“They Talk the Talk, Then Cut Your Pay”: What Therapists Are Saying About Lyra Health in 2025
A Wake-Up Call from the Front Lines
When Lyra came on the scene in 2015, many therapists raved about it. Decent W-2 positions, a great way to bring on some EAP clients to fill in a private pay practice with 1099 positions. Therapists were referring their colleagues often.
But it has been 10 years. And Lyra Health has raised over 900 million dollars in funding from venture capital, and things are changing.
Therapists are starting to talk, really talk, about what it’s like working with Lyra Health in 2025. Once seen as a safer, easier way to fill in or build a caseload, many are now feeling burned out, betrayed, and back at square one.
“Well, I knew I was on borrowed time relying on Lyra, and just as I feared, they’re going the same route as all the other tech companies trying to run mental health care.”
Lyra promised flexibility, support, and values-driven care. But many therapists are now wondering: at what cost?
When the promises fall flat, you’re left holding the emotional weight of your clients, the financial strain of a broken system, and the silent grief of being misled again.
These stories aren’t outliers that are specific to Lyra. They’re a warning.
This article is about what’s happening with Lyra. More importantly, it is about what you can do about it.
What Therapists Are Experiencing Right Now
Many therapists joined Lyra with hope: a way to get steady referrals, avoid marketing, and support people who might not otherwise afford care.
But reality has not matched the promise:
“They sent an email saying the reason we aren’t getting referrals is that we’re charging more than others in the network. Then they offered to lower my rate to get referrals again. Obviously, my response is F U.”
“I’ve literally helped keep people in their jobs. Like, how much money would the company have lost if those clients had quit? Versus paying my piddly fee for a few sessions.”
Another therapist shared privately:
“Some of my clients wait for their benefits to reset just to see me. They stretch sessions out monthly, biweekly, and still show up grateful. And now? Now I’m being told I cost too much. I’m livid and heartbroken at the same time.”
From Reddit:
“They raised the expectation from 24 to 30 clients a week. We’re required to assign homework, track it, and still do risk assessments that don’t count toward our caseloads. And now they rolled out AI note-taking tools that listen to sessions. We can't opt out.”
The quotes go on.
Burnout. Surveillance. Shifting metrics. Devalued expertise. Therapists are being used to fulfill growth quotas, not care standards. The emotional toll of this bait-and-switch is real.
“It’s not just the workload. It’s the psychological whiplash of being told you matter, and then being treated like you don’t.”
What’s Really Happening Behind the Curtain of Lyra and VC-Backed Companies?
Let’s talk venture capital.
Lyra has raised over $900 million in several rounds of funding. These millions come from investors expecting a high return. That means:
Growth must be fast
Costs must stay low
Services must scale quickly
Therapists are the product at this point. Your sessions create the value that sells this service to corporate clients. And once enough clinicians and companies are on board, services are “optimized.” Which is a euphemism for cut.
“It has become clear this company is in the process of enshittification...”
This isn’t accidental. It’s the business model that has been modeled over and over again for venture capital-based companies.
Quick VC 101 for Therapists
Startups trade equity for cash
That cash comes with strings: growth, profit, scale
If a company doesn’t show ROI, they get cut off
Employees and contractors are where cuts happen fastest
According to Forbes about “80% of VC-funded ventures are estimated to fail”
To keep the doors open, they have to make the finances make sense.
The money they used to recruit and pay you can dry up overnight.
Doors can close without warning and access to logins (and your client’s care) can be stop without warning.
The longer VC businesses exist, the more they appear to shift toward profits. Why? Because they need to pay the bills and create a functioning business. They have high overheard for all that marketing, investor payback, executive leadership, etc. So, what is left as a lever they can turn?
Raise caseloads
Cut pay
Outsourcing labor to AI
Reducing therapist autonomy
Using what they’ve learned to create TECHNOLOGY that doesn’t require your labor.
What about when you burn out or push back?
There’s a new cohort ready to take your place. VC backed companies are constantly texting, sending LinkedIn messages, sponsoring posts on social media, etc. They have a LOT of money to recruit you, but do they have the business plan to retain you?
