More than 16,000 New Yorkers will receive payouts after the New York Attorney General collected more than $740,000 from unicorn mental health company Cerebral.
Cerebral, the cash-flush mental health company with a tarnished reputation, paid out $200,000 in penalties and $540,162 in restitution for maintaining a “long and burdensome” cancellation process that often resulted in patients paying for services never received, according to the office of New York State Attorney General Letitia James.
The Attorney General’s investigation also revealed that the company directed its employees to hide negative online reviews and submit falsified positive appraisals.
Cerebral has faced a wave of scrutiny over the last few years. In 2022, The Department of Justice investigated New York-based Cerebral for a potential violation of the Controlled Substance Act. The company has been slammed for overprescribing ADHD medication, eventually terminating its controlled prescription program in 2022.
Later that year, Cerebral laid off more than 1,000 employees, representing 20% of its workforce.
The company once received sky-high evaluations to the tune of $4.8 billion and landed more than $460 million in investments.
Today, the company still provides virtual therapy and psychiatry, prescribing drugs for depression, anxiety, ADHD, bipolar disorder and PTSD, among other conditions. Its website specifies that it may offer controlled substances in the future.
Cerebral’s subscription-based model charges $25 per week for medication or $92 per week for a combination of medication and therapy. The New York Attorney General revealed that the company misled its patients into thinking its services were easy to cancel when in reality, those wishing to cancel were often forced to jump through numerous hoops before the cancellation would go through.
The company offered a click-to-cancel button, but it allowed itself 72 hours to finalize the cancellation, and sometimes, it took a week or even longer. During this time, Cerebral would repeatedly contact its patients with offers to try and convince them not to cancel. If the patient’s billing date fell within the delay period, Cerebral would charge for another month’s services.
The investigation also found that Cerebral billed patients even when it had no clinicians available to provide services.
Patients who posted negative reviews about their experience with Cerebral were asked to remove or edit the review, the Attorney General said. Cerebral directed employees to tell patients, “We wouldn’t want anything online to deter someone from seeking mental health care, and that’s really why we ask people if they are willing to.”
Additionally, Cerebral told its employees to post fake positive reviews as well as to upvote positive reviews and downvote negative comments, effectively masking real negative reviews.
Along with the $740,000 payout, the Attorney General ordered Cerebral to stop its “deceptive and burdensome tactics.”
“Making New Yorkers withstand stressful and extended delays to cancel a subscription for mental health care coverage is unacceptable,” Attorney General James said in a statement. “It is illegal and unfair to make consumers spend extra time or jump through hoops to try to cancel a subscription they no longer need.”
Cerebral told Behavioral Health Business that the Attorney General acknowledged that the company had implemented its recommendations.
“We are pleased to report that Cerebral has reached a settlement with the New York Attorney General (NYAG) to close its investigation into Cerebral’s business practices,” the company said in an emailed statement. “We look forward to continuing to be a trusted mental health partner to all who need care.”
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