Charta Health built an artificial-intelligence-powered platform to optimize medical billing and coding. The one-year-old startup raised $22 million in series A funding to propel its growth.
Bain Capital Ventures led the series A, with Madrona, SV Angel, Refract Ventures and South Park Commons also backing Charta’s funding round.
The company has raised $30 million this year alone, including an $8.1 million seed round in March, also led by Bain Capital Ventures.
Charta plans to use the funding to scale product development, grow its engineering and go-to-market teams and complete more enterprise integrations with leading providers and payers nationwide, executives said.
Charta uses AI to automate manual patient chart review, a process that links clinical documentation to accurate coding and billing. While chart review is necessary to meet clinical quality and payer and billing requirements, it’s historically a costly and time-consuming process.
The startup works with providers to perform AI-enabled reviews of medical charts before they are submitted to identify missed coding opportunities, prevent claim denials and ensure compliance with billing standards.
Healthcare organizations across 43 states use Charta’s software to increase revenue and patient care quality while reducing administrative burden. On average, customers report up to a 15.2% increase in relative value units per patient, resulting in an 11% increase in revenue, according to the company.
“We’re working with primary care clinics that are famously are operating on half-point, one-point margins. We single-handedly turn clinics profitable with the technology that we’re using by completely changing their business,” Justin Liu, CEO and co-founder, asserts.
The company’s technology can surface revenue opportunities and coding mistakes to help cut down on claims denials. The platform audits 100% of pre-bill charts against client-specific billing and clinical guidelines. The technology also doesn’t increase head count, executives said. With 10.6x the chart coverage per FTE and a 72% improvement in accuracy over internal teams, Charta helps organizations scale their quality assurance and compliance functions without hiring additional staff or compromising on quality, executives claim.
Charta Health was founded by Liu and Scott Morris, engineers who launched startup Rockset, which was acquired by OpenAI a year ago to enhance its data processing, analytics and retrieval capabilities.
“We had a front-row seat to see the power of AI,” Liu said in an interview with Fierce Healthcare. Long before AI became mainstream, Liu and Morris’ team was developing the distributed systems and applied machine learning frameworks that now power entire industries, the executives said in a blog post.
The duo brought that expertise in AI infrastructure to Charta.
“We saw that it was a notoriously broken industry—there’s so much legacy technology, fragmented data, a ton of overhead and administrative burden, and it’s a highly inefficient industry,” he said.
The Charta team sees opportunities to use AI for back-office operations that result in fewer bottlenecks, more bandwidth and a system that supports those at the front lines of care, executives said.
Liu and Morris spent a year learning more about the industry, interviewing more than 100 healthcare leaders to understand revenue cycle pain points, and even earned their Certified Professional Coder credentials.
The executives also now require certain teams within the company, particularly engineering and go-to-market roles, to get certified in medical coding as well.
“Anytime we have engineers using AI to solve any problem in healthcare, we require them to get certified to do that work as humans first,” Liu said. “When you’re talking with billers and coders on the other side, you really need to understand how their world works and speak the same language as them. Just because we’re using AI to do it doesn’t mean we get to shortcut any of those steps.”
Charta’s executive team includes executives who have founded, led and scaled organizations across payer and provider systems, including Carbon Health, Optum and SCAN Health Plan. Carbon Health co-founder Caesar Djavaherian, M.D., joined the company as chief medical officer.
Charta is tackling a big, hairy problem in healthcare. The U.S. healthcare system loses more than $300 billion annually due to billing errors, undercoding and preventable claim denials.
There are also several industry tailwinds propelling the need for AI-enabled technologies in healthcare operations. Health systems are facing unprecedented margin pressure, workforce shortages and growing regulatory scrutiny.
There are a number of companies trying to tackle this challenge with AI, including Brellium, which raised $16.7 million in April; Dyania Health, which picked up $10 million last year; and Layer Health, which is building a core platform for AI chart review.
Charta currently works with 100 healthcare organizations including Eventus WholeHealth, Family Care Center and Preventive Measures.
The company’s automated chart review technology is beneficial for medical specialties with a high volume of patients and low reimbursement such as primary care, urgent care and behavioral health as AI can more efficiently review hundreds of patient charts, Liu said. Home health providers also can benefit from Charta’s technology as the billing process is complex and there’s a large amount of documentation, he noted.
One customer, KidsCare Home Health, a provider of pediatric home health services across multiple states, reports it saw “immediate, measurable gains in operational efficiency and compliance oversight” by adopting Charta, according to the company’s blog post.
The company reports a 25%-plus reduction in clinical management workflow duties across 19 clinical managers, an estimated 10,000 hours saved annually and expanded therapist oversight without increasing head count.
“Charta Health has completely changed the working capabilities of our clinical management team, which is huge,” Micki Roget, chief operating officer of KidsCare Home Health, said in a statement. “Nobody becomes a therapist to sit in an office doing workflow. Charta gives that time back.”
Other Articles
No Comment! Be the first one.