LifeStance Health, a significant provider of mental health services, is facing intense scrutiny over its billing practices. Patients, their families, and even former employees have reported a pattern of issues including errors in insurance verification, improper charges to credit and debit cards for services that should have been covered by health plans, and significant delays in sending claims and bills, sometimes extending months or even years beyond insurer-imposed deadlines. These delays have frequently resulted in patients being asked to pay cash rates, and some accounts have been sent to debt collection agencies.
The company's financial metrics reflect these billing challenges. LifeStance's receivables have surged from $19 million in 2019 to $101 million in 2022. Concurrently, the company's ability to collect these receivables has deteriorated, with days sales outstanding increasing from 16 to 38 within the same period. The accounts receivable turnover has also significantly slowed, from $22.81 million to $9.72 million over the period. LifeStance itself has acknowledged in securities filings that growth in patient receivables or difficulties in collecting these accounts could negatively impact its business, operations, and financial condition.
These billing irregularities raise questions about the accuracy of LifeStance's reported revenue metrics, which account for potential retroactive adjustments from audits and reviews. The situation is drawing attention from various federal departments, including Health and Human Services and the Consumer Financial Protection Bureau. The Biden Administration's broader efforts to alleviate medical debt and enhance consumer protections, particularly given that some LifeStance facilities accept federal health plans like TRICARE, CHAMPVA, Medicare, and Medicaid, suggest that the company's practices may soon face regulatory scrutiny.
