Nobody’s having a longer week than Commure after STAT published a scalding investigation into the company’s growth (at all costs) engine. Turns out it’s a lot easier to be a happy customer when you’re getting paid to be one.
Here’s the backstory. Commure set out in 2020 to build an AI operating system for healthcare that takes power away from payors and hands it back to clinicians.
- CEO Tanay Tandon summed up the Robin Hood pitch on the YC podcast by saying he’d love a world where UnitedHealth’s market cap is a fifth of what it is today, but every doctor is a millionaire.
- Fast forward a few years and $800 million VC dollars (acquisitions are expensive), and Commure’s grown into a $7B juggernaut helping 130+ health systems automate administrative tasks.
Now comes the investigation. STAT revealed that Commure offers large incentives to clinics and other parties that refer its products to new prospects.
- One physical therapy clinic’s contract required it to refer $750k of new business within a year, or face a $66k “referral obligation fee.”
- Affiliate partners earn 2% of any contracts they bring in, so they have plenty of motivation from both carrots and sticks.
- The catch is that STAT found some especially enthusiastic customers that deliver booth testimonials in company quarter-zips, have Commure email addresses, and hang out in internal Slack channels.
That gets shaky when you have mixed reviews. Some customers credit the platform with driving massive collection boosts. Others either “don’t have a positive thing to say about it” or have absolute horror stories.
- The article cites particularly unflattering reviews from a Wyoming rehab clinic that fell $500k behind on collections after handing the keys to Commure, as well as an Arizona FQHC that watched $1M in dental claims get denied without receiving a single notification about the issue.
That could be a problem. Former federal prosecutors told STAT that paying for referrals to products funded by Medicare or Medicaid doesn’t sit well with the anti-kickback statute.
- This isn’t the DOJ’s first rodeo, and some major players have been lassoed into settlements over kickback allegations.
Commure’s response? Everything is fine, and everybody is doing it. The company called its referral practices industry standard, chalked the complaints up to a small minority of customers, and lashed out at STAT for giving readers a distorted view of the business.
The Takeaway
Commure’s internal mantra is apparently “speed above all else,” so maybe a few not-technically-kickbacks are just the cost of doing business. A jury might not see it that way, but then again Commure isn’t on trial (at least not yet).
