A Healthtech Unicorn Leaves a Trail of Clinic Complaints, Concerns Over Billing Practices
Athelas boasts a $6 billion valuation after a recent merger with another healthtech startup. But former employees have raised questions about its billing practices in the past, and some of its clinic customers suffered cash flow problems after switching to an Athelas product last year.
Early last year, salespeople from a health tech startup, Athelas, gave Rich Schlauch a pitch he couldn’t resist.
The salespeople told Schlauch, who runs a behavioral health clinic in South Carolina, that he could increase his practice’s revenue by at least 15% and submit insurance claims faster using Athelas’ new billing software, which employs artificial intelligence and other cutting-edge technologies, Schlauch said. His clinic was doing well at the time—he didn’t have enough staff to handle the surge in demand for mental health services it had seen since the pandemic—but he found the Athelas pitch compelling. He moved the billing operations for his clinic, Palmetto Counseling and Consulting Services, onto Athelas’ system in early spring, and went live with the new setup in May.
Instead of seeing a jump in revenue, though, Schlauch said his clinic soon faced financial ruin. In the weeks after Palmetto began using Athelas’ software, his practice stopped receiving payments from insurers for the counseling services it had provided patients, even though the daily patient load for his team of counselors hadn’t changed. “No billing went out for almost two months,” said Schlauch. “I’ve never seen anything like this in all my career.”