Ex-Olive exec gets $25M for Humata Health
Former Olive AI president Jeremy Friese has raised $25 million for prior authorization startup Humata Health, he tells Erin exclusively.
Why it matters: After selling a former iteration of Humata (Verata) to now-shuttered health tech unicorn Olive AI in 2020, Friese is at it again with what one investor calls "Verata 2.0."
Zoom in: Blue Venture Fund and LRVHealth led the unlabeled round.
- Optum Ventures, .406 Ventures, Highmark Ventures and VentureforGood participated.
- Funds will fuel Humata's expansion from the provider to the payer side of the health care market.
- Friese declined to say when Humata would raise next but said the company was profitable.
How it works: Winter Park, Florida-based Humata is built on the backbone of Friese's former prior authorization (PA) startup Verata Health, which Olive AI acquired in 2020 for a reported $120 million.
- Humata last fall bought back those assets.
- The company today is "a combination of what we've built and acquired," per Friese, "and we've improved the technology."
- That technology connects to electronic medical records to help automate the entire PA process, identifying the medical necessity rules and the documentation that meets them, "so that just like my high school son can show his work in algebra, we show it to our customers, who then submit it," Friese says.
What they're saying: "Prior authorization represents in our minds a point at which there's a high degree of friction for payers and providers ... and eventually a point at which they can agree," says LRVHealth managing partner Tripp Peake, whose firm was also an investor in Verata.
- "You think of a point at which you could get to something like an automated handshake" with technology as what Humata provides, he adds.
- Friese brought learnings from his Verata experience and, "as he started Humata, I think he was getting at Verata 2.0.," Peake says.
The latest: Humata has 25 health system customers, including Highmark and Allegheny Health System, per Friese.
Driving the news: The Centers for Medicare and Medicaid Services (CMS) in January required insurers to speed prior authorization decisions, setting timelines of 72 hours for urgent requests and seven calendar days for standard requests.
- And Congress last week mandated Medicare Advantage plans to create electronic PA systems to streamline coverage decisions.
Between the lines: In response to surveys compiled for a 2021 report by the Medical Group Management Association, 91% of providers said the overall regulatory burden on their practices rose over the past year.
- And they identified PAs as the worst part.
State of play: Prior authorizations are one piece of a complex health care administration puzzle that dozens of startups are attempting to tackle with AI.
- Anterior (FKA Co:Helm), an AI-powered health care administration startup, last week raised a $20 million Series A.
- Health payments software company Waystar this month went public at $968 million, the best showing the health tech sector has seen since 2022.
- Cohere Health, a prior authorization automation company, in February raised an unlabeled $50 million.
