Billionaire Clover Health CEO Vivek Garipalli’s Expletive-Ridden Tirade

With his health insurance company facing an army of short-sellers and investigations from the SEC and DOJ, the pugnacious chief executive responded with an epic late-night meltdown.

^Vivek Garipalli blew in like a Category 5 hurricane last Friday night, unleashing a torrent of expletives to defend his embattled insurance company, Clover Health. “Look at every single market we’re in,” he said in an 8:27 p.m. phone call that lasted for 37 minutes. “It is the lowest-fucking-cost product in every fucking market. The most fucking flexibility in every fucking market. I’d die on a fucking hill for our consumers. And you’re posting a fucking article saying we’re not.”

Garipalli, the 42-year-old cofounder and CEO of Nashville-based Clover Health, is facing a confluence of existential threats to the insurance business he started in 2014. The Department of Justice, the Securities and Exchange Commission and influential short-sellers are all digging into Clover’s business practices, including how the company incentivizes doctors and patients to buy its insurance and use its technology. Clover issued a lengthy rebuttal in response to the allegations, saying it did not believe it had violated any rules or regulations.

All of this seemed to reach a head just one week earlier, when the SEC investigation was announced. But it wasn’t a government subpoena or a recent class action lawsuit that led to Garapalli’s profanity-laced phone call to Forbes on February 12. Rather, it was a headline published 35 minutes earlier. The article in question didn’t even mention Garipalli’s name. It detailed how Walgreens Boots Alliance was an investor in a Clover Health subsidiary called SeekMedicare. Garipalli believed that the headline—“Walgreens Revealed As Investor In Health Insurance Company Under Federal Investigation”—implied that Walgreens was a direct investor in Clover, which he adamantly denied, while at the same time refusing to disclose the subsidiary’s ownership structure.

“There is no more real person than I am about this shit,” he contended, casting himself as an honest broker in a “fucked-up” healthcare market, in a meandering phone call. “And I don’t care, like, publish whatever. But don’t publish stuff without people like us being able to comment and tell you what we think.” In reporting the story, Forbes contacted SeekMedicare and received a response via email. Clover’s PR team followed up with a phone call.

When asked after the first wave of screaming if this is how he treats his employees, Garipalli continued to rant at high volume: “No!” he said, “This is why I’m doing what I’m doing. I honestly, legitimately care about bringing value to consumers.” 

The venture has also brought Garipalli considerable wealth. A month ago, he was riding high when Clover went public via a special purpose acquisition company led by its VC, former Facebook executive and “SPAC king” Chamath Palihapitiya. The SPAC listing brought Garipalli’s net worth to at least $1 billion, according to Forbes estimates. In the latest Wall Street fundraising craze, nearly 400 of these so-called blank check companies have gone public, totaling $127 billion since the beginning of 2020, according to SPAC Track. Clover is the third company Palihapitiya has taken public via SPAC, along with the Richard Branson-founded Virgin Galactic and homebuying platform Opendoor.

Over the past six years, Clover, which sells private Medicare Advantage plans to seniors, has raised more than $900 million in venture capital, according to PitchBook. Clover’s stable of well-known backers include Alphabet’s venture arm, GV (formerly known as Google Ventures), Sequoia Capital and First Round Capital. The current board of directors includes such high-profile names as Chelsea Clinton, 7wire Ventures cofounder and managing partner Lee Shapiro, and Flatiron Health cofounder and Forbes Under 30 alumnus Nathaniel Turner.

The company says its proprietary technology called the Clover Assistant is the secret sauce that helps doctors better manage patient care through personalized data. But buried in the fine print is the fact that Clover actually pays doctors $200 every time its software is used during a patient visit—twice what they are reimbursed for the visit alone. Clover says it provides a “flat fee” to use the software and doctors are not rewarded or penalized for agreeing with its recommendations. The company also says the Clover Assistant helps improve outcomes, meaning cost savings can be passed on to the consumer.

Clover posted a net loss of $363 million on $457 million in premium revenue in 2019. But during the pandemic, as fewer people required non-Covid-related medical services, its losses significantly declined, with the company reporting a net loss of $10 million on $500 million in premium revenue through September 2020 in its S-1 filing.

“I am fine if you want to, like, excoriate me based upon, like, whatever,” Garipalli said. “But do it based upon everything, not on some random comments.”

Then on February 4, Clover’s reputation took a serious hit. The aptly named short-seller firm Hindenburg Research released a scathing report alleging that Clover and Palihapitiya had failed to disclose an active DOJ investigation into the company. Hindenburg questioned whether Clover had “improperly induced patient referrals for services paid for” by the government-funded Medicare program, according to a civil investigative demand sent to a former employee.

