This Startup Raised $26 Million To Help People Find In-Network Therapists

Headway, a startup that makes it easier for therapists to take insurance and for patients to find them, raised $26 million in Series A funding, the company announced Wednesday.

Many therapists don’t accept insurance because it pays far lower rates for mental healthcare compared to physical care. Others may be open to seeing patients at lower rates but still don’t take insurance because, working on their own or in a small practice, they don’t have staff to manage the paperwork needed to get paid. 

The health insurance bureaucracy is set up for large healthcare institutions “that can afford to employ legions of billers,” said cofounder and CEO Andrew Adams. Headway helps by handling reimbursements and other office tasks for therapists and, through the company’s contracts with insurance companies, allows therapists to see patients as in-network providers. 

“If you make accepting insurance patients easier,” he said, “you can radically increase the participation of therapists.” Accepting insurance patients allows therapists to grow their practice, said Adams, and to start seeing patients who couldn’t afford to pay out-of-network rates. With more therapists taking insurance, more people who couldn’t afford an out-of-network provider will be able to get care.

The investment, which will allow the New York-based company to expand nationally, was led by venture firms Thrive Capital and GV (formerly known as Google Ventures). IA Ventures and GFC also contributed, as did Accel, which took the lead in Headway’s $6 million seed round in 2019. 

Headway is positioned to quickly expand across the country because it works with therapists who are already licensed and practicing. Its scalability appealed to Thrive Capital, said Kareem Zaki, a partner at the firm, in an emailed statement. “We urgently need new, but more importantly, affordable solutions,” said Zaki, who joined the board as part of the investment. Expanding Headway, he said, will help people across the country “find affordable and readily available therapy.”

Providers don’t pay for Headway directly, but the company takes a cut of insurance company payments. Of that amount, Headway can keep more than a traditional hospital or clinic because its software automates what hospitals and clinics have to pay staff to do.

Headway’s search tool allows patients, after entering their insurance information, to search for providers who accept their health plan filtered by ZIP code, specialization and other preferences. They can also see their copay for a provider and book an appointment on the site.

Adams was inspired to start Headway by his experience of looking for a therapist when he moved to New York City in 2015. He wasn’t able to find an affordable provider because none of them accepted his insurance. “This is not a problem unique to me,” he said. “This is the defining problem” in mental health. Headway has collected its own data to back up that claim: In 2018 it surveyed 1,000 therapists in a Psychology Today directory, finding that 70% were not accepting new patients on insurance. 

Headway launched in 2018, raising $6 million in seed funding the following year. It began signing up therapists and other mental health providers throughout New York state. It now works with more than 1,800 providers, two-thirds of whom are only accepting insurance through Headway.

Now, said Adams, “providers can bring aboard patients who they typically would have to say ‘no’ to. Now those therapists get to say ‘yes’ to those patients.”

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