The Silicon Valley technology company set out in 2020 to build a new operating system for health care. Its executives began to cast the company as a kind of Robin Hood: It would leverage artificial intelligence to take power and money from massive insurers and other industry giants — and give it back to doctors.

“I would love a world where the market cap of a UnitedHealth is a fifth, but every doctor is a millionaire,” Commure CEO Tanay Tandon said in a recent interview with Y Combinator, an investor in the company, currently valued at $7 billion.

But Commure isn’t just promising to fatten doctors’ wallets with money from insurers. For those willing to talk up its AI, it also offers to kick in compensation of its own.

A STAT investigation found the company offers thousands of dollars, in various forms, to medical clinics and other parties who refer its products to new business prospects. The compensation is part of a strategy to swiftly sell AI tools it says can unburden clinicians burned out by health care’s endless bureaucratic morass.

Based in Mountain View, Calif., Commure is among the most ambitious and all-encompassing efforts to automate the administrative tasks that underlie these businesses. Many of its customers speak of the company in heroic terms. In marketing videos and podcast interviews, they testify that its products for billing, scheduling, and clinical documentation have restored joy, and reliable revenue, to their practices. The company claims its tools are used by more than 500 health care organizations across the country, including “130 of the nation’s largest health systems,” such as for-profit giants HCA Healthcare and Tenet Healthcare.

But the story of Commure is not one of unbridled success. Its quest to rapidly disseminate its technology has been marked by embarrassing stumbles and legal skirmishes. Some vendors and onetime business partners accuse the company of copying their products and cutting them out of profits and payments. Meanwhile, the money at stake in some of its referral arrangements with medical clinics and other individuals — in one case as much as $66,000, according to internal documents — is tied to the act of convincing peers to buy Commure’s products.

STAT’s investigation offers a rare window into the messy realities of rapidly selling newly developed AI tools into disparate clinical settings, where opaque technology mixes with financial incentives written into private contracts with select customers.

Referral programs are common in the health technology industry, but they can also run afoul of a federal anti-kickback law that prohibits anyone from paying for referrals to products or services funded by government programs like Medicare and Medicaid.

Beyond their questionable legality, the offers of compensation have created potential conflicts and confusion about the ability of its software to perform in different clinical settings. Reviews from its customers are decidedly mixed.

Matt Ernst, director of operations at Oxford Physical Therapy Centers near Cincinnati, said veteran therapists in his clinics have called the company’s AI scribe “revolutionary” and credited its billing software for significantly increasing collections. “Their rollout was super smooth,” Ernst said.

But Tom Fiel, a physician who bought the company’s technology to handle billing for his Arizona sports and family medicine clinic, only to see a precipitous drop in revenue, offered a withering assessment.

“It’s horrible — horrible service,” he told STAT. “I don’t have a positive thing to say about it.” Fiel’s collections were so bad after switching to Commure that he went without a paycheck for 10 pay periods in a row, he said.

Commure declined to make its executives available for an on-record interview. In a background conversation — from which shared information could not be attributed to a specific individual — and written responses, the company asserted the vast majority of its customers are happy with its products. The unhappy clients that STAT highlighted are a small minority, Commure emphasized, noting that it has owned up to its failures by giving them discounts or not charging them. The company described its marketing and referral practices as industry standard. Its statement concluded, “STAT is giving its readers a distorted and inaccurate view of our company.”

STAT’s investigation is based on more than three dozen interviews with ex-employees, business partners, and current and former customers. Reporters also spoke with employees of rival businesses and reviewed legal filings, internal communications, and customer contracts. Many former employees, onetime customers, and business partners asked for anonymity out of fear of legal or professional repercussions.

Commure has raised over $850 million to transform healthcare

Company fundraising rounds, according to Pitchbook

Table: Brittany Trang | STAT • Source: Pitchbook

Commure has raised more than $850 million to pursue its mission from a who’s who of venture capital investors now helping to steer its business. General Catalyst, one of the largest venture capital firms in the world with more than $43 billion invested in companies like Anthropic, Stripe, Canva, and Airbnb, has participated in multiple funding rounds. Other backers include Sequoia Capital, Morgan Stanley, and 8VC.

Instead of a single company built from the ground up, Commure is an agglomeration of businesses acquired over several years. Its assemblage of technologies, while aimed at health care’s administrative layer, are also engaged in safety-critical tasks, such as sending alerts when a clinician feels threatened.

