LifeStance Health: Vulnerable Mental Health Patients Burdened with Unwarranted Medical Debt from Company’s Billing Practices, Errors, and High Fees

Published on May 19, 2023

In October, the Better Business Bureau submitted a written request to LifeStance Health Group, Inc. (LFST), a publicly traded, private equity-backed company that owns or manages hundreds of outpatient mental health facilities across 33 states, encouraging LifeStance to address a pattern of complaints relating to billing.

The company responded in November, outlining a plan to address the pattern of complaints. LifeStance asserted in its response that the company would provide better customer service and make other improvements; however, a Capitol Forum investigation finds that the billing issues persist and are prevalent across the company’s operations.

“A summary of the written correspondence from Better Business Bureau to LifeStance Health regarding the pattern of complaints is published on the company’s BBB Business Profile,” a spokesperson for the BBB told The Capitol Forum. The spokesperson declined to provide copies of the letters to The Capitol Forum.

In addition to the general chaos that appears to permeate the business resulting in improper, unsubstantiated, and sometimes made-up charges, and potentially dangerous mismanagement of patient care as previously reported by The Capitol Forum, the company also appears to deliberately be imposing unnecessary fees on customers.

For example, one LifeStance facility charges $250 to sign off on a Family and Medical Leave Act request. “I requested medical leave from work due to my mental illness. I printed and took the paperwork to my therapist to complete. LifeStance is charging me $250 for the documents. This is highway robbery at its finest,” a Texas LifeStance patient wrote in a complaint about LifeStance to the Texas Attorney General.

A former employee in a Southeastern state told The Capitol Forum “We had a website that we could see which patients were online and with which doctor. There were a lot of times patients would have trouble logging in or were in the wrong virtual waiting room. If the patient logged in five minutes late and they had a card on file and had signed the authorization to charge, we would automatically charge the card for the late fee of $50.”

“If we saw the patient was in the wrong waiting room, we’d try to call the patient but if they didn’t pick up and stayed in the wrong waiting room, we’d charge them a no-show fee,” she said. LifeStance’s no-show fees range from $50 to $175 for missed appointments, according to a review of several LifeStance facility websites.

And when consumers or their health plans tried to resolve these improper fees or claim processing errors, LifeStance customer support was incredibly hard to reach and often ineffective, according to the company’s patients.

The billing practices at LifeStance may draw regulatory scrutiny amid a series of reforms undertaken by the Biden Administration to alleviate medical debt burden and increase consumer protections, especially since some LifeStance facilities accept federal government health plans, including TRICARE, CHAMPVA, Medicare, and Medicaid. The White House directed several federal departments, including Health and Human Services and the Consumer Financial Protection Bureau, to conduct research about providers’ medical bill debt collection and credit reporting practices, make policy recommendations, and enforce violations of consumer protection laws.

The improper and unsubstantiated nature of some of the company’s bills and fees also raises questions about the company’s own revenue metrics, which “is reported at the amount that reflects the consideration to which we expect to be entitled to in exchange for providing patient care…and include variable consideration for retroactive adjustments due to settlement of audits, reviews and investigations.”

Indeed, the company’s receivables have increased to $101 million in 2022 from $19 million in 2019.  And the company appears to be having a harder time collecting on its receivables, as the days sale outstanding has increased to 38 from 16, over the same period, according to Sentieo, an equities research platform.

The accounts receivable turnover has also slowed to 9.72x from 22.81x over that period, according to Sentieo.

“Growth of patient receivables or deterioration in the ability to collect on these accounts…could have an adverse effect on our business, results of operations and financial condition,” LifeStance says in securities filings.

LifeStance did not respond to a request for comment.

Pattern of complaints. Patients, their family members, and former employees told The Capitol Forum about insurance verification errors and unwarranted charges to patients’ credit and debit cards for services covered by consumers’ health plans. In some cases, LifeStance was months, or even years, behind in sending claims and bills, long past insurer-imposed claim filing deadlines, expecting consumers to pay the bill at cash pay rates. Some consumers said that LifeStance sent their accounts to debt collectors.

The pattern of problematic conduct found as part of The Capitol Forum’s ongoing investigation into the company are echoed in patient complaints submitted to the FTC and the Georgia and Texas attorneys general obtained by The Capitol Forum through Freedom of Information Requests, as well as complaints posted on social media sites, such as Facebook, Google, Yelp, and Twitter.

Customers required to leave cards on file, frequently encounter improper and inexplicable charges. LifeStance requires patients to put a credit or debit card on file and to sign an authorization permitting LifeStance to charge the card for amounts due prior to scheduling the first appointment.

