Softbank-Backed Mental Health Unicorn Cerebral Reneged On Salaries And Health Insurance For Hundreds Of Therapists

The company, which raised $300 million at a valuation of $4.8 billion this month, changed the status of more than 200 salaried employees to hourly workers in August and made their health insurance conditional on quotas in 2022.

IIn October, online mental health startup Cerebral named Olympic gymnast Simone Biles as its chief impact officer. “I believe everyone should have access to mental health resources,” says a quote attributed to Biles on the company’s website.

But Cerebral’s messages are inconsistent with how she treats certain employees, including many therapists, as an integral part of providing care to her patients. In fact, the San Francisco, California-based company, which raised $300 million at a $4.8 billion valuation led by SoftBank Vision Fund 2 just last week, changed the contract status of more than 200 of its employees from wage earners to hourly workers over the summer. Transferring eligibility for medical, vision and dental benefits to be contingent upon access to certain quotas.

“Cerebral’s entire mission, and they have continued to dig it inside of us, is to provide accessible and affordable mental health,” said one current employee, who asked not to be identified. “And it’s just the opposite because of that decision.”

Cerebral co-founder and CEO Kyle Robertson called the move a “very difficult business decision” in an email to Forbes. “Ultimately, this was done so that the best and most productive therapists had a chance to earn more, and yes, that also meant that the least productive employees would get less.” Robertson said 230 paid doctors were “adjusted” to the new model. Current and former employees indicated that the number of people affected was likely higher since dozens of people quit soon after. Robertson did not respond to a follow-up question asking for an explanation of the total number of people affected by the change, including those who resigned.

When Cerebral was first launched in January 2020, it promised to provide affordable mental health services. Patients will pay cash for a monthly subscription to access a range of treatment visits and medication. Prices range from $85 per month for virtual visits with an unlicensed care counselor to up to $325 per month for virtual visits with licensed therapists. The company recently began hiring insurers, including Aetna, Blue Cross Blue Shield, and Cigna, with patients within the network paying $29 per month. Robertson told Bloomberg that the Brain Center has cared for more than 200,000 patients over the past two years and is currently staffed by more than 2,300 physicians.

Initially, Cerebral often hired medical staff as contractors, including therapists, care counselors, nurse practitioners, and psychiatrists. As the company rapidly expanded into all 50 states, it began offering full-time employment with benefits around March 2021 as part of a major push to hire more affiliated therapists, who need a supervising therapist to sign off on their clinical visits, as a way to meet demand.

“This was a bait and a diversion,” an employee on one of the company’s Slack channels wrote, according to screenshots shared with Forbes.

theOn Monday, August 9, hundreds of employees received an invitation to a mandatory virtual staff meeting, according to seven current and former employees familiar with the event. COO Jessica Muse is tasked with delivering bad news to employees. I told them that instead of receiving salary and benefits, these employees would now be paid per patient. They were told that the change would be effective immediately and that as of August 31, they would not receive medical, dental or vision benefits. (In the following days and weeks, Cerebral temporarily extended benefits several times, eventually through December 31, 2021.) Affected employees were also asked to sign a new contract agreeing to a so-called “piece” pay-per-visit scheme by the end of the week.

For many Cerebral employees, this was a shocking turnaround for a company many of whom joined because they agreed to a mission to help patients and improve the mental health care system. But interviews with current and former employees, emails, documents and screenshots show a failed show affecting hundreds of people and a change that negatively impacts employees’ mental health.

After the meeting, which lasted about 10 minutes, Slack’s channels erupted, with several therapists wondering how they could expect to absorb this news and start seeing patients for appointments minutes later. “In order to get paid, you had to see these clients,” recalls one current employee. “Anytime you’re not in the space of mind to see clients, it’s part of the code of ethics for you to take some time to work on yourself. We couldn’t even do that, because it was immediately effective.”

An employee who’s pregnant with an upcoming due date shared her concerns about losing health insurance on Slack, with another employee expressing concerns about surgery scheduled for next month, according to screenshots with individual names being withheld. Forbes. One wrote: “This was a bait and a diversion.”

