Blue Orca Capital, an Austin, Texas-based short-seller firm, tried to drive the price of Teladoc Health down in February by suggesting, based on its reading of social media and web forum posts, that some therapists available through BetterHelp are using AI systems to do their work.

Law firms such as Block & Leviton and Pomerantz responded to the Blue Orca commentary by distributing press releases seeking investors who might be interested in suing Teladoc.

Teledoc has emphasized that BetterHelp counselors are prohibited from using AIs to assist with counseling and that it rejects the Blue Orca allegations.

Andrew Michaelson, a lawyer representing Teladoc, sent Blue Orca a letter objecting to the firm's commentary.

"To be clear, BetterHelp expressly prohibits therapists from disclosing any member personal or health information to third-party AI," Michaelson writes in the letter. "BetterHelp has a trust and safety team dedicated to the detection and prevention of non-compliant use of AI and, if anything, has structured its platform (and its incentives to therapists) to promote live video calls over asynchronous messaging. BetterHelp's privacy policy provides further disclosures to members concerning its AI practices."

BetterHelp has had to face intense competition from other telehealth services providers and, especially since the end of the peak COVID-19 pandemic period, in-person providers. But it still managed to generate $1 billion in revenue in 2024 from providing therapy for an average of about 405,000 paying users per month.

A review of social media posts on Reddit.com suggests that, even if Teladoc is incorrect and it's possible that BetterHelp counselors have at least occasionally used AI to provide counseling, web users generally seem to be neutral or warm toward the idea of AI-assisted counseling. Some patients have occasionally criticized specific live-human BetterHelp therapists in connection with issues such as punctuality. Others have complained about therapists sending emails that appear to be written by AI. But few Reddit users, if any, are complaining about encountering AI therapists posing as live humans through BetterHelp or other services.

Instead, Redditors have started and participated in threads talking about how much they like AI therapists and asking for AI therapist recommendations.

Nine months ago, for example, participants in Reddit's r/therapy subreddit responded to one request for AI therapist recommendations by referring the user to Heartfelt and Earkick.

Four months ago, participants responded to a similar query by referring the user to ChatGPT, Claude 3.5 sonett and Serena.

The backdrop: A California assembly member recently introduced a bill that would forbid health care professionals or organizations from implying that an AI is a licensed, live-human health care professional, such as a physician, nurse or psychologist.

Related: California may stop AI bots from calling themselves doctors

But Unmind, a provider of workplace mental health programs, recently suggested that AI-based systems will be helping more and more employers supplement traditional mental health support services.

Researchers reported in a paper published in 2024 that ChatGPT earned better results on a social intelligence screening test than live humans studying to be psychologists.

Researchers in Hong Kong reported this week that an AI chatbot was as effective as a traditional nurse hotline at reducing anxiety and depression levels in the general population,

What it means: For employers and their benefits advisors, the takeaway may be that topics such as how to add AI-based systems to provider networks and how to pay for AI-generated care may soon move from being conversation starters to being core benefits management concerns.