However, patients and their family members told The Capitol Forum that LifeStance repeatedly charges their cards for improper amounts without providing invoices or itemization of the amounts charged. Several complained LifeStance continued to charge their cards even after patients attempted to revoke the authorization to charge their credit or debit card.

In some cases, the amounts LifeStance seeks to charge also differs from the explanation of benefits that are provided to customers.

One patient told The Capitol Forum that after several months of paying a $65 copay for LifeStance therapy sessions, she began seeing $100 charges to her credit card even though there were no changes to her health plan. After emailing LifeStance and waiting “forever for them to get back to me,” eventually a LifeStance billing representative agreed there were overcharges, but there was no resolution, she said. The inexplicable $100 credit card charges continued until she finally left LifeStance for good. The overcharges were never refunded, she said.

One long term patient said she began receiving notices from her bank that LifeStance was attempting to charge her debit card for $101.21 after a January 13 virtual therapy session.

“That was way over my typical copay of $10 or $15,” she said. “I waited hours on the phone trying to speak to someone in billing and it’s almost impossible. I finally spoke to someone who told me LifeStance would resubmit the claim to my insurance.”

“My next step was to call my insurance. They were all baffled by what LifeStance was doing. My insurance said they tried multiple times to reach LifeStance but could not,” she said.

The patient disputed the charge with her bank. However, her dispute was denied because LifeStance responded to the bank with sufficient evidence that the charge was valid.

In addition to the $101.21 charge, the $15 amount this patient was charged for her copay was more than the $10 copay amount indicated on the explanation of benefits.

The family member of another patient told The Capitol Forum that LifeStance charged $240 to the card she had on file for the first appointment without submitting a claim to the family’s health plan. The patient said she only should have been charged a $25 copay, and it took multiple calls and posting of complaints online by the family member before LifeStance issued a refund.

Despite the family member withdrawing authorization for her card to be charged, she said LifeStance again charged her card after the second appointment for $119.70.

That $119.70 was actually her health plan’s total allowable amount, with the plan responsible for $94.70 and the patient responsible for a $25 copay, according to an explanation of benefits from the patient’s health plan provided to The Capitol Forum.

Company also charges high fees for routine processes. In addition to inexplicable and sometimes incorrect bills, patients say they are charged hefty fees for asking LifeStance to fill out disability or medical leave forms, for transferring medical records to a new provider, for being five minutes late logging in to a virtual appointment, and for cancelling less than two business days before a scheduled appointment.

At least one LifeStance facility charges patients $250 to complete medical leave forms that employers required before granting employees federally protected medical leave, according to a LifeStance email a patient attached to a complaint submitted to the Texas Attorney General.

Improper late fees and cancellation fees are sometimes routinely applied to patient accounts and often routinely charged to patients’ cards, patients and former staff told The Capitol Forum.

As detailed above by a former employee in a Southeastern state, the company would routinely add fees for patients who had technological problems or could not log in correctly, including no- show fees.

To avoid the fee, patients were required to cancel two business days before the appointment, which means a Monday appointment requires cancellation by the prior Wednesday.

A new patient booked her first appointment for the following day, then immediately changed her mind and called to cancel within 30 minutes of booking the appointment. Because she cancelled less than two business days before the appointment, she was charged a $175 cancellation fee, according to the review of LifeStance the patient posted on Google Maps to which she attached images of the two debt collection letters she has since received from debt collector Acclaim Credit Technologies. The creditor “responded that you had not cancelled your appointment, and they handled it as a ‘no show,” states one of the letters.

Many patients complained online that they were charged the cancellation fee even when they cancelled before the deadline or even when LifeStance was the party that cancelled the appointment.

 Some patients also said they were unaware weekly appointments had been scheduled until after being charged a no-show fee. “They charge $175 per missed appointment yet make it impossible for you to cancel an appointment,” wrote a Google Maps reviewer of LifeStance two months ago after calling three times and waiting on hold for over two hours each time only to be disconnected. “PLEASE CANCEL MY UPCOMING APPOINTMENTS I DIDN’T ASK TO BE SIGNED UP FOR,” she wrote.

Former employees recount phantom balances that would appear on customer’s accounts for services rendered years ago. A former employee who worked in a Central Southeastern state recounted how she spent an inordinate amount of time fixing patients’ accounts, including constantly addressing thousands of dollars that would inexplicably appear on patient’s balances.

 “I remember one of our self-pay patients. I told her, ‘Your balance is $250.’ Well, two weeks later she has a balance of $1,094,” she said.

“Balances would just show up,” she continued. “The system shows they owe $3,900 but they didn’t last week when I checked the account. We’re told, ‘It’s because billing is behind in posting. They’re behind in this, they’re behind in that.’ But those balances were from 2019 and 2021,” she said.

