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(Bloomberg) -- Papa Inc., a startup that sends contractors to the homes of the elderly to help them with household tasks and offer companionship, is facing a flurry of contract terminations by health insurers for next year, following a Bloomberg Businessweek report that revealed extensive allegations of abuse from its workers and the elderly who rely on it.
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Nearly three dozen insurance plans and employers have determined they will not renew partnerships for next year, according to a document reviewed by Bloomberg. Those insurers include Cigna Group and several Blue Cross plans in different states, as well as the grocery chain Albertsons Cos., which offered Papa’s service to employees in a pilot program at a distribution center but did not continue it. Major insurers including Humana Inc., CVS Health Corp.’s Aetna and Molina Healthcare Inc. also declined to renew relationships with Papa, Bloomberg reported in September.
A spokeswoman for Papa said that the company would continue talks with customers. “While some of the annual [Medicare Advantage] contracts will expire at the end of 2023, Papa remains in active discussion with nearly all of those plans for 2024,” she said in a statement.
The spokeswoman said that even as some plans are cutting back because funding for Medicare Advantage programs is declining, more than one-third of its clients are “expanding relationships” with Papa. “While certain economic factors are putting pressure on the market, there’s a greater need than ever for Papa,” she added. The spokeswoman said the startup is still “actively selling” services for next year.
Representatives for Cigna did not respond to requests for comment. Albertsons did not respond when asked why the company didn’t extend its pilot program.
The contracts ending mean Papa is losing a large swath of business heading into the new year. Health insurers, including Medicare Advantage and Medicaid plans, as well as employers, sign contracts with Papa and then offer its service to their members as part of their plans, typically for a certain number of hours per year. Medicare Advantage plans are offered by private insurance companies and sometimes provide extra benefits, such as dental and prescription drug coverage. Papa sends contractors to the homes of the elderly for help with household chores, including cleaning, transportation to and from the doctor or other errands, and companionship. The company has in the past described its service as “grandkids on demand.”