What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-09 compared with 2022-03-17 · 104 added, 125 removed, 399 unchanged (36% of the section changed)

LifeStance Health Group, Inc.

("LifeStance Health Group", "LifeStance Health", "LifeStance" or the “Company”) was formed as a Delaware corporation on January 28, 2021.

The Company was formed for the purpose of completing a public offering and related transactions (collectively referred to as the “IPO”) in order to carry on the business of LifeStance TopCo, L.P.

and subsidiaries.

Unless stated otherwise or the context otherwise requires, the terms "we," "us," "our," "our business," "LifeStance" and "our Company" and similar references refer to LifeStance Health Group, Inc.

and its consolidated subsidiaries and affiliated practices.

References to "our employees" and "our clinicians" refer collectively to employees and clinicians, respectively, of our subsidiaries and affiliated practices.

References to "our patients" refer to the patients treated by such clinicians.

Our vision is a truly healthy society where mental and physical healthcare are unified to make lives better.

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We are dedicated to improving the lives of our patients by reimagining mental health through a disruptive, tech-enabled in-person and virtual care delivery model built to expand access and affordability, improve outcomes and lower overall health care costs.

We combine a personalized, digitally-powered patient experience with differentiated clinical capabilities and in-network insurance relationships to fundamentally transform patient access to mental health treatment.

We combine a personalized, digitally-powered patient experience with differentiated, multidisciplinary clinical capabilities and in-network insurance relationships to fundamentally transform patient access to mental health treatment.

By revolutionizing the way mental health care is delivered, we believe we have, an opportunity to improve the lives and health of millions of individuals.

We employed 5,631 licensed mental health clinicians through our subsidiaries and affiliated practices in 33 states as of December 31, 2022.

Our clinicians offer patients a comprehensive suite of mental health services, spanning psychiatric evaluations and treatment, psychological and neuropsychological testing, and individual, family and group therapy.

Our clinicians offer patients a comprehensive, multidisciplinary suite of mental health services, spanning psychiatric evaluations and treatment, psychological and neuropsychological testing, and individual, family and group therapy.

We treat a broad range of mental health conditions, including anxiety, depression, bipolar disorder, eating disorders, psychotic disorders and post-traumatic stress disorder.

Patients can receive care virtually through our online delivery platform or in-person at one of our conveniently located centers.

Through our more than 250 payor relationships, including national agreements with multiple payors, patients can utilize their in-network benefits when they receive care from one of our clinicians, enhancing access and affordability.

Through our payor relationships, including national agreements with multiple payors, patients can utilize their in-network benefits when they receive care from one of our clinicians, enhancing access and affordability.

Mental illness is a large and growing crisis that creates a significant burden on the healthcare ecosystem.

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adults and one in six youths will experience mental illness each year and over 50% of adults will experience mental health issues during their lifetime.

This incidence has been worsening in recent decades.

This prevalence makes mental health a greater disease burden than cancer or heart disease.

This disease burden has a broader impact across all of healthcare—healthcare costs for individuals with mental health conditions, including depression, have been shown to be approximately three and a half times higher than for people without those conditions.

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Despite this large burden, access to mental health treatment is plagued by significant challenges.

Even if patients are able to access a mental health professional, studies show they often face significant wait times of up to one to two months.

Even if patients are able to access a mental health professional, studies show they often face significant wait times.

During this time, their underlying physical and mental health issues may worsen, potentially requiring treatment in costlier care settings like hospitals, emergency rooms and inpatient mental facilities.

Lack of Affordability :

Nearly 50% of outpatient mental health clinicians do not accept any form of commercial insurance, forcing patients to pay cash out-of-pocket for treatment and, therefore, reducing the likelihood that patients will receive treatment.

In a 2018 survey, nearly one in four people reported needing to choose between getting mental health treatment and paying for daily necessities.

The mental healthcare market remains highly fragmented, forcing patients to pay cash out-of-pocket for treatment and, therefore, reducing the likelihood that patients will receive treatment.

Lack of Scale and Organization:

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This limited access to treatment has a significant social and economic impact.

According to the Center for Prevention and Health Services, nearly 217

million work days are lost annually to absenteeism and reduced productivity due to mental health issues, resulting in an estimated increased annual cost to employers of nearly $17 billion.

We founded LifeStance to solve these challenges.

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We developed powerful incentives for each of our stakeholders—patients, clinicians, payors and primary care and specialist physicians—to align with our mission, adopt our platform and drive our growth.