Among its biggest deals was a 2023 merger with a software company called Athelas. Tandon, who became CEO of the combined company, founded Athelas at age 18 with his high school science fair rival, Deepika Bodapati. In 2016, he dropped out of Stanford to pursue the business full time. Athelas was initially focused on blood testing and gained FDA clearance for a product that analyzes white blood cell counts and neutrophils from a finger-stick drop of blood. The company’s growth potential was limited, however, because its device served a relatively small market of immunosuppressed patients.

Commure has assembled various technologies to build its AI operating system for health care

Known Commure acquisitions of health tech companies

Table: Brittany Trang and Casey Ross, STAT • Source: Legal documents, press releases

After various iterations, Athelas pivoted to a much bigger opportunity to use AI to automate medical billing and help doctors fight denials from health insurers. The company began to focus on establishing a national customer base that would help expand its revenue and challenge entrenched businesses blamed for turning U.S. health care into a byzantine administrative state.

To get that kind of buy-in, Athelas would need to establish that it could reliably automate high-stakes transactions for medical clinics and deliver consistent results. Tandon also placed special emphasis on another core value for the company, one that became something of a commandment within its ranks:

“Speed above all else.”

The need for speed

During internal meetings, Tandon implored staffers to work with a sense of urgency, according to four former employees who attended the gatherings. “That was hammered, hammered, hammered through our heads,” one of the ex-employees recalled. “Speed above all else. Speed, speed, speed.”

The company established a sales operation near Salt Lake City, where a core group of physical therapists took charge of its strategy for attracting new customers. They instructed employees to canvas large geographic areas across the country, going door to door to pitch the company’s AI tools.

Kirk Ehinger, a former Athelas sales associate, recalled canvassing in Jacksonville, Fla., with another employee who ventured into the corridors of an orthopedic practice to try to get face time with a practice administrator. “He waited outside the door for like a half an hour and just kept on pressing him over and over for an appointment,” Ehinger recalled. “The guy’s like, ‘That’s not our process.’”

Ehinger said the high-pressure tactics “didn’t get a great reception” at times but were part of a strategy to build buzz and break into new markets. He said the company’s top executives, Tandon and Bodapati, spoke of a big payday on the horizon, through a potential public stock offering. In staff meetings, he said, they invoked Silicon Valley’s greatest success stories, such as Google and Uber, suggesting Athelas was next in line. “They’re so blinded by the potential of going public that they’re just going a thousand miles an hour, and I don’t think they are building it the correct way,” said Ehinger, who said he was terminated for failing to meet sales goals.

A company executive who was not authorized to speak publicly said the company’s focus on speed reflects its belief that change is urgently needed to address administrative burdens imposed by health insurers and industry giants such as Epic, the nation’s largest electronic health record vendor. “Yes, we move quickly, but we don’t move recklessly,” the executive said.

As Athelas sought to ramp up sales, it collected testimonials from early customers who spoke of how the company’s technology had helped cut through red tape and increased their collections. In his interview with Y Combinator, Tandon said getting providers to speak about their revenue gains was “the most potent word of mouth in the world.”

It was also a form of promotion the company was willing to pay for.

Paying for referrals

As soon as he signed on the Docusign line, Josh Adams, chief operating officer of Modern Physical Therapy and Sports Medicine, became more than just an Athelas customer. He was also on the hook to generate sales — and he instantly had a quota to hit.

Under his contract, Adams agreed to refer $750,000 in new business to the company within a year. If he failed to meet that threshold, his Arizona clinic could be charged a $66,000 “referral obligation fee,” according to a copy of the document obtained by STAT.

Two former federal prosecutors said the contract language, described by a STAT reporter, could be legally problematic under the federal anti-kickback law.

“You can’t pay — or refrain from charging for a service provided — to induce a referral,” said Gregg Shapiro, a former Justice Department prosecutor who spearheaded investigations into health technology companies accused of violating the anti-kickback law. One of his team’s investigations led to an $18 million settlement in 2021 with the electronic health record vendor Athenahealth, which allegedly paid thousands of dollars in illegal fees to customers for a lead generation program designed to identify new customers.

Athelas said in a statement that the custom referral provision was only employed in this one contract with Modern Physical Therapy, and that it “was never implemented or utilized by Athelas and Modern PT.”

“In the year it has been in effect, Modern PT has referred no business to Athelas, and Athelas has not paid, credited, or provided anything to anyone in connection with the provision,” the statement said.

Adams did not respond to requests for comment.

The contract, signed by Athelas on July 29, 2025, states that Modern PT is required to refer $750,000 in new business within a one year of a “go-live” date estimated to start 65 days after the contract signing. Athelas was not obligated to pay anything, but it could charge the $66,000 if new business referred by Modern was not “Contract Signed” by the end of the term.