“Nothing ran smoothly at LifeStance. Every day is chaos, not just for me, but for the patients too,” she said.

A South Atlantic region former employee explained that she too saw patient balances suddenly balloon by thousands of dollars beginning in April 2023.

LifeStance sent some of these patients alarming text messages about having huge balances on their accounts, she said. “I remember the phones went crazy with patients calling us, saying ‘I haven’t been a patient there since 2017 and I just received a text message from LifeStance that says I owe $1,000 to LifeStance!’, the former South Atlantic employee said.

“We didn’t know what happened until the end of the day when we were told ‘Someone in billing messed up.’ The managers were calling us to do overtime to fix the accounts. There were people in offices around the state fixing accounts,” she explained.

“I was fixing accounts for people attending court ordered treatment sessions because those patients were all freaking out that they would be in legal trouble because their accounts showed an unpaid balance for their court ordered treatment sessions. I’d say 90% of the group were actually all paid up. I had to fix the accounts one by one to show a zero balance,” she said.

In some cases, the codes appeared to be made up, she said. “A lot of billing codes with dates from years ago had been applied to the chart.” Most of those codes appeared invalid and the source was able to differentiate between the two, saying “most of the real codes started with the letter C or D and the fake codes started with R or no letter at all.”

Another former administrative employee who worked remotely from her New England home processing claims for LifeStance facilities across 10 states told The Capitol Forum, “Last fall after a manager left, it was discovered that there were millions of dollars in claims that hadn’t been posted. So our locations were in the red, and that was going to cause us to get a severely reduced bonus or no bonus at all. And we got a lot smaller raise too.”

Understaffing and failure to verify insurance could be contributing to billing issues, inability to provide patients with accurate estimates. Three former in-office employees said that they heard patients complain daily about problems involving overcharges posted to their LifeStance accounts, the lack of itemization of charges, and erroneous claims LifeStance had filed with health plans.

“Often the LifeStance insurance department wasn’t actually verifying the insurance in the chart,” a former administrative employee who worked in a LifeStance office in the Central Southeast said.

“Most of the time, patients would be seen for two, three, four months and the insurance hadn’t been verified yet, so we didn’t know what copay or deductible to charge,” she said, adding that new patients would have several appointments every month and what they owed would accrue.

The company was so short staffed, sometimes the correct insurance information didn’t even make it into the system, she said.

For example, the system would show the name of one insurer, “but guess what, they’d mess up the specific type of plan,” she said. “United would be entered, but it was really a Medicaid plan managed by United and our office didn’t take Medicaid,” said the former Central Southeast employee.

She estimated about 90% of accounts had some billing or insurance problem. “We’d collect the wrong copay or didn’t know we should be collecting a deductible, or we’d bill under the wrong provider ID or bill the wrong insurer or not bill insurance at all.”

“No one really knows what they are doing,” she opined. “It’s a hot mess.”

Without insurance verification, the company couldn’t give good faith estimates of how much treatment would cost.

Patients are instructed to call their insurance company to figure out what they’ll owe for treatment, former patients and staff said.

“LifeStance doesn’t give good faith estimates to patients,” said the former Central Southeast employee.

For uninsured patients, providers and facilities are required under the No Surprises Act to provide good faith estimates of charges upon scheduling care and are required to create a patient-provider dispute resolution process for patients to contest charges that are substantially in excess of the good faith estimate.

The former South Atlantic region employee concurred. “We weren’t able to say how much an appointment was going to be. For self-pay patients it was really complicated. When I started, self-pay rates were $100 or $150, if I’m not mistaken. By the time I left last summer, self-pay rates were between $400 and $900.

According to online complaints, LifeStance’s inability to provide estimates is not limited to self-pay patients.

Patients and payers face long hold times and difficulty in speaking with LifeStance when trying to resolve billing issues.  Almost every patient and former employee who spoke to The Capitol Forum, as well as many of the consumers who posted complaints online, point out the long hold times they experienced when calling LifeStance.

Two Capitol Forum employees called LifeStance customer service numbers last week. Both calls were automatically placed into a queue. The recorded message on one call repeatedly said the call was “first in line” for one hour and 30 minutes, after which the call was disconnected. The other Capitol Forum call was answered by a recorded message that repeatedly stated that call was “second in line.” After a one hour and 45-minute hold, that call was automatically transferred to voice mail.

The Capitol Forum at 3:30pm on a weekday called a billing number printed on a Michigan LifeStance invoice.

The call was immediately answered by an automated system that played the following message, “Thank you for calling. We are sorry we missed your call. Our billing department is currently closed. Please call back during our normal office hours.”

One of the former LifeStance office employees shared a picture she had taken of her system showing very long hold times on what she described as a “typical day.”