Scoop: Olive AI plans to divest second major business line
Health care automation startup Olive AI plans to sell one of the two remaining business lines advertised on its website, per current and former employees and an internal company memo seen by Axios.
Why it matters: Olive has been shrinking since facing questions about its software's efficacy, multiple executive departures, a previous asset sale, and two major layoffs.
Details: Olive intends to sell Utilization Management (UM), its payer-facing prior authorization business that comprises tools for speeding the mostly manual process of greenlighting treatment.
- "We are starting the process of divesting our Utilization Management solution and the team that supports it," Olive CEO Sean Lane wrote in a February 2023 memo to employees viewed by Axios.
- Should the deal go through, Olive's payer-facing UM sales team would also "transition to the buyer," the memo read.
- That would impact about 100 people, a current employee says.
Where it stands: Should the deal be finalized, the bulk of Olive's remaining business would include Autonomous Revenue Cycle (ARC), its provider-facing tools for prior authorization, notice of admission, claim status coverage identification, and eligibility, per one current and three former employees.
- Payer customers who were previously using Olive's claims and remittance product, known as clearinghouse, would remain with the company, per Lane's memo.
What's next: Lane said in the memo that the timing of the transaction "varies and is dependent on a number of factors."
- He added that while the company has "had conversations with interested parties ... it would be premature to discuss specific potential buyers."
Catch up fast: Olive last fall outlined plans to sell a different set of assets to sibling company Rotera in exchange for a revenue share. That divest included the company's tools for population health management and the Medicaid and Medicare drug discount program known as 340B.
- Those tools are no longer advertised on Olive's website. The remaining solutions displayed are UM and ARC.
- Rotera, a health automation startup built out of the company's venture arm, is currently led by former Olive vice president Erick McKesson.
Flashback: Olive's ranks once topped 1,400 people.
- Earlier this month, Olive laid off 215 employees, or about 35% of its workforce, leaving roughly 630 employees.
- Last July, it laid off 450, or what then represented roughly 31% of the company.
Olive did not respond to a request for comment.