This article is sponsored by Nirvana. This article is based on a discussion with Kelvin Chan, President and Co-founder at Nirvana, Mike Dedmon, Senior Product Manager at Headspace, and Hassaan Sohail, Senior Director of Product Management at Alma. This discussion took place on October 8th, 2024 at the BHB INVEST conference.

Behavioral Health Business: In simple terms, Nirvana verifies insurance, Headspace provides mindfulness and mental health tools, and Alma works with thousands of mental health providers as a digital therapy enablement platform.

Can we break down what the hidden costs actually are, particularly in terms of assigning a dollar amount to incorrect verification?

Hassaan Sohail: The costs can be substantial and are felt across three key stakeholders: patients, providers, and payers.

For patients, incorrect insurance verification can mean higher out-of-pocket costs, which may lead to financial anxiety or even avoidance of care.

For providers, the biggest issue is dealing with denied claims. That means hiring staff to investigate and follow up, which increases operational costs.

On the payer side, if providers are calling their customer service teams to resolve issues, those payers also incur costs because someone on their end has to address the problem. At scale, that can be significant.

So, these challenges ripple across the entire system, creating inefficiencies everywhere.

Mike Dedmon: I’d add that research has shown how critical cost transparency is to patient satisfaction. In some cases, patients value knowing their costs upfront even more than having a strong relationship with their provider, which is pretty wild.

If patients don’t understand their costs or aren’t confident about their coverage, they may not even make it to the first appointment. This lack of transparency creates friction at the very beginning of the care journey, which can ultimately deter people from seeking the help they need.

Kelvin Chan: The financial impact is clear, whether it’s a denied $100 claim or an hour wasted on the phone with a payer.

But what’s harder to quantify is the impact on the patient experience. Billing issues can damage a provider’s reputation. If you check Yelp or Google reviews for healthcare practices, you’ll see that a significant portion of complaints are about billing—not the quality of care.

That reputational hit can affect patient retention and referrals, which are critical for any practice.

BHB: Mike and Hassan, both of you have experience on the payer side. Mike, you were at Athena, and Hassan, you worked at Optum, part of the larger UnitedHealth organization. Why has insurance verification remained such a persistent challenge? How are your companies addressing it today?

Dedmon: For behavioral health specifically, the cost of services is lower compared to areas like orthopedic surgery or emergency care. Because behavioral health claims have a smaller dollar value, they often don’t get prioritized by payers in the same way.

If you’re a provider trying to verify benefits on your own, it can take a huge amount of time to make sense of what a payer sends back. For us, having a dedicated partner like Nirvana, whose sole focus is on solving this problem, has been a game-changer.

Sohail: The core issue lies in how benefit information is created and shared. Payers are working with legacy systems, often from the 1980s, while benefits have grown increasingly complex.

When we check eligibility, we may get most of the information correct, but there are always gray areas. For example, data might be inconsistent or incomplete, and we need to parse through it to figure out what’s accurate.

One best practice is to verify eligibility as soon as a patient joins a practice and then recheck it periodically, especially right before each appointment. We’ve found that running multiple checks allows us to track changes in coverage and flag issues proactively.

Chan: I completely agree. To make it real for the audience, let’s talk about something like 271 responses, which are the standard way to retrieve benefit information from payers. These systems are archaic.

For example, if Optum carves out behavioral health benefits to Magellan, it may not be obvious on a patient’s insurance card. Your intake coordinator might look at the card and assume everything is handled by Optum, only to discover later that your practice doesn’t have a Magellan contract.

Identifying these carve-outs buried deep in outdated systems can save you from denials and surprise bills. But it’s not easy.

BHB: As insurance verification tools have evolved, what benefits have you seen for both your business and your patients?

Sohail: The biggest benefit is being able to estimate costs before care is delivered. Behavioral health patients often experience anxiety about expenses, so giving them accurate information upfront is incredibly valuable.

That said, we’re not perfect. There are still instances where the system isn’t 100% accurate. But even getting it right most of the time has been a huge improvement for both patients and providers.

Dedmon: I’d echo that. Cost transparency is foundational to establishing trust with patients. It helps set expectations about care plans and ensures that patients feel confident in their ability to afford treatment.

We’ve also seen better adherence to care plans when patients understand their financial responsibilities from the start. That’s a win for everyone.

Chan: One thing I’ve learned from working with providers like Mike and Hassan is how critical it is to communicate cost information effectively. Even if we’re 100% accurate about a patient’s deductible, only about half of Americans actually know what a deductible is.

Our goal isn’t just technical accuracy; it’s also about presenting information in a way that patients understand.

BHB: Shifting gears, we’re seeing more mental health appointments booked online. This introduces the abandoned shopping cart problem common in digital marketplaces. How does immediate verification during booking impact patient conversion and revenue?

Dedmon: It’s huge. Behavioral health has unique challenges, but we’ve seen great success in reducing cancellation rates by arming patients with the information they need upfront.

Our cancellation rate is around 15%, which is significantly lower than the industry average of 20%. Providing cost clarity during the booking process has been a big factor in that success.

Sohail: When patients know their coverage is verified and they can afford the care, they’re more likely to follow through. At Alma, we’ve also introduced initial 15-minute consultations, which we don’t charge for.

This gives patients a chance to ensure they’re comfortable with a provider before committing, which has helped reduce no-shows and cancellations.

BHB: The cost of claim denials is substantial, yet many providers assume it’s just the cost of doing business. Kelvin, can you share your perspective on this problem across the industry?

Chan: Denials are often treated as unavoidable, but they’re largely preventable. Training intake coordinators to navigate payer systems is a challenge. It takes years to build the expertise needed to spot things like managed Medicaid carve-outs.

At Nirvana, we aim to codify that expertise into tools that make verification straightforward. For example, our software can identify patterns that indicate when a plan is managed by a specific third party, helping providers avoid denials before they happen.

BHB: Proactive versus reactive claims management—what’s the best approach?

Sohail: The solution lies upstream. Solving issues at the point of verification is far more cost-effective than dealing with denials after care has been delivered.

Dedmon: I completely agree. Pre-claim work is faster, cheaper, and more effective than post-claim work. Behavioral health, in particular, has an advantage because we often know the type of care we’ll be providing, making proactive management much easier.

BHB: Let’s close with a big-picture question: How are your organizations working to improve accessibility to care?

Dedmon: We focus on making it easy for patients to understand their coverage and costs. It’s about reducing barriers so they can start their mental health journey with confidence.

Sohail: For Alma, it’s about meeting patients where they are—whether that’s online, through payers, or other channels—and ensuring we have a diverse network of providers to meet their specific needs.

Chan: Our role is to eliminate eligibility headaches so providers like Headspace and Alma can focus on delivering care. If we’re doing our job, they don’t have to think about insurance at all.

With Nirvana’s automated benefit verification APIs and technology, healthcare providers finally have a simpler, smarter, and shockingly easy way to check patient benefits with 94% accuracy without consuming their staff’s time and resources. To learn more, visit: https://www.meetnirvana.com/.