We estimate that the outpatient mental healthcare market in the United States was approximately $116 billion as of 2020 and today there are over 50 million patients in the United States with a mental health issue that our clinicians could address.

We expect that the market will nearly double from 2020 to 2025 at a compound annual growth rate of 14%, to approximately $215 billion.

We Provide Patients Access to Convenient, Affordable, High-Quality Care

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Our personalized, data-driven comprehensive care meets patients where they are through convenient virtual and in-person settings.

Three quarters of patients prefer in-person mental healthcare.

We support our patients throughout their care continuum with purpose-built technological capabilities, including online assessments, digital provider communication, and seamless internal referral and follow-up capabilities.

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Our digital platform enables collaboration across the clinician team.

Our clinicians are dedicated to our mission—in 2021, we were Certified by Great Place to Work, the global authority on workplace culture, employee experience and leadership behaviors proven to deliver market-leading revenue, employee retention and increased innovation.

We Improve Outcomes and Reduce Costs for Payors and Their Members

Our clinicians are dedicated to our mission—in 2021 and again in 2022, we were Certified by Great Place to Work, the global authority on workplace culture, employee experience and leadership behaviors.

We Reduce Costs for Payors and Their Members

We partner with payors to deliver access to high-quality outpatient mental health care to their members at scale.

Long-term analyses demonstrate that $1 spent on collaborative mental health care saves $6.50 in total medical costs, representing a compelling opportunity for us to drive improved health outcomes and significant cost savings.

Through our validated patient outcomes and extensive scale, we offer payors a pathway to achieving these savings in the broader healthcare system.

Through our extensive scale, we offer payors a pathway to achieving these savings in the broader healthcare system.

By offering access to our services, payors also have an opportunity to reduce their employer customers’

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We collaborate with primary care and specialist physicians to enhance patient care.

Primary care is an important setting for the treatment of mental health conditions—primary care physicians are often the sole contact for over 50% of patients with a mental illness .

Primary care is an important setting for the treatment of mental health conditions—primary care physicians are often the sole contact of patients with a mental illness.

We partner with primary care physicians and specialist physician groups across the country to provide a mental healthcare network for referrals and, in certain instances, through co-location to improve the diagnosis and treatment of their patients.

Our measurable patient outcomes also provide primary care and specialist physicians with a valuable, validated treatment path to improve the overall health of our mutual patients.

We Have an Opportunity to Transform Healthcare as a Whole

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Our scale, breadth of capabilities and value proposition to our key stakeholders position us to enable this transformation, which we are already undertaking.

We co-locate our clinicians to facilitate seamless mental health care treatment and enable collaborative care consultation with other care providers.

In certain instances, we co-locate our clinicians to facilitate seamless mental health care treatment and enable collaborative care consultation with other care providers.

We have over 10 integrated care programs underway, including partnerships with Medicare Advantage plans, employers, and chronic care providers as we lead efforts that seek to demonstrate the ability of fully-integrated mental health models to improve holistic health outcomes.

We envision a future where the coordination and delivery of mental and physical care is accomplished collaboratively between primary care and mental health providers to improve overall patient health, and we are actively working to lead the mental health industry in this direction.

We Have Experienced Significant Growth

We have a demonstrated track record of growth.

Our number of employed clinicians increased from 1,404 as of December 31, 2019, to 3,097 as of December 31, 2020 and to 4,790 as of December 31, 2021.

How We Generate Revenue

We generate revenue on a per-visit basis when a patient receives care from one of our clinicians.

Depending on the state, our clinicians are either employed directly through our subsidiaries or through our affiliated practices, for which we manage day-to-day operations pursuant to long-term management services contracts.

Our revenue is generally derived from in-network insurance coverage, pursuant to which our subsidiaries or affiliated practices are reimbursed for patient services.

For the year ended December 31, 2021, 90% of our revenue was derived from commercial in-network payors, 5% of our revenue was derived from government payors, 4% of our revenue was derived from patients on a self-pay basis and 1% of our revenue was derived from non-patient services.

Our revenue is generally derived from patients with in-network insurance coverage, pursuant to which our subsidiaries or affiliated practices are reimbursed for patient services.

For the year ended December 31, 2022, 91% of our revenue was derived from patients with commercial in-network payors, 4% of our revenue was derived from patients with government payors, 4% of our revenue was derived from patients on a self-pay basis and 1% of our revenue was derived from non-patient services.

Our contracts with payors are typically structured as fee-for-service arrangements, with negotiated reimbursement rates for our clinical services.

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We believe we are well-positioned to grow our revenue by catering to each of our stakeholders and remaining focused on our patient-centered mission.

