Cerebral set to pay $7M for alleged patient data sharing | Brief news

Cerebral was ordered to pay $5 million in consumer relief and a $10 million civil penalty, which was suspended at $2 million due to the company's limited ability to pay, it announced Monday the DOJ in a press release.

The order, pending approval by the U.S. District Court for the Southern District of Florida, requires the company to stop misusing and inappropriately disclosing patient information, misrepresenting its practices regarding privacy or data security and misrepresent its cancellation practices.

The details: In February 2023, a bipartisan group of senators sent letters to three telehealth companies, including Cerebral, denouncing allegations of tracking and sharing patients' personally identifiable health information with advertisers.

The DOJ and FTC alleged that Cerebral violated the FTC Act, the Opioid Act, and the Restore Online Shoppers' Confidence Act (ROSCA) in connection with its misuse of patients' sensitive personal health information; failure to keep this information private and secure; and the use of “deceptive, cumbersome, and convoluted cancellation practices.”

In May 2022, the company's former CEO, Kyle Robertson, allegedly continued to violate the FTC and ROSCA after leaving Cerebral to start a new company called Zealthy, later renamed Gronk, and its subsidiary Bruno Health PA.

In a concurrent action, the DOJ filed an amended complaint against Zealthy, Gronk, Bruno Health, and associated officers for alleged violations of the FTC Act and ROSCA.

Compliance Considerations: In April, Cerebral announced a settlement with the FTC, which required it to “implement enhanced consumer protection, privacy and compliance measures” to further protect its customers' personal information.

The DOJ said it will continue to impose civil penalties, injunctive relief and monetary measures against Robertson, Bruno Health, Zealthy and other executives.

Company response: In an emailed statement, a Cerebral spokesperson said the company was “transparent and fully cooperative throughout the FTC's investigation and remains committed to providing excellent care to our valued patients throughout.” adhering to the highest standards of customer service, data protection and confidentiality.”

The company has made no comment regarding the accusations against Robinson. Zealthy did not immediately respond to a request for comment.