Insurtech startup Opkit launches out of stealth with over $1M in funding to provide health insurance verification for telehealth companies
Collecting health insurance details and verifying coverage is a complex, manually-intensive process that healthcare providers must perform before each appointment to ensure payment. Unlike brick-and-mortar providers, which are regional and only deal with a handful of different insurance companies, telehealth companies serve patients from many regions and consequently deal with many different insurance companies and plans.
This, along with the fact that telehealth companies are unable to collect patients’ physical insurance cards and generally see more patients overall, makes accepting insurance, particularly challenging for this new kind of provider. Currently, there is no way for telehealth practices to easily look up insurance coverage information for new patients, particularly when they could be from anywhere in the country. That’s why one insurtech startup is on a mission to address the critical pain points facing telehealth companies.
Enter Opkit, a New York-based insurtech startup that lets providers look up a patient’s insurance and coverage status in minutes. Opkit is a Y Combinator startup founded by early engineers from Brex. Opkit is a modern, developer-friendly health insurance verification platform used by some of the top healthcare organizations.
Today, Opkit emerged from stealth with initial funding of more than $1 million to enable telehealth companies to quickly verify patients’ insurance and fetch relevant benefits, including copays and deductibles. The round was led by Global Founders Capital, Mischief (Plaid founder Zach Perret’s fund), Socially Financed, Y Combinator, and Rex Salisbury, a former partner at Andreessen Horowitz.
Founded by co-founder and CEO Sherwood Callaway and CTO Justin Ko, Opkit is tackling the massive problem of insurance verification, focusing on telehealth companies and virtual medical practices that experience this problem more acutely than brick-and-mortar healthcare providers.
Currently, the telemedicine market has recently reached 80% adoption, according to a just-reported study by Rock Health. The new report reveals that telemedicine is the preferred channel for prescription and minor illnesses. The global telehealth market is also projected to grow at a rapid rate, reaching a CAGR of 24% from 2023 to 2030. This growth means administrative tasks related to insurance, which are time-consuming and employee-intensive, have become a major problem for the healthcare industry.
“Telehealth companies are caught between a rock and a hard place when it comes to insurance,” said Sherwood Callaway, co-founder and CEO of Opkit. “Patients want to use their health insurance to cover rising healthcare costs. They will forgo services that don’t have coverage. But for telehealth companies, accepting insurance is a huge operational burden.”
“Opkit’s platform makes the insurance verification process faster, more accurate, and more efficient so practitioners can scale their operations and give patients better visibility into pricing and fees. Everyone wins,” Callaway added.
With Opkit, the health insurance verification process can be performed in seconds and with just a few clicks, as opposed to taking an hour or more in a tedious process involving multiple apps, spreadsheets, and often phone calls. Opkit’s software automates most of the steps involved in insurance verification and automatically repeats this process for existing patients prior to each follow-up appointment.
Opkit’s dashboard allows telehealth employees to perform eligibility checks, or inquiries to insurance companies about specific patients’ plans. A range of eligibility-related features have been automated for simplicity and speed, including determining whether a patient’s insurance plan is active, in- or out-of-network and whether it includes benefits such as copays and deductibles. This information is used by staff to determine if a patient’s insurance will cover some or all of the cost of services.
“Opkit fills a critical need that has only become more important as telehealth has become universally accepted,” said Reshma Khilnani, a former Y Combinator visiting partner and three-time healthcare startup founder whose current company is integrated with Opkit. “Understanding the eligibility status of a patient as quickly as possible is key for telehealth companies to manage their day-to-day operations, collect payments and grow.”
“Telehealth is an entirely new business model that stands to make healthcare more inclusive, accessible, and affordable. But providers need updated tools that are built for a virtual care environment. That’s why we built Opkit–to reduce the administrative burden for this next generation of healthcare providers,” Ko said.