117. What is a phantom network? How does it affect treatment choice?

When a managed care company is negotiating with an employer, they usually want to demonstrate that they have many providers in your area to cover the health care needs of employees. Sometimes out of incompetence, and sometimes, perhaps intentionally, managed care companies continue to list providers who resigned from their network, or who never participated in their network. This provides the impression that most employees will have many choices for treatment when they need services. In fact, their choices are very limited.

But, when employees need treatment, they often must call many providers to identify even one who is still in the network and accepting new patients. This adds considerably to the distress experienced by employees who need treatment. It often results in serious delays before someone can locate a treatment provider and begin treatment. This is called a phantom network, because there really isnít much of a network, only the ghosts of providers who once participated, then resigned.

If you discover many ghosts on your managed care provider network, you should complain to your human resources manager, and also file a complaint with the insurance department in your state. If enough people complain, insurance companies will be forced to be truthful in identifying their network providers, or face possible legal sanctions and possible loss of contracts. This may be fraud, as they are claiming they have service providers when they do not, or are claiming a large network when their network is actually very small and restricted. If it is not illegal, it certainly seems dishonest, and should cause you to be concerned about your insurance coverage.
(This is not a legal interpretation, and this is not legal advice. If you have a complaint, please consult with a legal advisor or your state insurance oversight agency.)


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