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Hazel Health, which once described itself as 鈥渢he largest K-12 mental and physical health provider in the nation,鈥� faces an uncertain future after enduring two rounds of layoffs since last fall and the loss of several lucrative contracts with school districts. 

In February, the telehealth company , including clinicians who worked directly with students and families, leaving about 500 employees. 

The company lost one of its biggest customers, the Los Angeles County Office of Education, last year. It shortened its contract with the Chicago Public Schools because of “challenges securing funding,” a spokeswoman said. And several districts across the country have also either ended their business with Hazel or have contracts that expire later this year. 

they are 鈥渞estructuring鈥� the company to put it in a better position as it pursues more stable sources of funding, like billing Medicaid and private insurance, now that the federal relief funds some districts used have expired. Company spokeswoman Emilie Fetterley said no additional layoffs are expected 鈥渁t this time鈥� and that many states and districts plan to renew their contracts. 

But according to internal memos, by a news outlet covering mental health, CEO Iyah Romm said the company was losing 鈥渢oo much money鈥� to meet its goals. Since the expiration of the Los Angeles contract, the company has even, at times, absorbed the cost of services, Fetterley said. 

Some say the company faces a difficult road ahead.

There is a 鈥渕assive need鈥� to address student mental health and behavior issues, said Adam Newman, co-founder of Tyton Partners, a consulting firm focused on the education sector. Until the relief funds ran out, 鈥渢here were enough dollars in the system for schools and districts to find ways to underwrite these types of programs. But the risk has always been: What’s the durable funding model?鈥�

In Missouri, the Ferguson-Florissant district, outside St. Louis, ended its business with Hazel last year.

鈥淭hey were great to work with,鈥� said spokeswoman Onye Hollomon. Hazel served about 2,000 students in the district, which used COVID relief funds to pay for the program. 鈥淥nce that phased out, we had to make that cut.鈥�

Los Angeles spent more than $28 million in one year to make Hazel available to the county鈥檚 80 districts, according to GovSpend, a data company tracking payments to government agencies. It funded its deal with the company by tapping a $389 million . Between March 2022 and May 2024, 804 schools in the county referred 9,337 students for services, according to data Hazel provided to the county. Of those, 4,162 students received at least one visit, with students participating in an average of six visits. Fetterley said once a student is referred to Hazel, parents don鈥檛 always follow through with a visit or may seek help elsewhere.

In addition to taking a loss on services for some students since last year, Hazel has relied on billing insurance, including Medi-Cal, the state鈥檚 Medicaid program, and contracts with individual districts. Leaders are currently negotiating contracts with districts for next school year. 

Hazel is also one of eight providers approved for a new program that allows 700 districts throughout California to be reimbursed for services by Medi-Cal or private insurers. It participates in a similar in Iowa, and in Nevada, the Clark County School District uses Medicaid funds to pay for Hazel services, but that ends in June. A spokesperson said the board has not yet decided whether to renew it.

鈥楳ade their mark鈥�

Telehealth programs, delivered through schools, were expanding long before the pandemic. They offer families convenient access to a remote doctor or therapist while preventing students from missing school for appointments that often turn into full-day absences. Hazel Health, founded in 2015 by health care executive Josh Golomb, was part of that growth. 

鈥淭elehealth providers have made their mark in school-based health care,鈥� said Nirmita Panchal, a senior policy manager at KFF, a nonprofit focusing on health policy. 鈥淭hey eliminate transportation barriers, where students may not be able to physically get to a provider.鈥�

During the pandemic, when learning and work suddenly went virtual, telehealth programs for schools . of school-based health centers showed that during the 2020-21 school year, more than 80% of respondents offered telehealth services, up from 19% in 2016-17. 

The financial landscape has since changed. A lot of districts are now cutting budgets to close deficits. GovSpend, which doesn鈥檛 capture all district spending, shows a decline in payments to , a similar company, since 2023, while , another virtual mental health provider, saw a more stable influx of funds from 2024 to 2025. 

Among providers, however, Hazel Health stands out. The company, which serves 6,000 schools in 21 states, initially focused on primary health care, with physicians prescribing over-the-counter medications for routine symptoms like stomach pain or headaches. In 2021, the company broadened its model to provide mental health services and respond to 鈥渞ising unmet student needs and limited access to care,鈥� Fetterley said. 

