Carelon Behavioral Health Headaches and my reason for withdrawing as a provider

JOURNEY LIFE BALANCE INC.

Jennifer L. Rowe, LCSW, CDP, CADDCT

journeylifebalance.com  |  Licensed in PA and NY

A Notice to My Clients and Colleagues

Why I Left Carelon Behavioral Health

April 2026

I want to be transparent with you about a professional decision I have made, and why it directly affects your access to services through my practice.

I have ended my participation with Carelon Behavioral Health after experiencing significant credentialing and billing failures that made it impossible for me to serve you with the standard of care you deserve. This was not a decision I made lightly. It was a decision the evidence made for me.

And I was not alone.

Who Is Carelon Behavioral Health?

You may not recognize the name. That is by design. Carelon Behavioral Health was formerly known as Beacon Health Options, which itself was formed from a merger of ValueOptions and Beacon Health in 2014. It was acquired by Anthem (now Elevance Health) in 2020 and rebranded as Carelon in 2023.

Carelon operates as a carve-out administrator. This means it manages behavioral health benefits separately from physical health coverage, even when your insurance card shows a different insurer's name. Carelon manages behavioral health for Elevance Health's Anthem commercial and Medicare Advantage plans, as well as many state Medicaid programs across the country.

In New York, Carelon wears two significant hats: it currently administers the Empire Plan Mental Health and Substance Use Program under NYSHIP (covering New York State employees and retirees), and it has administered behavioral health benefits for EmblemHealth members including former GHI plan participants, covering hundreds of thousands of New York City municipal employees and their families.

The Documented Problems Are Not Isolated

What I experienced in my own practice is part of a documented, nationwide pattern of administrative failure, billing abuse, and access barriers affecting both providers and the clients they serve.

New York (NYSHIP): Class Action Lawsuit for Ghost Network Fraud

In April 2025, law firms Pollock Cohen LLP and Walden Macht Haran & Williams LLP filed a class action lawsuit on behalf of more than one million patients against Carelon Behavioral Health. The lawsuit alleges that Carelon knowingly published a fraudulent provider directory, creating the appearance that far more mental health providers accepted their insurance than actually did.

This practice is called a "ghost network." Attorneys conducted secret shopper studies, calling 300 providers listed in Carelon's directory and confirming the widespread inaccuracies. Patients were directed to providers who could not actually see them under their plan, resulting in significant out-of-pocket expense, delayed care, and documented emotional and medical harm.

As of March 2026, a federal judge ruled that the core claims, including deceptive business practices, false advertising, fraud, and unjust enrichment, will move forward. The NYSHIP contract with Carelon is valued at over $2.7 billion and runs through 2028.

New York (EmblemHealth/GHI): Systemic Access Failure

Carelon has administered all behavioral health services for EmblemHealth members, the plan covering New York City municipal employees, through its contracted network under the EmblemHealth Behavioral Management Program. All utilization management and case management flows through Carelon.

The same ghost network infrastructure and directory inaccuracies documented in the NYSHIP lawsuit apply to this population. Clients searching for in-network mental health providers through EmblemHealth were relying on a Carelon-managed directory subject to the same systemic failures.

Maryland: Public Behavioral Health System Collapse

When Carelon took over as the Administrative Services Organization for Maryland's Public Behavioral Health System in January 2025, providers immediately reported claims going unprocessed beyond 30 days, severely delayed or missing payments, and a complete breakdown in provider communication. Multiple clinicians and agencies reported identical experiences. Carelon repeatedly promised meetings with affected providers that never happened.

Nationwide: Credentialing and Billing Nightmares

BBB complaints filed by providers across multiple states document a consistent pattern:

•         Contracts signed and countersigned but stuck in 'network loading' for months with no resolution or timeline given

•         Providers paid at incorrect reimbursement rates for years, with Carelon acknowledging errors but refusing to make providers whole retroactively

•         Tax identification number changes left unanswered for 12 months or longer

•         Providers terminated from contracts without prior notice or explanation, cleared by state licensing boards but still dropped by Carelon

•         Credentialing applications started in October with no status updates unless the provider initiates contact

States Where Carelon Has Documented Issues

State / Plan	Documented Issue
New York (NYSHIP)	Ghost network class action lawsuit covering 1M+ state employees. Court allowed fraud and deceptive practices claims to move forward March 2026. Contract valued at $2.7B through 2028.
New York (EmblemHealth/GHI)	Carelon administers all behavioral health benefits for EmblemHealth members including former GHI plan participants — hundreds of thousands of NYC municipal employees and their families — through its contracted provider network.
Maryland	Took over as Medicaid ASO in January 2025. Immediate widespread claims processing failure beyond 30 days, missed payments, broken provider communication, and promised meetings that never occurred.
Pennsylvania	Manages Medical Assistance (Medicaid) behavioral health for 11 western PA counties. BBB complaints document credentialing stalls, incorrect reimbursement rates paid for years, and TIN changes ignored for 12+ months.
California	Operates as Carelon Behavioral Health of California. Manages Medi-Cal and commercial behavioral health benefits. Provider handbook documents credentialing and quality sanctions processes.
Massachusetts	Administers the Massachusetts Behavioral Health Partnership (MBHP), the Medicaid behavioral health program. Credentialing and network access complaints mirror national pattern.
Colorado	Served as ASO for Health Colorado (Region 4) Medicaid. Effective July 2025, Health Colorado ended management of Health First Colorado members, suggesting ongoing administrative disruption.
Washington	Carelon Behavioral Health of Washington administers state behavioral health contracts and crisis services.
Connecticut	Carelon administered certain home health and behavioral health benefits in CT. As of January 2025, CT home health credentialing and claims management was restructured.
West Virginia	Similar restructuring of Carelon-administered home health and behavioral health programs effective January 2025.

The Bigger Picture

The Carelon situation is unfolding at a moment of reduced federal oversight. The 2024 Final Rule under the Mental Health Parity and Addiction Equity Act, intended to strengthen how insurers manage behavioral health benefits, has faced a non-enforcement policy as of May 2025. This means insurers currently retain broad discretion in setting coverage limits and managing networks, with limited federal consequence.

The practical result: vulnerable people seeking mental health care are being directed to providers who cannot see them, while those providers are fighting billing systems that delay, underpay, or ignore legitimate claims.

What This Means for You

If you have been using or attempting to use Carelon-administered benefits to access mental health care, you may be encountering barriers that are systemic, documented, and not a reflection of your provider's willingness to serve you. You deserve to know that.

I made the decision to leave Carelon because staying would have meant accepting a system that compromised my ability to be fully present, fully compensated, and fully accountable to you.

I remain deeply committed to providing you with exceptional, ethical, evidence-based care. If you have questions about your coverage, your options, or next steps, please reach out. I am happy to discuss:

•         Self-pay and sliding scale options

•         Out-of-network benefit use and superbills

•         Workbooks, workshops, and psychoeducational programs available at accessible price points

•         Referrals to other trusted providers if needed

You are not alone in navigating this. Neither am I.

With care,

Jennifer L. Rowe, LCSW, CDP, CADDCT

Journey Life Balance Inc.

www.journeylifebalance.com