Recruiters also had to start calling employees who had not yet started working at Cerebral but had already left other paid jobs with benefits, to inform them of the change, according to people familiar with the situation.

On August 10, CEO Robertson sent an email to employees at 10:31 p.m. ET, according to a transcript shared with him. Forbes. He noted that Cerebral was hiring paid staff “as a way to meet the rapid customer demand that was piloted in early 2021 and address key capacity constraints faced by service providers.” But he wrote that it has become clear that the model is “unsustainable” and said two options are on the table: “implement layoffs or update employment agreements.”

“I’m sorry for the decisions that led us here. I’m sorry for the actions we now need to take to stabilize it,” Robertson wrote to the staff. “I understand the feeling of pulling the rug out from under you and the impact it can have on your mental health and this, by no means, was an easy decision.”

But Robertson’s note was hollow, especially given the massive amount of investment capital Cerebral has amassed in the company’s short term. In October 2020, Cerebral raised $35 million Series A led by Oak HC/FT with participation from WestCap; It all helped land Robertson on Forbes 30 under 30 health care list last December. Eight months later, a $127 million Series B led by Access Industries pushed billionaire Len Blavatnik, which also included billionaire hedge fund manager Bill Ackman as an investor, to Cerebral into rhino status.

Six minutes after Robertson’s apology email, employees received another email from AJ Lopez in Cerebral’s human resources department, who said affected employees would receive $2,000 by the end of August to “mitigate the short-term effects on your compensation.” Existing insurance benefits will be extended by another month until September 30, 2021. More information is also beginning to pour in about exactly how the piece-work model works. Employees will not be eligible for benefits unless they log in more than 30 hours a week for a 90-day period and will be reassessed on a rolling basis every three months, according to current and former employees.

Some employees said this would require unlocking up to 60 hours of availability in their calendars, though they would only get paid for the time they saw customers.

WLnder Cerebral model, therapists do not control the patients they see. The patient goes to the website, fills out a form, and then has a choice of dozens of therapists to choose from. This lack of control means that, under the new pay structure, no therapist can be guaranteed to reach the minimum hours. Therapists will ostensibly need to book 5 or 6 clients per day, but given the no-show rate, they will in fact need to book much higher than this number to reach the bottom line. Some employees said this would require unlocking up to 60 hours of availability in their calendars, though they would only get paid for the time they saw customers. This was a change when they were getting paid, as there was no penalty when patients didn’t show up for appointments.

“There was an increase in symptoms of anxiety, depression and trauma among employees and many of them had to seek treatment due to the worsening of symptoms due to the sudden change,” said a former employee.

For regular 45-minute appointments, therapists will now receive $45 and co-therapists will receive $40, according to staff interviews confirmed by internal documents. For no-show appointments, therapists will receive $10 while co-therapists will receive $8. For people who have reached the 90-day watch limit, there will be a review to determine eligibility.

Brain Management fell back on track several times and eventually expanded benefits to hired employees prior to the August change through to the end of the year. Employees were told this month if they had reached the minimum for the previous three months in order to extend benefits into next year.

Forbes He spoke with several employees who quit in the weeks and months after the announcement, as they were looking for better job opportunities. They described the constant flow of exits between colleagues.

Robertson said in a statement Forbes That Cerebral has “hired more than 400 new therapists and treatment assistants” since August. “We believe our pay rates remain among the most competitive in the industry,” he wrote. He did not respond to a follow-up question asking how many therapists quit in the same time frame.

In a ridiculous twist that wasn’t lost on staff, Robertson posted a LinkedIn post after announcing the change about his experience recovering from a hospital infection. “When I started Cerebral, I was a cash-strapped first founder without health insurance. As any uninsured person knows, going through everyday means having to make painful judgments between health and money,” he wrote, describing himself as “lucky” to get On healthcare now. “This experience reaffirmed my belief that we at Cerebral should focus more meaningfully on the intersection of mental and physical health as we grow.”

He did not respond to a follow-up question he asked to explain how he justified, given his personal experience, withdrawing health insurance from some of his employees.

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