Pushing ADHD telehealth prescriptions costs Cerebral millions

Embattled telemental healthcare provider Cerebral has agreed to pay $3.6 million to the United States for its business practices that encouraged the unauthorized distribution of controlled substances.

The direct-to-consumer company signed a non-prosecution agreement with the U.S. Attorney's Office for the Eastern District of New York, agreeing to forfeit $3.65 million. The agreement also requires Cerebral to pay a fine of $2.92 million, which the U.S. Attorney's Office has determined that Cerebral cannot currently pay. The fine will be deferred for the 30-month term of the agreement and waived once it expires if Cerebral complies with the agreement. Further, the agreement requires Cerebral to continue cooperating with and providing information to the United States.

Cerebral provides telehealth consultations for mental health conditions and virtual prescriptions for various medications, including controlled substances, like Adderall for attention-deficit/hyperactivity disorder (ADHD). The company's revenue comes from tiered monthly subscription plans.

According to the U.S. Attorney's Office, Cerebral employed various business practices between February 2021 and October 2022 to increase medication prescriptions and, thereby, patient retention and revenue.

The company monitored medication prescription rates using two metrics: the Initial Visit Rx Rate, which is the number of prescriptions issued to patients who enrolled in a medication management subscription plan after their first telehealth visit, and the ADHD Stimulant Rx Metric, which is the number of stimulants prescribed to patients diagnosed with ADHD who had no comorbidities.

The U.S. Attorney's Office stated that Cerebral sought to increase the Initial Visit Rx Rate to 95% between May 2021 and May 2022. The company implemented various strategies to boost the rate, such as regularly reviewing providers' individual Initial Visit Rx Rate and implementing a bonus structure for supervisors.

From around October 2021, Cerebral instituted an internal plan to increase the ADHD Stimulant Rx Metric to 100% that included auditing its providers' ADHD prescription practices and considering disciplinary measures, the U.S. Attorney's Office noted.

Additionally, the U.S. Attorney's Office stated that Cerebral provided financial incentives to providers for issuing stimulant medication for ADHD patients and did not maintain adequate controls against drug diversion.

The U.S. Attorney's Office reached the non-prosecution agreement after Cerebral took several remedial measures beginning in May 2022, including terminating its CEO, eliminating the use of the above prescription metrics and enhancing compliance measures.

"Today's settlement holds Cerebral responsible for their failure to protect patients from the harms caused by the unnecessary or overprescribing of potentially addictive ADHD medications," said Anne Milgram, administrator of the U.S. Drug Enforcement Administration (DEA), in a press release. "Cerebral's exploitation of telemedicine flexibilities deceived patients who were legitimately seeking medical care, putting them at risk in exchange for profit. DEA remains committed to telemedicine accessibility that supports the health of all patients while also ensuring that telemedicine companies and practitioners prioritize patient health and safety above all else."

Future of telehealth prescription flexibilities remains uncertain

The agreement comes as healthcare stakeholders wait for the DEA's decision on telehealth prescribing flexibilities for controlled substances.

During the COVID-19 pandemic, the DEA began allowing healthcare practitioners to provide virtual prescriptions for controlled substances without first conducting at least one in-person medical evaluation of the patient. In early 2023, the agency released a proposal that would reinstate the requirement for certain medications, including Schedule II controlled substances like Adderall and Ritalin.

The healthcare industry pushed back, urging the DEA to permanently waive the requirement. The agency eventually extended the waiver through the end of 2024. Though official word of whether the waiver will be extended once again is yet to come, the Office of Management and Budget received a final rule to review on Oct. 10, 2024, indicating the agency intends to extend it. However, the length of the extension is unclear.

Anuja Vaidya has covered the healthcare industry since 2012. She currently covers the virtual healthcare landscape, including telehealth, remote patient monitoring and digital therapeutics.