The U.S. government has sued several telehealth companies and executives for alleged unfair and deceptive practices.
The amended complaint names telehealth companies Cerebral; Zealthy (aka Gronk) and its affiliate medical corporation, Bruno Health; Cerebral founder and former CEO Kyle Robertson; former Cerebral leader Alex Martelli; and Zealthy executive German Echeverry, MD, the Justice Department and Federal Trade Commission said June 10. The allegations include tracking and transmitting patients' data to third parties for targeted advertising without informed consent, misrepresenting cancellation practices, and misleading consumers about subscription policies.
"The Justice Department is committed to stopping companies and their executives from mishandling and misusing individuals' sensitive personal health information, and from implementing predatory billing practices," stated Brian Boynton, principal deputy assistant attorney and head of the Justice Department's Civil Division. "Consumers who turn to telehealth companies for treatment expect that their sensitive health information will be handled with great care and that companies will abide by the representations they have made rather than flouting their stated policies for the sake of profits and growth."
The U.S. has agreed to a settlement with Cerebral, a virtual behavioral health startup, for $5 million in consumer redress and a civil penalty judgment of $10 million, of which $8 million is suspended because of a limited ability to pay.
"Cerebral reached a settlement with the Federal Trade Commission to close its investigation into the company," a Cerebral spokesperson told Becker's in an emailed statement. "This settlement is not impacted by the Department of Justice's amended complaint stating new allegations against former employees. Cerebral was transparent and fully cooperative throughout the FTC's investigation and remains committed to providing excellent care for our valued patients while upholding the highest standards of customer service, data protection and privacy.
"Kyle Robertson has not been with the company since 2022, and we have no comment on the charges against him."
Becker's also reached out to Zealthy and the executives for comment.