Internal communications and interviews show that Modern PT was not the only clinic that was offered a custom contract arrangement for referring the company’s technology to new prospects.

Jonathan Willms, chief medical officer of Sun Life Health, a federally qualified health center in Arizona that adopted Athelas’ billing products, said the company’s sales team emphasized that referring its products to other medical clinics could be lucrative, especially for a doctor with credibility among peers in the industry.

“They told me that they had other people who had made quite a bit of money, a decent amount of money, doing that,” said Willms, who added that he did some initial reference calls but did not seek to receive payments in his contract. “I felt like it was a conflict of interest.”

A copy of Sun Life’s contract shows that it was charged a higher rate for Athelas’ billing software than Modern PT — 4% of revenue collections, compared to 2.5%. A custom term related to providing references only required that Sun Life organize meetings with prospective customers. It did not set a threshold for generating a specific amount of new business, or oblige Sun Life to pay a fee if enough customers did not sign up.

Eventually, Sun Life terminated its contract with Athelas after running into problems collecting its bills, and Athelas stopped supporting certain product functions. But other customers who stuck with the company showed a greater willingness during contract negotiations to sing its praises.

In negotiations in early 2025, Geogy Vennikandam, then chief operating officer of GI Partners of Illinois, an independent gastroenterology provider, indicated he would talk up the company’s products at an industry conference and introduce them to his professional contacts, according to communications reviewed by STAT.

The communications showed that Vennikandam requested one caveat: He didn’t want Athelas to sell its AI products to rival gastroenterology providers in Illinois — practices that GI Partners could potentially acquire. Athelas’ sales employees registered initial discomfort with his demand. But they also noted that GI Partners’ growth could eventually pay off in the form of higher fees for Athelas and that Vennikandam, whom they referred to as “Dr. G,” regarded the company as “a true partner.”

The employees also discussed the creation of a custom contract term tied to the number of referrals Vennikandam’s clinic would provide over a certain time frame. GI Partners announced its deal with Athelas in April 2025, with Vennikandam heralding its technology as “the future of AI-powered revenue cycle management.”

The final terms of the contract were not publicly disclosed, and neither party would answer questions about them. When asked about the communications reviewed by STAT, Vennikandam, now CEO of the practice, demanded that neither he, nor his medical group, be mentioned in this article.

In its written responses, Athelas described its consideration of a regional exclusivity arrangement with GI Partners of Illinois as a “one-off.” It also said the provision was conditional and never enacted because the conditions were not met. Athelas did not say what the conditions were.

For some of the company’s customers, talking up its products is not just a casual exercise or part of a provision in a contract. For them, promoting Athelas looks more like a job.

Blurry line between customers and salespeople

Wearing an Athelas quarter-zip sweater, with microphone in hand and hair neatly slicked, Matthew Kearns gazed into the camera at the Athelas booth at a conference hosted by the American Physical Therapy Association and delivered a glowing account of his work with the company.

“Athelas has a tool that has allowed us to kind of supercharge our ability to really maximize our revenue and be able to take care of patients in the way that we really went to school to do it,” Kearns said.

The testimonial was packaged into a marketing video, with the company’s bright-pink logo flashing in the background. A badge on Kearns’ chest identifies him as an employee of Lattimore Physical Therapy, a chain of privately owned physical therapy clinics in western New York. But he is otherwise indistinguishable from the sales employees swirling around him on the exhibit floor. He also has a Commure email address and participates in strategy discussions on an internal Slack channel, according to communications reviewed by STAT.

Kearns is listed on the company’s website among other customers who offer testimonials promoting its products. In addition to its work with customers, Athelas also offers incentives for so-called “affiliate partners” to provide “warm introductions” to prospective customers.

According to a contract template reviewed by STAT, for each deal signed as a result of these introductions, the entity or person making the referral gets a payment equal to 2% of the total fee that Athelas collects. The document spells out the math: For a new customer with $6 million in annual recurring revenue who pays a 10% fee to Athelas — equaling $600,000 — the referring party would get $12,000, to be paid in quarterly installments.

The document states that Athelas may give its affiliates trade secrets and other confidential information to help them seek out potential customers, giving them the level of access an employed salesperson would typically have. To qualify for payment, affiliates must refer a customer with at least $1 million in annual collections.

Until recently, the program was outlined on Athelas’ website, describing it as a way for participants to “monetize” their audiences with “simple trackable referrals.” Before STAT’s story was published, the page was removed from the site and is no longer available in its previous form. In a statement, Athelas said it was rebuilding its website as part of the release of a new product. “The section STAT references will be part of the website once it is complete,” the statement said.