We estimate that the outpatient mental healthcare market in the United States was approximately $116 billion as of 2020.

We expect that the market will nearly double from 2020 to 2025 at a compound annual growth rate of 14%, to approximately $215 billion.

We Deliver Value for All Key Stakeholders in the Healthcare Ecosystem

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We enable our patients to conveniently see their clinician through their preferred choice of virtual or in-person visits.

Three quarters of patients prefer in-person mental healthcare.

We optimize patient engagement through our convenient digital tools, including online scheduling, adherence reminders, online prescription refills and online payments.

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Front door to comprehensive mental health care:

We offer comprehensive access to a suite of services to meet our patients’

We offer comprehensive, multidisciplinary access to a suite of services to meet our patients’

needs through their mental health care journey.

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Increased access and affordability through in-network coverage:

We have over 250 payor relationships nationally, which improves access and affordability for our patients.

We have national payor relationships, which improves access and affordability for our patients.

Our in-network patients can seek initial mental health screening, clinical treatment and subsequent therapy or follow-up as needed in a timely manner appropriate for their needs.

Outcomes-driven, patient-centric care:

Through our technology and our outcomes data, we enable patients and their clinicians to track improvements in their well-being, increasing their engagement with care.

Our Clinicians Are Empowered to Focus on Improving the Lives of Their Patients

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We promote a clinical culture of collaboration and ongoing learning for our team of mental health professionals.

Our clinicians share evidence-based practices and meet regularly for continuing

education and other collaborative opportunities for learning.

Our clinicians share evidence-based practices and meet regularly for continuing education and other collaborative opportunities for learning.

They are also strongly supported to work together across disciplines to provide the most comprehensive and clinically effective care possible—often the most effective, evidence-based treatment modality is a combination of psychotherapy and psychiatric medication, and our mix of prescribers and non-prescribers supports the ability to provide optimal patient care.

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We have built a centralized operating platform that enables significant efficiencies for our clinicians, alleviating administrative burden, expanding availability for patient care and improving overall clinician satisfaction.

Our unified electronic health record and outcomes tracking platform, combined with our management of day-to-day operational aspects such as marketing, payor contracting, billing and collecting, intake, and scheduling, alleviates administrative burden and improves overall career engagement.

Our unified electronic health record tracking platform, combined with our management of day-to-day operational aspects such as marketing, payor contracting, billing and collecting, intake, and scheduling, alleviates administrative burden and improves overall career engagement.

Robust support services:

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We believe investing in our talent in human capital is paramount.

Under our employee equity incentive program, we make grants to eligible employees, including clinicians, beginning in 2022.

For clinicians, eligibility for equity awards and vesting are tied to productivity, directly serving our mission of expanding access to mental healthcare at this critical time for the country.

Under our employee equity incentive program, we make grants to eligible employees, including clinicians.

For clinicians, eligibility for equity awards and vesting are tied to productivity, directly serving our mission of expanding access to mental healthcare.

We believe our equity program boosts our value proposition in a highly competitive labor market, can help attract and retain the talent needed for our patient-centric business model, and promotes an ownership mindset among our employees, including our clinicians.

Just as critically, it aligns with our values and purpose and builds on a history of investment in our team by providing meaningful rewards for furthering our mission of enhancing access to mental healthcare in a sustainable manner over the long term.

Our Payor Partners Expand Access, Improve Outcomes and Lower Costs

We have over 250 in-network payor relationships offering access to our clinician team.

Just as critically, it aligns with our values and purpose and builds on a history of investment in

our team by providing meaningful rewards for furthering our mission of enhancing access to mental healthcare in a sustainable manner over the long term.

Our Payor Partners Expand Access and Lower Costs

We have in-network payor relationships offering access to our clinician team.

We deliver value to our payor partners in several ways:

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As a result, improving access and coverage of mental health care represents a large cost containment opportunity with a compelling return on investment.

Measurable outcomes:

We track major measures of clinical outcomes, quality and utilization.

These measures allow us to track the improvement of patients, measure their progress and provide our payor and employer partners with the data to quantify the impact of our care.

We believe we are uniquely positioned to offer payors this comprehensive data and outcomes capability within our industry.

Stronger member and client value proposition:

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By having access to our extensive clinical team, primary care and specialist physicians can more easily and consistently connect patients to our clinicians throughout the course of their care.

Improved outcomes:

Through the integration of mental and physical health care, we believe physicians can achieve better outcomes and lower total health care costs to their patients with co-morbidities.

Our outcomes also provide our primary care and specialist physician partners with data to assess treatment of our mutual patients.