Clover responded, noting that the company and Palihapitiya were aware of the DOJ investigation prior to the IPO, but did not consider it to be “material” on the advice of outside counsel. “Clover does not believe it is, or has been, in violation of any rules or regulations related to the inquiry,” Garipalli and Clover president and CTO Andrew Toy wrote in response. The duo acknowledged that Clover had received an inquiry from the SEC that they believed was a result of the Hindenburg report.

Palihapitiya took to Twitter: “Trust the process and the facts,” he wrote, including a screenshot of a longer statement, acknowledging that as part of regulated industry, Clover expects to get requests from the government. “For Hindenburg to take such a request for information and use it to paint a case of malfeasance and fraud is spurious,” Palihapitiya added.

Many Clover shareholders, however, didn’t see it that way. At least three class-action lawsuits were filed against the company in the past two weeks for failing to disclose this information.

The Hindenburg report also alleged that Clover Health’s New Jersey-based subsidiary SeekMedicare was misleading customers when it claimed to provide “unbiased” Medicare advice without disclosing that Clover is its parent company. Clover says SeekMedicare was set up as a separate company with its own management team, board, employees and a goal to “provide neutral, objective advice” to consumers. Beyond that, there was an unnamed corporate investor in SeekMedicare, which Forbes revealed on Februrary 12 to be Walgreens.

It was this story that unleashed Hurricane Vivek on Friday night. Clover and SeekMedicare had declined to discuss the ownership structure of the subsidiary prior to publication, apart from confirming Walgreens’ involvement. Walgreens did not respond to multiple requests for comment.

On the February 12 phone call, Garipalli also declined to discuss the financial details of the partnership on the record, but he was adamant that SeekMedicare, which is known as a field marketing organization, was key to competing against the giant corporations dominating the Medicare Advantage space: UnitedHealth Group, Humana and Aetna (which is owned by CVS Health).

Around 24.1 million seniors are enrolled in Medicare Advantage plans out of the 62 million people eligible for Medicare. UnitedHealth holds 26% of the market share, followed by Humana at 18%, according to a Kaiser Family Foundation analysis. By comparison, Clover has around 50,000 members.

Garipalli, clearly depicting Clover as a David facing a phalanx of Goliaths, expressed outrage at what he called this “cabal of healthcare nonsense, where people are trying to support United and Humana,” he said, without providing any substantiation. “They fuck over consumers all the fucking time, literally.” (He failed to note that in 2016, Clover Health was fined by federal regulators for misleading its customers into believing the company covered out-of-network services that it did not, in fact, cover, which led to customer complaints about denials of service.)

“It got me so fucking frustrated that we decided to start Seek[Medicare] where we said, ‘You know what? The only way to actually win is if we push neutrality,’” Garipalli continued. “Because we felt if all facts were laid out, we actually get more market share.”

But transparency issues remain. SeekMedicare was incubated inside Clover Health. Clover’s former general counsel Brady Priest is the CEO and Clover president Toy sits on the board. As of this reporting, there is no mention of Clover Health on SeekMedicare’s website. [Editor’s Note: After publication, Garipalli said in a statement: “I was in no way trying to hide the ownership structure of Seek. We are happy to disclose it and as soon as we get our partner’s consent, we will do so.”]

Garipalli was asked for the seventh time to address the issue of SeekMedicare’s ownership structure, but interrupted halfway through the question: “I’ve really been aggressive with you, Katie, but you don’t understand,” he conceded after more than 12 minutes of expletive-filled yelling. “What I’m trying to do at Clover is—it’s so many years of frustration.”

His soliloquy continued: “I am fine if you want to, like, excoriate me based upon, like, whatever. But do it based upon everything, not on some random comments.”

Garipalli was asked for an eighth time to explain the ownership structure of SeekMedicare. At that point, he asked to go off the record and continued talking for another 25 minutes. The phone call ended at 9:04pm.

Fourteen minutes later, Forbes updated the headline to clarify that Walgreens was an investor in a “subsidiary of” a health insurance company under federal investigation. 

At 9:24pm, the phone rang again. The screen lit up with Garipalli’s New Jersey area code.

But this time, Hurricane Vivek was far more subdued, as if he had entered the eye of his own storm. “I love you,” he said. “I love you. I think you’re amazing.” He paused for a moment, then added, cryptically, “And I’ll say this: I think we should just do the right thing.”