SoftBank-backed Mental Health Unicorn Cerebral Renege on salaries and health insurance for hundreds of therapists

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

IIn October, online mental health startup Cerebral named Olympic gymnast Simone Biles its Chief Impact Officer. “I believe everyone should have access to mental health resources,” read a quote attributed to Biles on the company website.

But Cerebral’s messages don’t match how certain staff have been treated, including many of the therapists who are essential to the care of their patients. In fact, the San Francisco, California-based company, which raised $ 300 million just last week on a $ 4.8 billion valuation under the guidance of SoftBank Vision Fund 2, has more than 200 of its contract statuses Employees changed from salaried to hourly workers over the course of the summer and entitlement to medical, visual and dental services was made dependent on certain quotas being achieved.

“The whole mission of Cerebral, and they have taught us time and again, is to provide accessible and affordable mental health,” said a recent contributor, who asked for anonymity. “And because of that decision, it’s the exact opposite of that.”

Cerebral Co-Founder and CEO Kyle Robertson called the move in an email to “a very difficult business decision” Forbes. “Ultimately, this was done so that our best, most productive therapists would have the opportunity to earn more, and yes, that also means that those less productive workers would earn less.” Robertson said 230 salaried clinicians were “adapted” to the new model been. Current and former employees suggested that the number of those affected was likely higher, with dozens of people quitting shortly afterwards. Robertson did not respond to a follow-up question asking to clarify the total number of people affected by the change, including those who had quit.

When Cerebral first launched in January 2020, it promised to provide affordable mental health services. Patients would pay cash for a monthly subscription to access a combination of therapy visits and medication. Prices range from $ 85 per month for virtual visits to an unlicensed care advisor to $ 325 per month for virtual visits to licensed therapists. The company recently began signing contracts with insurers such as Aetna, Blue Cross Blue Shield, and Cigna, with patients on the network paying $ 29 per month. Robertson said Bloomberg Cerebral has cared for more than 200,000 patients in the past two years and currently employs more than 2,300 clinicians.

Initially, Cerebral primarily hired clinical staff as contractors, including therapists, care counselors, nurses, and psychiatrists. As the company expanded rapidly to all 50 states, it began offering full-time, fringe benefits around March 2021 to meet demand.

“This was a bait and a switch,” one employee wrote on the company’s Slack channel, according to a screenshot shared with Forbes.

ÖOn Monday, August 9th, according to information from seven current and former employees with knowledge of the event, hundreds of employees received an invitation to an obligatory virtual company meeting. COO Jessica Muse had been hired to break the bad news to the staff. She told them that these employees would now be paid per patient session instead of receiving salaries and benefits. They were told that the change would take effect immediately and that as of August 31, they would no longer receive any medical, dental, or vision care benefits. (In the following days and weeks, Cerebral temporarily extended the services several times, most recently until December 31, 2021.) Affected employees were also asked to sign a new contract in which they could use the so-called “Accord” -Pay-per-Visit- System through the end of the week.

For many Cerebral employees, this was a shocking U-turn for a company that many of them had joined because they agreed to its mission to help patients and improve the mental health system. But interviews with current and former employees, emails, documents, and screenshots reveal a botched rollout affecting hundreds of people and a change that is negatively affecting employee mental health.

After the meeting, which lasted about 10 minutes, the company’s Slack channels broke out as many therapists asked how they could possibly digest this message and visit patients for appointments a few minutes later. “To get paid, you had to see these customers,” recalls a current employee. “Whenever you’re not in the mental space to see customers, it’s part of the code of ethics that you take time out to work on yourself. We couldn’t do that either because it came into effect immediately. ”

A pregnant employee with an upcoming due date shared her concerns about the loss of health insurance on Slack, where another employee raised concerns about an operation scheduled for next month, as shown in screenshots with blackened out names shared with Forbes. “That was a bait and a switch,” wrote one person.

Recruiters also had to call employees who hadn’t started at Cerebral but had quit other paid, fringe jobs to let them know of the change, according to people familiar with the situation.

