The Federal Trade Commission has begun an investigation into San Francisco-based Cerebral, The Wall Street Journal reported June 15.
The Journal cited a letter it reviewed that was sent from the federal agency to the teletherapy and medication management startup.
The letter, dated June 1, said the investigation is related to whether Cerebral engaged in deceptive or unfair practices when advertising its services.
The company must preserve any relevant documents and answer several questions regarding business operations. Specifically, the agency is looking for more information about "negative option programs," or the practice of a company billing customers for a subscription unless that customer explicitly denies the service.
Cerebral told the Journal it plans to fully cooperate with the FTC investigation and that it recently took steps to redesign its cancellation process.
The investigation was initiated one week before Aetna reportedly canceled its in-network contract with Cerebral, effective Aug. 21. Days later, UnitedHealth Group's Optum confirmed it would also be cutting ties with the company.
Aetna's parent company, CVS Health, and Walmart said in May they would stop filling prescriptions for controlled dangerous substances for Cerebral patients, according to the Journal.
Cerebral received a federal subpoena May 4 related to possible violations of the Controlled Substances Act, which regulates the prescribing of medications that have potential for abuse and dependence, including stimulants and benzodiazepines. Cerebral confirmed to Becker's on June 2 that it will initiate layoffs amid the federal probe.