Health insurer Aetna is canceling its network contract with Cerebral in August, the mental health startup CEO told employees on Wednesday.
“We have received notice from Aetna of its decision to terminate our provider agreement without cause and discontinue coverage of brain services, effective August 21, 2022,” wrote Cerebral CEO David Mou, who held previously the position of chief medical officer of the company, in a message to employees. “We are still seeking an explanation for Aetna’s decision.”
Cerebral, valued at $4.8 billion after a $300 million funding round led by SoftBank last year, is under investigation by the Department of Justice over its prescribing of controlled hazardous substances, including including stimulants such as Adderall. Co-founder and CEO Kyle Robertson was ousted by the board last month and employees are bracing for a series of layoffs.
Cerebral was considered a network with Aetna in 45 states, according to a list posted on the company’s website. “We are very disappointed with Aetna’s decision,” Mou wrote, adding that 50% of the more than 1,000 Aetna members diagnosed with serious mental illness showed “significant clinical improvement” during their treatment with Cerebral. He added that he hoped Aetna would “reconsider its decision”.
A Cerebral spokesperson confirmed Aetna’s termination notice. Aetna did not immediately respond to a request for comment.
On May 4, Cerebral received a subpoena from the U.S. Attorney’s Office for the Eastern District of New York regarding “possible violations of the Controlled Substances Act.” Federal law regulates the prescription of drugs that have the potential for abuse and addiction, including stimulants and benzodiazepines. A Cerebral spokesperson previously said the company “continues to cooperate with the DOJ in this investigation.”
Aetna’s parent company, CVS Health, told the Wall Street Journal it would stop filling prescriptions for controlled hazardous substances for brain patients last month. A Cerebral spokesperson confirmed that CVS Health, Walmart and online pharmacy Truepill have all stopped filling these prescriptions for Cerebral patients.
Last week, Mou told employees at Cerebral that the planned layoffs at the company were unrelated to issues surrounding the prescription of controlled hazardous substances. “The business is in good shape,” he said at an employee town hall. “We are in an economic downturn and therefore all companies must necessarily be more conservative.”