On Aug. 10, CEO Robertson emailed employees at 10:31 p.m. ET, according to a copy that was included. was shared Forbes. He noted that Cerebral had hired employees “to meet rapid customer demand in early 2021 and to cope with major capacity constraints among providers”. However, it had become clear that this model was “unsustainable” and he said there were two options on the table: “carry out layoffs or update employment contracts”.

“I am sorry for the decisions that brought us here. I am sorry for the measures we must now take to stabilize. And I apologize for the confusion in communicating about the changes, ”Robertson wrote to staff. “I understand what it feels like to have the floor pulled from under your feet and how much toll it can be on your mental health, and it was a tough decision.”

But Robertson’s note sounded hollow, especially given the enormous amount of venture capital Cerebral had raised in the company’s brief existence. In October 2020, Cerebral raised an Oak HC / FT-led Series A for $ 35 million with the participation of WestCap; everything that contributed to Robertson on the Forbes 30 Under 30 health list last December. Eight months later, a $ 127 million Series B led by billionaire Len Blavatnik’s Access Industries firm, which also invested billionaire hedge fund manager Bill Ackman, earned Cerebral unicorn status.

Six minutes after Robertson’s apology email, employees received another email from AJ Lopez in Human Resources at Cerebral stating that affected employees would receive $ 2,000 by the end of August “to have a short-term impact on yours To mitigate remuneration “. Existing insurance benefits would be extended by a further month until 09/30/2021. More and more information also leaked out about how exactly the chord model would work. Employees would not be entitled to benefits unless they worked more than 30 hours a week for 90 days and were reassessed every three months, according to current and former employees.

Some reps said this would require up to 60 hours of availability to be open on their calendars, even though they would only be paid for the time they saw customers.

UAccording to the Cerebral model, therapists do not control which patients see them. A patient goes to the website, fills out a form, and then has a choice of dozens of therapists. This lack of control means that under the new pay structure, no therapist can be guaranteed to meet the minimum number of hours. Therapists would supposedly have to book 5 or 6 clients a day, but given the no-show rate, they would actually have to book well above that number to hit the threshold. Some reps said this would require up to 60 hours of availability to be open on their calendars, even though they would only be paid for the time they saw customers. This was a change from when they were employed, where there were no penalties for failing to show up for appointments.

“Anxiety, depression and trauma symptoms among employees have increased and many have had to seek treatment for the worsening symptoms due to the abrupt change,” said a former employee.

For regular 45-minute appointments, therapists would now receive $ 45 and associate therapists $ 40, according to employee interviews and confirmed by internal documents. Failure to show up, therapists would receive $ 10 and associate therapists would receive $ 8. A review will be performed on those individuals who have reached the hourly threshold for 90 days to determine eligibility.

Cerebral management pulled back several times, eventually extending benefits to employees hired before the August move until the end of the year. This month the employees were informed whether they had reached the threshold for a benefit extension into the next year in the last three months.

Forbes spoke to several employees who quit in the weeks and months following the announcement to look for better job opportunities. You described a steady stream of departures among colleagues.

In a statement, Robertson said Forbes that Cerebral has “recruited over 400 new therapists and therapy staff” since August. “We believe our wage rates are among the most competitive in the industry,” he wrote. He did not answer a follow-up question in which he asked how many therapists stopped over the same period.

In an ironic twist that has not escaped employees’ notice, after the change was announced, Robertson posted a post on LinkedIn about his experience recovering from an infection in the hospital. “When I started with Cerebral, I was a cashless first-time founder with no health insurance. Anyone who is not insured knows that daily life requires torturous judgments between health and money, ”he wrote, calling himself“ happy ”to have access to health care now. “This experience strengthened my belief that at Cerebral, as we grow, we need to focus more on the interface between mental and physical health.”

He did not answer a follow-up question in which he explained how, based on his personal experience, he justified the withdrawal of health insurance from some of his own employees.

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