Understanding Your Client's Mental Health Insurance Benefits

by Leila Ghaznavi

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Mental healthcare and mental health has always been a stepchild of insurance. A lot of the rules that were mandated for health insurance were never applied to mental healthcare. Why? Because they didn't think of mental healthcare as an equal part of healthcare and that created a lot of inefficiencies within the system. The following is a brief guide on how to get the most of your client’s mental health insurance benefits with Nirvana Co-Founder and CEO, Akshay Venkitasubramanian.

Why is mental healthcare insurance so challenging?

The first inefficiency was in the 2000s when George W. Bush came into office and passed a law mandating that everybody use electronic health records. It excluded mental healthcare so providers were able kept their paper records. Then in 2009, the Health Information Technology for Economic and Clinical Health (HITECH) act was passed to further accelerate electronic data exchange between providers and insurers, however this also excluded mental health. So there hasn’t been a push to digitize on both sides.

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The result of all this inaction was that mental health insurance became very complicated for therapists and clients to understand. Who is covered by this insurance? What coverage is the insurance company providing? Are they going to send payments via paper checks or direct deposits? All this uncertainty and lack of digital processes made insurance extremely confusing and cumbersome. The end result of this was that if you were a client trying to use insurance, you could call and call and call your insurance company and you’d never be able to nail down exactly how much each session was going to cost you.

Is this what inspired you to create Nirvana?

Yes! That's where Nirvana came in. We looked at that chaotic situation and realized we could simplify it. Nirvana collects and organizes mental healthcare information and presents it in an easy-to-understand for clients and therapists.. When a client or a therapist checks their benefits on Nirvana, using our coverage calculator, we show them how much their coverage is really worth in the simplest of terms.

How does Nirvana simplify communication?

For example: “You're deductible is $2,000. That means that you're paying out of pocket up to $2,000 and the insurance company doesn't owe you a single dollar until your deductible is paid. We expect, based on data we've collected from insurers, that you will hit this deductible in 10 sessions.” This gives clients clarity that if they go to therapy for two months, for example, they should expect their first check from their insurance. That kind of certainty brings stability to the way clients plan their care. They're not worried about bills adding up. 

How much will I be reimbursed for therapy?

Most insurance companies tell you that they will give you 130% of the Medicare amount. However, the Medicare amount changes based on the zip code in which the service is rendered. It's called a Metropolitan Statistical Area, or MSA, and every MSA has a different Medicare rate. So you practically have to be a genius to download the Medicare file, figure out what the MSA is for your therapist’s ZIP Code, then find out the exact CPT code or procedure code that your therapist is using for your care, then figure out what that Medicare is going to pay for that procedure, before finally calling the insurance company back to ask them, what percentage of that are they going to pay on top of your exact MSA code. How many people are going to do all that? Zero.

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Nirvana does eligibility checking and calculating patient responsibility automatically. We tell users, “Based on our data we've collected from insurers, and the data that we have available to us, you will meet your deductible in 5 sessions then you should expect to start receiving a reimbursement of $100 to $120 per session from this insurance company.” That client can then go into their next session and say, “Okay, this session, I'm paying my therapist $200 but I know that I'm going to get a check back within the next few weeks.” 

Do you help clients understand their insurance benefits?

Yes, we also help them understand the full scope of insurance plans. There is a specified maximum amount that a client can spend before the insurance company starts covering all expenses in full. That's called Stop Loss or Maximum Out-of-Pocket. This is a provision that is supposed to keep people from going into deep medical debt. When a client hits their Out of Pocket Maximum, the insurance company will reimburse them the entire 100% of the cost of their care. However, most people will not hit this as it’s incredibly high, typically in the range of $20,000 to $30,000 for family plans, or $5,000 to $15,000 for individuals. But if a client does hit that cap we tell them, “We see that you are having a difficult year. You’ve reached your out of pocket maximum so your care is completely covered by your insurance company.” We provide clarity into how insurance really works so the therapist and the client don’t have to waste their time trying to decode benefits. What’s more, we use easy to understand language. We don’t use jargon like deductible, co-insurance, stop loss, etc. We break it down into clear actions: How does this work? What does it mean to you as a client or therapist? Where are you in your therapy journey this year?

What mental health insurance plans does Nirvana support?

We are an electronic product company. We support any healthcare company that provides information through an electronic response and we have a long list of supported companies on our website.

What’s the biggest misconception about mental health insurance benefits?

Therapists tend to think that all insurance companies don’t pay a fair rate. That’s not necessarily true. Insurance companies change the amount that they pay for a session based on who is providing that insurance. Meaning that the rate will change based on whether the insurance is provided by the employer, Medicare, Medicaid or the ACA Marketplace. That creates a lot of variety in how much a therapist or client can expect to be reimbursed for a particular session. For example, we have some insurance companies that reimburse employer-based insurance members up to $300 per session. That's a lot of money. However, all these insurance cards look the same, and they don’t tell the therapist where the plan comes from– the employer, a non-profit, the client, etc. And depending on the plan that was purchased, the amount of money they are allowed to get back per session can vary widely. Nirvana helps pull back the curtain on what the rate options are for each client so therapists can engage their clients in a financially responsible way.

How does Coinsurance affect mental health insurance?

Coinsurance is the amount a person pays for covered healthcare after a client meets their deductible. Typically, up to 50% of a session can be a coinsurance. What that means is that after a client meets their deductible, the insurance company will pay 60%, and the client will pay 40% of the cost for each session. What Nirvana does is we determine the amount that a client’s insurance company considers to be fair market value that session and then we do the math to equate what that coinsurance percentage actually means in dollars. For example, the coinsurance is 40%, does that mean the client should expect to pay $10, $20, or $100 per session after they meet their deductible? Nirvana is able to tell clients and therapists in clear straightforward language exactly what is owed for each session before and after the deductible is met, without any confusing jargon or complicated math equations.

How does Nirvana expedite payments for out-of-network clients?

Without Nirvana, if a client wants to submit a claim to their insurance they will need to get a Superbill from their therapist. Then go find their insurance’s CMS 1800 form, fill it out, go to the post office, buy postage, mail it, then wait patiently for their insurance company to read their mail, process it, then send them a response back in the next 90 days. That is the most cumbersome and inefficient process in the entire world. Everyone is busy, and not everyone enjoys going to the post office or learns how to fill out a CMS 1800 form correctly. 

Nirvana does two things. One, we use the healthcare infrastructure to file forms electronically. We tell insurance companies, I am going to use the private data exchange you have set up for providers, because those providers have authorized us to file claims on their behalf. But we are going to use it to file claims for our out-of-network clients. This allows us to automatically file claims on the same day without putting clients through the rigor of the typical out-of-network claim process. 

Two, we are able to provide transparency into every insurance claim processed similar to an Amazon order. If a claim is filed electronically the insurance company should acknowledge receipt within 72 hours. However, insurers might not say whether the claim was covered, denied, paid, etc. for 2-4 weeks. Fortunately, Nirvana's system keeps an eye on the claim until we know what the insurer's decision is. As soon as we know, we instantly share it with the therapist and their client. This allows both the therapist and the client to know whether the insurance company will cover the session and exactly how much they will be covering as soon as possible. Simple, clear, concise, and understandable – that’s mental health insurance with Nirvana.

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Akshay is founder and CEO of Nirvana. Before starting Nirvana, Akshay worked at Mount Sinai Commercialization Team and prior to that was a Product Lead at Remedy Partners, and was a Consultant at Deloitte.