In Florida鈥檚 Duval County schools, Brittany Beimourtusting reached out to Hazel last school year when she was going through a divorce. Her middle child, she said, was having trouble adjusting.

鈥淚t was a single-parent household all of a sudden, and I thought, 鈥楬ow am I supposed to get him to get help because I think he could use therapy,鈥� 鈥� she said. The provider, she said, met with him about five times and helped him open up about what he was feeling. 鈥淚t was definitely worth it.鈥�

But when Superintendent Christopher Bernier looked for ways to save the district some money last year, a $1.4 million payment to Hazel was on the list.

鈥楢 connected system鈥� 

Four years ago, the startup鈥檚 future looked bright.

It attracted over $50 million from investors, including Fiore Ventures, founded by Walton family heiress Carrie Walton Penner. As recently as last year, Hazel was still eyeing growth. It made two acquisitions, including , which offers family therapy, to further expand mental health services. 

鈥淭ogether, we are building a connected system that supports children from their classrooms to their kitchen tables,鈥� wrote Andrew Post, then 贬补锄别濒鈥檚 president, in October. But he has since resigned, writing this month that it was time to turn to the 鈥渘ext chapter鈥� in his career.

贬补锄别濒鈥檚 was supposed to run through the end of 2027. Now it will end on June 30. Still, district officials said the layoffs have had no impact on the services students receive. In a pilot program that began in March 2025, the district made mental health services available to 84 high schools. As of January, 420 students had taken advantage of the program, the district said.

In December, Destiny Singleton, the honorary student member of the Chicago Board of Education, told members that students don鈥檛 always feel comfortable talking to school counselors about personal issues because those staff members are often focused on academic performance and preparing for college. That鈥檚 why talking to an outsider can be helpful. But she added that students at the district鈥檚 larger high schools are often unaware that Hazel is even an option.

Some Chicago parents, however, are wary of Hazel and say families don鈥檛 always know what they鈥檝e agreed to when they consent to allowing their child to meet with a Hazel provider. In to Chicago district leaders last year, student privacy advocates said they were concerned about whether Hazel properly secures students鈥� private information. 

The company鈥檚 acquisition of Little Otter, , raises red flags because Rebecca Egger, its CEO, formerly worked for Palantir, a federal contractor known for using AI to assist the Department of Homeland Security in its . 

In a response to Chicago officials, Romm, the CEO, wrote that Hazel does not 鈥渟ell, share, or use student data for any commercial purpose,鈥� and that it 鈥渄oes not have any relationship with Palantir, commercial or strategic.鈥�

Fetterley, the company spokeswoman, also said Hazel is in the early stages of rolling out chatbots to 鈥渟implify administrative tasks like scheduling for parents and clinicians,鈥� but that AI will never be a 鈥渟ubstitute for our human providers.鈥�

Even so, some districts see a much higher demand for in-person rather than virtual clinicians. In Broward County, Florida, where Hazel provides medical services, but not mental health support, 179 students completed a telehealth visit between August and December last year, according to district data. Over that same time period, more than 134,000 students visited a school clinic.

鈥淧arents want nurses,鈥� Cynthia Dominique, chair of the District Advisory Council and a parent in the district, told the school board in March. As a nurse practitioner, she questioned how a provider working remotely can diagnose and treat most common symptoms, like congestion or a sore throat.

鈥淚 can’t ask the registrar from the front desk, 鈥楥an you look in the kid鈥檚 mouth and tell me what you see?鈥� 鈥� she told 社区黑料. 鈥淭hey don’t know what they’re looking for.鈥�

For district leaders, however, 贬补锄别濒鈥檚 ability to keep kids from missing school provided an effective selling point.

During a 2023 meeting, Duval County School Board Member Darryl Willie said the program had saved the district 4,000 鈥渃lassroom hours鈥� during the 2021-22 school year.

鈥淲e’re talking about making sure we’re focused on reading, writing and math,鈥� he said. 鈥淭he only way we can do that is if students are in school, in classrooms, sitting in seats.鈥�

Disclosure: Walton Family Foundation provides financial support to 社区黑料.

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