Ultimately, most venture capital based companies can’t focus on the quality of your care. They have to focus on scalability and profitability to keep the doors open.
Wait, Side Note: What do you mean by: Using what they’ve learned to create TECHNOLOGY that doesn’t require your labor.
This was posted last week in a Facebook group. We are working on getting more details and seeing if this person or their very connected person will agree to be interviewed at least anonymously:
“I have a very connected person who said part of the reason Kaiser ended the strike is they are funding Rula and Grow to build them an AI therapist. I saw the initial prototype, and wow, I couldn't tell you which was AI therapist and which was the real therapist, other than the real therapist seemed to stumble over their words a couple of times, so knew that must be human. He predicts in 2-5 years Alma, Headway, Grow, and Rula will join forces go to all insurance companies, and offer the AI therapist for 1/3, and insurance companies guarantee will take it.”
Sound far-fetched? Check out this article about a clinical trial for AI Therapists.
Companies that are using AI to listen to help you write your notes, ensure quality of care, also have an opportunity to train AI Models or Therapists on assessing and responding to clients. “Participants with depression experienced a 51% reduction in symptoms, the best result in the study. Those with anxiety experienced a 31% reduction. These results, Jacobson says, are about what one finds in randomized control trials of psychotherapy with 16 hours of human-provided treatment, but the Therabot trial accomplished it in about half the time. ‘I’ve been working in digital therapeutics for a long time, and I’ve never seen levels of engagement that are prolonged and sustained at this level,’ he says.” Technology Review 2025. Oof.
So, is this what is happening with Lyra?
You be the judge. Here are some quotes from therapists:
"Hey all, I am a Lyra contracted therapist (1099). Overall, they’re very good, but I’ve found a sharp decrease in referrals in the last 2-3 months, as have some colleagues who report the same thing. Like, from abundant to zero.”
They straight up told me they’re not showing my profile directly to their members because my rate is higher than others in the network in my area, and to let them know if I was interested in lowering my rate*. Yet they agreed to these rates in 2021, no less. 😒 Feels like someone isn’t holding up their part of the bargain (ahem, contract) here.
EXACTLY the same! It took a while to get an answer, but when I finally did, my result was the same. I had been with them for 3.5 years, and they offered me my rate after seeking me out. I'm frustrated by this. It seems that my expertise, experience, etc., were initially valued, but now they are more focused on decreasing their rate, which is likely using more of their ‘Blended Care’ therapists, and they have even more control over them.
“Same, they sent me an email early June 2024 with the heading "Changes to Referral Volume." The email indicated that they were conducting a "thorough review of our provider rates in comparison to the network averages. A primary factor that influences a provider’s referral volume is their cost per session. Our analysis indicates that the rates for the provider listed is significantly higher than the network average, which may impact their referral volume." It then went on to say that because Lyra is "entering markets that are more cost-conscious a shift in market needs has made it necessary for Lyra to adjust our approach to managing referrals and provider rates to maximize value for our customers and ensure ongoing access to care." They followed up with saying that I could maintain at my current "exclusive" rates, but basically would not be getting additional referrals. I reached out to them, and they responded by asking me to take about a 20% pay cut to continue to get referrals. I haven't decided what I'm going to do yet.”
Your Clients Put Extreme Trust In You
Here’s what doesn’t get talked about enough: liability and trust. When you are hired as a 1099 contractor with Lyra or any other company, you are signing a BAA that says how you will keep clients’ data safe as a contractor. Do you deeply understand HIPAA compliance and how to keep you and your client’s data safe? Are the platforms safe?
Lyra requires therapists to use company-designed tech tools, like AI note-takers, digital scheduling, and internal messaging systems. But when a HIPAA breach occurs or a glitch causes a clinical error, guess who holds the bag?
You do. Your clients are ultimately trusting that YOU, as the licensed, expert professional, understand how to keep their data safe and have vetted that you are working for a trustworthy company, and you trust their technology.