Enable more integrated care and lower costs:

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Our collaborative care model, through our partnerships with primary care physicians, other specialists and payor partners, aims to improve early diagnosis of mental health conditions to drive identification and better treatment, which may lead to improved quality outcomes and lower costs.

Our Strategies for Growth

Our Growth Strategies

We believe we are well positioned to sustain our strong track record of growth and accomplish our mission to reimagine mental health care in the United States.

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Our clinician productivity drives center profitability, as evidenced by our de novo centers generating an attractive and predictable return on investment.

All but one of our de novo centers that have been open for 18 months or longer have achieved profitability within that time period.

Expand Presence in Our Existing Markets

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We have a significant opportunity to scale within our existing footprint.

We estimate that there are approximately 650,000 mental health clinicians in the United States, which provides us with a meaningful runway to grow from our current base of 4,790 employed clinicians, as of December 31, 2021.

Our investments in technology are a critical component of our growth, improving our patient and clinician experience and enabling us to leverage our platform scale to expand our reach.

Our virtual and in-person care model allows us to optimize our utilization within our existing center and clinician footprint while flexibly scaling our platform capacity across our markets to meet demand.

Our virtual and in-person care model allows

us to optimize our utilization within our existing center and clinician footprint while flexibly scaling our platform capacity across our markets to meet demand.

Our existing payor and primary care physician relationships further support this rapid growth by improving our patient access as we grow in our markets.

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We believe our model is highly replicable nationally.

We identify new markets based on the core characteristics of attractive patient population demographics, substantial clinician recruiting opportunities, untreated patient communities and a

diverse group of payors.

We identify new markets based on the core characteristics of attractive patient population demographics, substantial clinician recruiting opportunities, untreated patient communities and a diverse group of payors.

We are able to enter new markets and grow our clinician base in those markets via acquisitions of clinician groups and through clinician hiring.

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We enjoy preferred national relationships with payors based on our scale, comprehensive service offering and ability to integrate mental health care.

We have over 250 in-network payor relationships.

We are focused on improving the lives of our patients through validated outcomes that enable health care cost savings and further increasing our value as a partner to payors, primary care and specialist physicians and employers.

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We believe that increased integration across the industry could enable payors to realize their population health goals and enable our primary care and specialist physician partners to successfully operate within value-based care and outcomes-driven reimbursement models.

As we continue to grow, we see an opportunity to augment the scope of our relationships with each of our stakeholders, including by entering into risk-sharing partnerships.

As we continue to grow, we see an opportunity to augment the scope of our relationships with each of our stakeholders.

We believe our deepening relationships with each of these key health care stakeholders will further drive our success as we benefit from continued growth in our patient referral networks.

Advance Integrated Care Models

We are currently pioneering collaborative care models with our payor partners in several of our markets, embedding mental health clinicians into primary care centers to evaluate and treat patients in a single setting.

We co-locate our clinicians in primary care and specialist offices.

In certain instances, we co-locate our clinicians in primary care and specialist offices.

We are also in programs with partners in certain chronic disease populations to identify and treat co-occurring mental health conditions, with the goal of improving overall health outcomes.

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needs in a unified practice but also deliver better outcomes and lower overall medical costs.

Highly Experienced Executive Team

Our executive team has a proven track record, having successfully founded and led several patient-centric healthcare businesses.

Our leadership team has an average of over 20 years of experience across operational, technology and clinical roles in healthcare and technology businesses.

We believe our executive team’s extensive experience will continue to drive our success.

Our Integrated Platform Is Reimagining Mental Health

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We employ a comprehensive range of mental health professionals to provide multi-disciplinary clinical modalities through our subsidiaries and our affiliated practices.

We serve all patient demographics—children, adolescents, adults and

We serve all patient demographics—children, adolescents, adults and geriatrics.

Patients have seamless access to our team of licensed mental health clinicians, including psychiatrists, APNs, psychologists and therapists.

Our breadth of clinical capabilities facilitates coordination across psychiatric and psychotherapy treatment modalities, limiting the need to refer patients externally as their needs are met within our comprehensive service offerings.

Our clinicians have access to our digital platform, which allows for shared electronic medical records for internal communication, and facilitates patient referrals within our clinician team, both of which support our collaborative approach to care.

Our clinicians have access to our digital

platform, which allows for shared electronic medical records for internal communication, and facilitates patient referrals within our clinician team, both of which support our collaborative approach to care.

Our Clinical Services

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We use evidence-based approaches to ensure effective treatment.