Referral arrangements offered by other companies have been targeted by federal prosecutors. In 2023, the Justice Department accused the health software vendor NextGen Healthcare of violating a federal anti-kickback law for paying customers to help land new clients as part of a broader fraud case. NextGen ultimately paid $31 million to settle. NextGen sells EHR and billing software for health care providers, and its referral program provided the same payment rate as the one offered by Athelas.

In its complaint, the Justice Department alleged that NextGen was paying its “premium references” a credit worth a percentage of an ensuing sale. The credit, usually worth 2% of the sale, was capped at $10,000. Under narrow circumstances, companies are allowed to pay a referral service to connect with new customers. But payments for referrals must be related to the cost of providing them, a condition prosecutors alleged was not met by NextGen.

“We felt strongly that there was an anti-kickback element in inducing potential customers to buy NextGen — having users host site visits and a lot of times they weren’t disclosing that they would be getting better deals from the company to act as positive referrals,” said Lauren Lively, a former assistant U.S. attorney who led the NextGen case.

Athelas did not respond to STAT’s questions about the details of its affiliate partners program. In its written comments, the company said there is “no basis” for comparing NextGen and Athelas, because NextGen also was accused of wrongfully obtaining a federal certification of its product that allowed customers to receive federal payments that no Athelas customers received.

The company said its referral practices are industry standard and cited examples of programs operated by peer companies. The company also acknowledged providing small-dollar gift cards for the time customers spend talking with new business prospects but said it expects referral partners to disclose their relationship and that compensation is not tied to the content of their feedback.

NextGen was one of several EHR vendors who faced federal charges when the government was directly subsidizing adoption of that technology. Lively said vendors in those earlier cases often defended their conduct by arguing that paid referral programs are common and insubstantial. “Companies are always saying, ‘Everyone does this. It’s such a small amount of money. Who cares?’ is really the defense,” Lively said, adding: “The ‘who cares’ is that it’s corrupting the normal process of companies vetting products.”

That vetting process has only become more difficult in a new era of technological upheaval centered around AI, with companies racing to sell the technology to clinicians who struggle to evaluate the usefulness of these products and the business arrangements that surround them.

Commure, through Athelas and its other businesses, is seeking to replace older, established EHRs with newer, AI-native technology. It positions its EHR, “Air” — which includes an AI scribe, AI agents, and AI-powered RCM tools — as “the cornerstone of a fully integrated healthcare operating system.”

As it has accelerated sales in recent years, Commure has become embroiled in a different legal fight over the technology. Soon after it rolled out Air, a San Diego-based EHR vendor called Adaptamed filed a lawsuit in federal court accusing Commure of stealing its technologies. The lawsuit cites a mantra within the company — “speed above all else” — to argue that Commure, in a rush to please investors, secretly accessed its systems using borrowed log-in credentials and then copied key aspects of its product.

Commure is defending the lawsuit but declined to comment on it.

When STAT reporters began asking questions about its referral arrangements, more than two dozen of the company’s ostensibly happy customers emailed a reporter to offer an interview. Kearns was among the first to reach out, writing in part: “A colleague recently shared with me that there was an article being written surrounding negative perceptions of Athelas. Hearing that genuinely surprised me because our experience since partnering with Athelas on January 1, 2023 has been the complete opposite.”

The emails used similar language, with customers explaining that they wanted to make sure that any article was unbiased.

Adams from Modern PT was among those who offered to share his “good experience” with the company. But he did not respond to follow-up questions from STAT.

STAT interviewed nine customers who said they remain satisfied with the company and reported spending varying amounts of time and energy integrating its products into their clinics. Many also said they had accepted small amounts of compensation from the company, in the form of gift cards or discounts, for recommending its products to others. Mark Conte, chief executive of Nevada Surgical, said he received software credits for serving as a reference for Athelas.

“You’re trying to help your fellow provider stay in business because you know what a struggle it is,” he said, adding that software credits he received were nominal, around $100. “There is no way it causes any conflict. We would do it without [compensation] for sure.”

Kearns, and his employer Lattimore, declined to respond when asked whether he or the practice were compensated for their promotional activities or participation in referral calls. Commure also did not respond to questions about whether he was compensated.

On Athelas’ website, Kearns is quoted glowingly about the company’s software, concluding that its technology “fuels this ultimate magic that turns dreams into reality.”

But not every customer is quoted on the site, or has a five-star review to offer.

