Problems at LifeStance Health (LFST)
LifeStance Health (NASDAQ: LFST — $2.29 billion) is on a mission “to help people lead healthier, more fulfilling lives by improving access to trusted, affordable, and personalized mental health care.” The company is “one of the nation’s largest outpatient mental health platforms” with over 5,000 therapists operating across 33 states serving over 6 million virtual and in-person visits in the last twelve months. The private equity-backed company has grown rapidly by acquiring smaller therapy clinics and investors view the company as a perfect play on our growing mental health crisis. The Bear Cave doesn’t.
Through numerous Freedom of Information Act requests, The Bear Cave has uncovered dozens of complaints concerning overbilling, fraudulent billing, and unfair and deceptive business practices. The complaints allege a pattern of misconduct including allegations that LifeStance is scheduling therapy appointments without the knowledge of patients to incur spurious cancellation and no-show fees, allegations that LifeStance added unearned billing codes to patient bills, allegations that LifeStance sends bills to people that have never used its services, and multiple employee reviews concerning billing fraud. In addition, the company has experienced high executive turnover and has a Compliance Committee with some concerning oversight. After reviewing the evidence, The Bear Cave is left wondering whether LifeStance is a thriving therapy franchise or an illegal billing operation with therapy on the side.
Problems at LifeStance Health aren’t hard to find. The Better Business Bureau has given the company an F rating and issued a current alert concerning a pattern of complaints over “issues when working with the business on correcting billing issues.”
More concerning allegations can be found with state regulators. For example, in a November 2022 complaint filed against LifeStance Health with the Ohio Attorney General, one consumer alleged the company “has been involved in fraud for the majority of this calendar year” and alleged the company regularly signs patients up for unwanted appointments to boost cancellation and no-show fee revenue.
The complaint reads, in full,
“LifeStance Health has been involved in fraud for the majority of this calendar year. The fraud is as follows: The company will schedule an appointment that the patient has not requested. LifeStance Health will then notify the patient 24 hours before the appointment date. When the patient contacts LifeStance Health to cancel the appointment, they will say it is too late to cancel, or will agree to cancel then never actually cancel the appointment. Patient will be charged a no-show fee. LifeStance Health will then refuse to cancel the fee and send to collections. This is done to bring in recognized revenue at no expense to the company. This company is preying off of Americans who are depressed and ill, and are unlikely to sit on hold for hours to dispute. In my personal experience, LifeStance Health has scheduled multiple appointments in this fashion. When I have called to dispute, I have been on hold for over 6 hours at a time. Anybody with a job cannot afford to take 6 hours or more out of their week day on a 24-hour notice to dispute an appointment. If you are successful in taking a day off to dispute the charge, you will still be charged as they will not cancel the appointment. LifeStance Health has stated on their website that you cannot cancel an appointment online, you must call them. This has happened enough times that it cannot be considered a scheduling error or coincidence, this is a meticulous and thought-out fraud.” (Emphasis ours.)
The complaint to the Ohio Attorney General also requested “an Attorney General investigation on the frequency of ‘scheduling errors.’”
In an August 2023 Glassdoor review, a former LifeStance psychiatric nurse practitioner in South Carolina raised similar concerns and wrote: “Clients are billed huge fees erroneously without any resolution from the company... Clients are scheduled for visits they did not make and then are sent a bill for no show.”
Some LifeStance customers have also apparently been charged $150 cancellation fees for appointments that LifeStance cancels. In one complaint to the Texas Attorney General, a consumer writes,