Our outcomes data is tracked and shared with our clinicians to monitor patient progress and adjust treatment as needed to achieve the best possible patient treatment results.

Our Digital Strategy

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We are uniting virtual and in-person treatment with the goal to redefine the delivery of mental care for consumers across the ecosystem—one that delivers virtual engagement as personalized and human as the best in-person visits, and in-person visits as simple and seamless as the best digital experiences.

Across all three pathways and constituencies, we believe LifeStance delivers distinct value today, while continuing to shape and bring to life a vision for potentially even greater value in the future.

Across our digital pathways, through our ability to increase access to care and lower the cost of treatment, we believe LifeStance delivers distinct value today, while continuing to shape and bring to life a vision for potentially even greater value in the future.

Our Hybrid Care Delivery Model

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Currently, our typical de novo center comprises 3,500 to 4,500 square feet and 10 to 12 clinician exam rooms.

We systematically locate our de novo centers within a given market to ensure convenient coverage for in-person access to care.

We aim systematically to locate our de novo centers within a given market to ensure convenient coverage for in-person access to care.

To provide our patients and clinicians with flexibility, our centers are generally open five days a week from 7:00 a.m.

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We further optimize patient engagement through our convenient digital tools, including online messaging, adherence reminders, online prescription refills and online payments.

Our patient portal allows patients and clinicians to

communicate regularly, which is critical in a variety of circumstances, including for example, to help prevent errors in medication dosing and compliance.

Our patient portal allows patients and clinicians to communicate regularly, which is critical in a variety of circumstances, including for example, to help prevent errors in medication dosing and compliance.

By offering these accessible tools, we believe patients are more likely to seek care and maintain appointments, driving further engagement and improving health outcomes.

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Our Payor Relationships

As of December 31, 2021, we had a large and diverse base of over 250 national, regional and local payors.

We have a large and diverse base of national, regional and local payors.

Our dedicated payor relationship team is divided into three regions to ensure that strong relationships with regional operations teams and insurance companies are cultivated.

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Our Physician Relationships

As of December 31, 2021, we had a large base of regional referring primary care physicians, specialist physicians and other network providers.

We have a large base of regional referring primary care physicians, specialist physicians and other network providers.

Within our markets, we partner with primary care practice groups, specialists, health systems and academic institutions to refer patients to our centers and clinicians.

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We achieve this through in-person visits as well as offline and online marketing.

We established ongoing rapport with these groups by making progress reports, discharge summaries and outcomes data available.

Our Marketing Efforts

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We also hand out a limited number of printed brochures or other marketing materials to raise awareness of the Company locally.

S ome states have laws that prohibit business entities with non-physician owners from practicing medicine, which are generally referred to as the corporate practice of medicine.

Some states have laws that prohibit business entities with non-physician owners from practicing medicine, which are generally referred to as the corporate practice of medicine.

See “—Government Regulation—Corporate Practice and Fee-Splitting.”

I n states where we are not subject to corporate practice of medicine laws, we operate our business through centers that are wholly owned by our subsidiaries.

In states where we are not subject to corporate practice of medicine laws, we operate our business through centers that are wholly owned by our subsidiaries.

In states where the corporate practice of medicine doctrine applies, in order to comply with such laws, we do not own the centers or directly employ the clinicians.

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Anisha Patel-Dunn, our Chief Medical Officer, or other licensed clinical leadership employees.

However, we own substantially all of the assets of the center and enter into a long-term management services contract with the center pursuant to which we provide all the services to the center that it needs to operate, with the exception of medical or clinical services.

However, we own substantially all of the non-medical assets of the center and enter into a long-term management services contract with the center pursuant to which we provide all the management services to the center that it needs to operate, with the exception of medical or clinical services.

As of December 31, 2022, 373 of our 619 centers were operated as affiliated practices.

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Payor Agreements

We and our affiliated practices have over 250 payor relationships across multiple independent regional and national contracts.

We and our affiliated practices have payor relationships across multiple independent regional and national contracts.

These relationships allow members to utilize their in-network benefits when such individual elects to receive service from one of our clinicians.

As of December 31, 2022, our contracts with payors typically provide for an initial term of one to three years and auto-renewal thereafter for additional one year terms, with a majority of those agreements in automatic annual renewal stages.

The contracts with our three largest payor partners are entered into on substantially consistent terms.

The contracts with our two largest payor partners are entered into on substantially consistent terms.

In most markets, our practices have been contracted (in-network with payors) for more than a decade.

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A review of our business by courts or regulatory authorities could result in determinations that could adversely affect our operations or health care regulatory environment may change in a way that impacts our operations.