Polar opposite reviews

Among Athelas’ unhappy customers is Karissa Nichols at Gottsche Rehabilitation and Wellness in Wyoming. Nichols said she was impressed by the company’s pitch to use AI to simplify medical billing and improve its collections — promises she said were backed up by reference calls with Kearns and an employee at a physical therapy practice in Utah called Meier & Marsh.

“When you call a reference, especially when it’s another company in your field, you would hope you would be getting the correct information — not getting smoke,” said Nichols, who said neither reference disclosed a conflict or receiving compensation, according to her recollections and notes from the conversations.

Kearns said he discloses his relationship with Athelas during reference calls. He said he could not speculate on what might have gone wrong at Gottsche. The former employee of Meier & Marsh who provided a reference to Gottsche did not respond to STAT’s questions about whether any potential conflicts were disclosed.

Nichols said Medicare payments stalled out entirely a few weeks after her practice, a nonprofit physical therapy chain that serves a mostly rural population, onboarded the technology. In trying to find a solution, she said, Athelas employees were asking questions that seemed oddly basic for a company that specialized in medical billing. “They were coming back to us and saying, ‘Well, what should a claim form look like?’” Nichols recalled.

Nichols said the clinic fell behind on its collections by about $500,000 and began getting angry calls from patients who were confused about their bills. After it couldn’t get the issues resolved, Nichols said, Gottsche ended the relationship with Athelas.

In its own written responses, Athelas stated the Gottsche implementation was complicated by a number of factors. One was an outage at Change Healthcare, a widely-used claims clearinghouse whose services were disrupted a couple months after Athelas began working with Gottsche. Nichols said the problems went well beyond the Change Healthcare disruption and materially impacted its ability to process and receive payments.

Athelas said it switched Gottsche to a different clearinghouse operated by Waystar but ran into additional snags. Some claims had to be routed through a third-party company, WebPT, a requirement that Athelas said was not initially disclosed. Nichols disputes that claim. Athelas also wrote that Gottsche needed special regulatory reporting capabilities because of its nonprofit status, a service that it didn’t offer at the time but has since added.

Athelas noted that it did not charge Gottsche, beyond an initial $1,000 implementation fee, a decision that Nichols said was made when it became apparent that the implementation was unsuccessful.

A prior story published by The Information, a publication focused on technology and finance, named three other medical clinics that reported problems with Athelas’ billing software. STAT reporters spoke with several more.

Willms, the chief medical officer at Sun Life Health, a federally qualified health center in Arizona, said the company’s technology was not ready to serve his practice.

The new system didn’t seem to understand how to deal with “sliding fee” patients, or those who are billed at a lower rate based on their income relative to the federal poverty level. Sun Life also ran into problems getting payments from Medicaid and realized all its dental claims from August to November 2025 had been denied. The unpaid dental claims alone became a $1 million problem, Willms said. Then, Athelas informed Sun Life that it would no longer support dental claims or provide data the clinic was required to report to the government.

Athelas acknowledged the problems at Sun Life, noting that its status as a federally qualified health center comes with specific state and federal reporting and auditing obligations. The company added that it quickly became clear that its services were not a good fit for the clinic chain. Athelas said it waived $500,000 in fees and, when it couldn’t fix the problems quickly, offered to terminate the contract.

Sun Life took it up on the offer.

Willms said he still believes the company’s sales employees were “great well-meaning people” who were simply unaware of the shortcomings of the technology they were selling.

“In retrospect, I think that they were selling a product they believed existed because that’s what they were told,” he said. “In reality, it didn’t.”

Still other customers said, however, that they were able to work through initial challenges to achieve positive results. Janaki Jain, who manages billing operations at Arizona Urology, said it took nearly a year to integrate Athelas’ billing software with its other technology systems. She said she also met regularly with the company’s employees to help write the logic for the billing system, which wasn’t initially oriented to the specific nuances of a urology practice.

Once fully up and running, Jain said, the company’s software produced huge benefits. Revenue collected from insurers shot up 40 percent compared to collections under the practice’s previous billing system. Jain is also quoted on the company’s partnership page about her positive experience. She said she has served as a reference to other potential customers and that she received gift cards from the company for participating in those conversations.

She said Athelas has lived up to its promise to be a partner to her practice but noted that the gains have come through hard work and constant iteration. “The AI only works and is only as smart as what you teach it,” Jain said.

Knowing that up front is also especially important for customers amid the overheated marketing of AI.

Lively, the lawyer, noted that the tech-company practice of working out the kinks after a product is already in use can create serious problems for providers and their patients. “It’s this model of just rushing something to market,” she said, “and it fits really badly in the health care sphere.”