mental health treatment is often delayed and, at worst, abandoned completely,” the complaint says.

Blue Shield, Magellan Health benefited in numerous ways from ‘ghost network,’ lawsuit says

The plaintiffs claim Blue Shield and Magellan Health benefited from the ghost network by attracting more customers and charging higher premiums.

The Blue Shield class action lawsuit alleges the defendants also cut down on their own costs by not expending resources to keep and publish a robust provider network list or pay for members’ care.

The plaintiffs claim they were forced to pay for out-of-network care or go without treatment because they could not find in-network providers.

The Blue Shield class action lawsuit asserts claims for breach of contract, breach of fiduciary duty, false advertising, unfair competition and unjust enrichment.

The plaintiffs are suing on behalf of anyone who bought or enrolled in a Blue Shield plan in California from 2019 to the date of class certification. They seek certification of the Blue Shield class, damages, fees, costs and a jury trial.

A separate class action lawsuit, filed earlier this year, alleges Blue Shield of California shared personal information of patients on its website via Google Analytics.

What do you think of the allegations made in this Blue Shield class action lawsuit? Let us know in the comments.

The plaintiffs are represented by Ben Travis of Ben Travis Law APC, Steve Cohen of Pollock Cohen LLP and Jacob Gardener of Walden Macht Haran & Williams LLP.

The Blue Shield class action lawsuit is Roiz, et al. v. Blue Shield of California Life & Health Insurance Company, et al., Case No. 4:25-cv-09978, in the U.S. District Court for the Northern District of California.

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