In response to the COVID-19 pandemic, state and federal regulatory authorities loosened or removed a number of regulatory requirements in order to increase the availability of telehealth.

For example, many state governors issued executive orders permitting physicians and other health care professionals to practice in their state without any additional licensure or by using a temporary, expedited or abbreviated licensure process so long as they hold a valid license in another state.

In addition, changes were made to the Medicare and Medicaid programs (through waivers and other regulatory authority) to increase access to telehealth by, among other things, increasing reimbursement, permitting the enrollment of out of state providers and eliminating prior authorization requirements.

It is uncertain how long these COVID-19 related regulatory changes will remain in effect and whether they will continue beyond this public health emergency period.

Prior to the COVID-19 pandemic, our reimbursement rates for telehealth and in-person care were substantially similar.

This was driven by contractual arrangements with our payor partners or payor policies, which we expect to remain in effect.

Practice of Medicine

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We are also subject to the HIPAA breach notification rule, which requires covered entities to notify affected individuals of breaches of unsecured PHI.

In addition, covered entities must notify the Office of Civil Rights ("OCR") and the local media if a breach affects more than 500 individuals.

In addition, covered entities must notify the Office of Civil Rights ("OCR") and the local media if a

breach affects more than 500 individuals.

Breaches affecting fewer than 500 individuals must be reported to OCR on an annual basis.

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In recent years, there have been a number of well publicized data breaches involving the improper use and disclosure of PII and PHI.

breach to affected individuals and state officials and provide credit monitoring services and/or other relevant services to impacted individuals.

Many states have responded to these incidents by enacting laws requiring holders of personal information to maintain safeguards and to take certain actions in response to a data breach, such as providing prompt notification of the breach to affected individuals and state officials and provide credit monitoring services and/or other relevant services to impacted individuals.

In addition, under HIPAA and pursuant to the related contracts that we enter into with our clients who are covered entities, we must report breaches of unsecured PHI to our clients following discovery of the breach.

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prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration, in cash or in kind, in return for, or to induce, the (1) the referral of a person covered by government health care programs, (2) the furnishing or arranging for the furnishing of items or services reimbursable under government health care programs, or (3) the purchasing, leasing, ordering, or arranging or recommending the purchasing, leasing, or ordering, of any item or service reimbursable under government health care programs.

Federal courts have held that the Anti-Kickback Statute can be violated if just one purpose of a payment is to induce referrals.

Federal courts have held that the Anti-Kickback Statute can be violated if just one purpose of a payment is to induce

Actual knowledge of this statute or specific intent to violate it is not required, which makes it easier for the government to prove that a defendant had the state of mind required for a violation.

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Government agencies engage in significant civil and criminal enforcement efforts against health care companies under the False Claims Act and other civil and criminal statutes.

False Claims Act investigations can be

initiated not only by the government, but by private parties through qui tam (or whistleblower) lawsuits.

False Claims Act investigations can be initiated not only by the government, but by private parties through qui tam (or whistleblower) lawsuits.

Penalties for False Claims Act violations include fines ranging from $12,537 to $25,076 per false claim or statement (as of 2022, and subject to annual adjustments for inflation), plus up to three times the amount of damages sustained by the federal government.

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In addition, the Civil Monetary Penalties Law imposes civil administrative sanctions for, among other violations, (1) inappropriate billing of services to government health care programs, (2) employing or contracting with individuals or entities who are excluded from participation in government health care programs, and (3) offering or providing Medicare or Medicaid beneficiaries with any remuneration, including full or partial waivers of co-payments and deductibles, that are likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier (subject to an exception for non-routine, unadvertised co-payment and deductible waivers based on individualized determinations of financial need or exhaustion of reasonable collection efforts).

State Health Care Competition and Planning Laws

Several states in which we operate have adopted competition and health care planning laws that affect transactions in the health care industry.

Some states require notification, filings, and/or approvals by state agencies with respect to proposed transactions involving health care providers.

Such processes can take significant time, require filing fees, result in conditions that require certain operational changes, and include regular annual reviews regarding the cost and quality of services, among other topics.

These laws and the level of enforcement by the respective state agencies are subject to continuous change and interpretation, and compliance with these laws could adversely affect our business.

Intellectual Property

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Employees and Human Capital Resources

LifeStance Health is Great Place to Work, certified by the Great Place to Work Institute which is the global authority on workplace culture.

When asked what make LifeStance Health a Great Place to Work, our team members most valued Flexibility, Caring People, Management, Support Staff and Inclusion.