Some therapists are unknowingly signing contracts that shift the legal and compliance burden directly onto them. Therapists may assume Lyra is legally responsible for the tech it mandates. But read the fine print: you may be waiving your rights or accepting responsibility for tools you didn’t even choose.
Informed consent, client privacy, data storage, and risk documentation are all areas where you might be more exposed than you think.
Are Online Tech Companies Pivoting?
The Hidden Bias in the Therapy World
Therapists often assume the world works like they do: with care, ethics, and empathy. But Lyra wasn’t founded by therapists. It was co-founded by the former CFO of Facebook and an MD.
And many therapists believe that outsourcing business tasks to Lyra is ‘safe.’ But what is it costing you?
Your autonomy
Your long-term sustainability
Your client relationships
Your ability to leave
Maybe your intellectual property
Sometimes the desire to avoid discomfort leads us to make choices that compromise our freedom.
This is not just a business problem. It’s an emotional one. We’re taught to value service over self. We’re taught to put clients first. But in systems like these, that sacrifice is used against us.
"Yes the company definitely feels very different in even the two years since I started. Are you planning to stay on through the new changes? I was hopeful they might make changes based on widespread feedback, but it doesn’t seem likely at this point."
Action Steps to Build a Rock-Solid Practice
This isn’t about shame or fear. It’s about taking back your power.
✅ 1. Know Your Math
Calculate your actual hourly rate after taxes, admin, no-shows, and platform cuts
Understand the rates for different sorts of client contacts
Calculate how much unpaid labor is involved outside of your traditional time with clients including documentation, responses, etc.
How many clients do you need at what rate to live well?
Stop guessing. Numbers are clear.
✅ 2. Read Every Contract Carefully
Do they own your client data?
Are they allowed to create profiles for you?
Are you allowed to review, revise, or confirm that they are advertising you accurately. Hot tip: YOU are ultimately responsible for any advertising done, even by employers in most ethical and legal codes.
Can they change your rate at any time?
Are you liable for their tech or processes?
If the answer isn’t clear, don’t sign until it is.
What is in the agreement regarding the use fo the data that it collects?
What are the regulations regarding the use of AI?
✅ 3. Understand the 1099 vs. W2 Reality
1099 = you owe self-employment tax, and you get no benefits
1099 = you are a business owner. Employee protections, including overtime, underpaid time, etc. do not apply to you.
1099 means you plan for sick time, vacation, retirement, expenses, training because Lyra isn’t going to do it for you
1099 pay is not the same as w-2 pay. In other words, 30% more pay as a contractor might just barely be equal to a w-2 position paying 30% less.
✅ 4. Examine What You’re Outsourcing
Are you outsourcing your marketing out of fear or preference?
What would it take to build those skills yourself?
Are you trusting someone else with your reputation, visibility, and income?
Are you trusting that this contract and relationship will work forever?
What would be signs and metrics that would tell you it is time to look elsewhere?
✅ 5. Invest in Skill Building That Sets You Free
Learn how to set and raise fees
As a 1099 contractor you are a business owner- learn the skills you need as a business owner.
Learn ethical, effective marketing
Create referral networks
Strengthen your clinical niche
Learn the basics of SEO, messaging, and conversion
You do not need to become a social media influencer or hustle 24/7. You just need foundational knowledge.
You Are the Value
You’re not being used because you’re disposable. You’re being used because your labor is invaluable.
But the people building these platforms aren’t always showing you that value. They’re extracting it.
You have a choice. You can learn the skills to build a sustainable, ethical, client-centered practice where you call the shots.
You are the brand. You are the value. And you deserve better than bait-and-switch business models.
Let this be the last time a platform cuts your pay and calls it a favor.
Want a Clear, Sustainable Path to Setting Fees That Work?
Join our free training: How to Set Fees Without Guilt or Guesswork
Earn 1 CE (approved for many boards)
Includes actionable worksheet + formulas
Feel confident knowing your numbers and valuing your time
Because the most ethical thing you can do for your clients is build a practice you can sustain.