In addition, nearly 85% of employees say, “I feel like I can bring my authentic self to work”.

LifeStance Health was certified by the Great Place to Work Institute for the second consecutive year in December 2022.

When asked what makes LifeStance Health a Great Place to Work, our employees reported that they most valued Flexibility, Team Culture, feeling Supported and having special Benefits.

In addition, more than 80% of employees said, “I feel I make a difference here" and “I can be myself around here.”

As of December 31, 2022, we employed approximately 7,830 employees through our subsidiaries and affiliated practices, of which 3,967 were directly employed through our subsidiaries and 3,863 were directly employed by our affiliated practices.

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Celebrating Difference - we respect the diversity of every individual's lived experiences

Our employees are deeply compassionate, dedicated advocates for mental health and overall wellbeing.

Over the last year, we have implemented a number of initiatives to support our employees’

health and wellbeing, in several ways:

Employee health & wellness :

As a company focused on mental health, the culture and community we build with our employees is paramount.

We have taken several steps to ensure we continue to support them both within and outside of the workplace.

First, we initiated quarterly satisfaction surveys, townhalls and a communication channel called Better Together, providing agency for clinicians and team members to share feedback that we can address timely in addition to celebrating key moments and milestones together.

This accessible and personalized approach to communication parallels our mission and values and helps clinicians feel like while they are caring for patients, LifeStance is caring for them.

Second, recognizing that financial security is an important attribute of mental health, we developed a long-term incentive program to award employee stock grants –

including to clinicians –

providing meaningful rewards for furthering our mission of enhancing access to mental health care.

In addition, we redesigned our medical benefits and wellness plans to significantly improve affordability and access for our team members including enhancements to parental leave, enhanced mental health benefits, and care navigation support for employees and extended family members.

Third, we implemented a systematic way of identifying clinicians and team members who may be experiencing burnout or compassion fatigue and offer peer-to-peer support through our national clinical team.

In addition, all clinicians are assigned champions who initiate routine one-on-one communications to ensure that we are giving our clinicians opportunities to be heard and supported.

These initiatives are especially important with lower social contact in the workplace resulting from the pandemic and team members working remotely.

Guided by the Great Place to Work dimensions of well-being, we have developed a holistic approach to caring for our employees, community and environment through a programmatic focus on wellness:

Physical and Mental Wellness :

Over the last year, we redesigned our medical benefits plan to improve affordability and access including lower out-of-pocket expense for dependent coverage, family planning and care navigation for employees and their families.

We also implemented a flexible time-off plan and made up to 20 mental healthcare visits free of charge for medical plan participants.

In addition, we offer a peer-to-peer support line for colleagues in need of support.

In a Future of Work Study conducted at mid-year which included a survey and focus groups with current employees as well as feedback from former employees, LifeStance employees were most satisfied with work-life balance, demonstrating the support they feel for flexibility and autonomy at work, each of which is a critical attribute to preventing burnout.

Financial Wellness :

As mental healthcare providers, we understand that financial stress can contribute to anxiety and depression, two of the leading diagnoses we see in our practices.

To support financial wellness, we implemented an industry leading Long-Term Incentive Plan for LifeStance clinicians to earn stock awards as an incentive for increasing access to mental healthcare through their services.

We believe providing a path to ownership in LifeStance Health is a differentiated benefit for our clinicians and other eligible employees.

In further support of our programmatic approach, we developed a financial education series to help our employees understand how to optimize total compensation, learn about stock-based compensation and promote long-term financial wellness.

Community Wellness :

Building upon our approach to corporate philanthropy after the endowment of the LifeStance Health Foundation in 2021, we increased engagement in pro-social giving through two primary programs over the last year.

First, we continued to promote Giving Thanks—a peer-to-peer recognition program to recognize colleagues for how they make lives better.

For our end-of-year Giving Thanks campaign, participants could nominate a non-profit to receive a grant from LifeStance Health Foundation.

The LifeStance Health Foundation granted awards to 120 non-profit organizations, in support of the causes most important to our employees, through this program.

Second, we partnered with the American Foundation for Suicide Prevention ("ASFP") for a matching campaign in support of AFSP's Walk Out of Darkness community walks.

LifeStance employees formed walk teams across the country and helped AFSP surpass their fundraising goal including our local fundraising efforts and a $50,000 matching donation.

Raising awareness for suicide prevention and supporting families coping with suicide loss is such a meaningful mission for our mental healthcare providers and all of our teams working together to make lives better.

The combination of pro-social giving, participating in local fundraising activities and seeing the impact of our teams nationwide is how we are not only building community within LifeStance, but also living our value of Delivering Compassion in the communities we serve.

Environment, Social and Governance ("ESG") :

We are making important progress to be a leader in our industry.

Last year, our Board of Directors delegated our Nominating and Governance Committee responsibility for oversight of our ESG strategy.

One way that we are developing our ESG policy is to focus on the environmental impact of our 619 centers.

Our new locations utilize materials

known for their sustainability practices including Declare certified (and Living Building Challenge compliant) ceiling tiles and grid;

SUSTAIN high performance sustainable ceiling systems;

Resilient Floor Covering Institute (RFCI) industry average Environmental Product Declaration flooring;

Environmental Product Declaration Certified wall base;

FloorScore Certified low emitting materials;

low or zero VOC paint;

and all high-efficiency LED lighting to minimize power consumption.

Diversity, Equity, Inclusion and Belonging :

At LifeStance, culture starts with leadership—one-third of our executive leadership team and Board of Directors are diverse by gender or race/ethnicity.

Our National Diversity, Equity and Inclusion ("DEI") Committee is guided by the vision of fostering a workplace in which individuals of all backgrounds are welcomed by a culture of inclusion and respect.

As a committee we are focused on education, cultural humility, celebrating difference and taking effective action to ensure every staff member and patient under our care understands that LifeStance is a safe place for them to be their authentic selves.

At LifeStance, culture starts with leadership—over 70% of our clinicians, 50% of our executive leadership team and 40% of our Board of Directors are diverse by gender or race/ethnicity.

Finally, we developed an in-house training, education and professional development program which is designed to promote a community-based approach to learning and enable team members to build relationships across locations.

We are collaborating with our National DEI Committee and local DEI chapters to weave our value of Celebrating Difference into content and training modules.

The combination of these initiatives is how we get Better Together at LifeStance.

Another attribute of happiness and well-being is participation in pro-social giving.

In support of this and further increasing access to affordable mental health care, LifeStance endowed the LifeStance Health Foundation in June 2021.

The Foundation was developed to award grants, award scholarships and support organizations that share our mission with a focus on especially vulnerable patients including youth and adolescents, underrepresented minority communities and the underemployed/uninsured.

To date, the LifeStance Health Foundation has awarded more than $400,000 to both national and local non-profits working to destigmatize access to mental healthcare including The Mental Health Coalition, the U.S.

Olympic and Paralympic Foundation, Washington Recovery Alliance, Hillsboro Schools Foundation and Peer Health Exchange.

In addition, we held a peer-to-peer recognition event called Giving Thanks over the holiday season which culminated in a day of celebrating individual clinicians and team members for how they make lives better every day and making a donation from LifeStance Health Foundation to nearly 120 local non-profit organizations nominated by our teams.

We are very proud to support our employees and their commitment to our mission which improves the health and wellbeing of patients across the communities we serve.

While world events over the last few years have destigmatized mental health in important ways, our clinicians and team members chose a career in mental healthcare long before it was in the spotlight.

Their compassion, expertise, and advocacy are making a difference.

At LifeStance Health, we make lives better.

Our National DEI Committee is focused on education, cultural humility, celebrating difference and taking effective action to ensure every staff member and patient under our care understands that LifeStance is a safe place for them to be their authentic selves.

In collaboration with our National DEI Committee, our in-house Training, Education and Professional Development team developed new content and training modules informed by our value of Celebrating Difference including a proprietary Unconscious Bias training for all employees.

Our community-based approach to learning enables employees to build relationships across locations and workplaces, ensuring equity for employees whether working in-person or remotely.

LifeStance employees are deeply compassionate, dedicated advocates for mental health and overall well-being.

Together we are making significant progress on our vision for a truly healthy society where mental and physical healthcare are united to make lives better.

Our revenue varies seasonally depending on a number of factors, including the number of business days in a period.

We generate lower revenue and experience lower clinician utilization in periods that have fewer business days than other periods.

This trend makes it difficult to forecast our future results with precision and to assess accurately whether increases or decreases in any one or more quarters are likely to cause annual results to exceed or fall short of previously issued guidance.

Unanticipated future volatility can cause actual results to vary significantly from our guidance, even where that guidance reflects a range of possible results and has been updated to take account of partial-year results.

General Corporate Information

8 unchanged sentences

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, are available free of charge on or through our web site, www.lifestance.com, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission, or the SEC.

The SEC’s

website, www.sec.gov, contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The SEC’s website, www.sec.gov, contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business