Revenue cycle management technology company R1 entered into a definitive agreement to acquire artificial intelligence-powered prior authorization automation company Humata Health.
The companies say the deal marks a “significant step” in R1’s strategy to automate the revenue cycle with its Phare Operating System (Phare OS), as Humata will expand the platform’s AI capabilities in pursuit of real-time authorizations.
“Humata significantly enhances our coverage of the authorization process, advancing our strategy to have the most intelligent and integrated pre-bill architecture in the industry," Joe Flanagan, R1 CEO, said in a statement. "Together, we will continue to shape the future of revenue cycle management and help deliver better outcomes for the patients, providers and health systems we serve.”
R1 plans to connect Humata’s technology to its Phare OS, and the Humata team will enhance R1’s agentic AI development team (the R37 innovation lab), according to the Aug. 18 announcement.
Humata’s AI-powered solution has allowed physicians to achieve a 96% first-pass approval rate while reducing write-offs by 30%, executives say. Moreover, rescheduled appointments have seen an 83% reduction thanks to the tool.
Financial terms of the agreement were not disclosed, and the deal is expected to close at the end of the third quarter of 2026.
“As a physician, I’ve seen firsthand how prior authorization delays drain providers and push an already strained healthcare system to a breaking point,” said Jeremy Friese, M.D., Humata Health CEO and founder, in a statement. “Fixing this broken process is urgent. By joining forces with R1 and its visionary R37 innovation lab, we can bring our prior authorization capabilities into the Phare OS platform, combining advanced AI and upstream intelligence with downstream execution to finally eliminate administrative friction for providers, payers, and patients.”
A recent KFF analysis of 2025 prior authorization requests found insurers denied between 12% and 18% of standard requests.
Researchers analyzed Medicare Advantage, Medicaid managed care and Affordable Care Act (ACA) federally facilitated Marketplace (FFM) websites from insurers that had at least 2.5% market share of enrollment in respective segments. They collected data from 14 unique insurers, representing approximately 71 million enrollees.
On average, researchers found 12% of standard prior authorization requests and 10% of expedited requests were denied in Medicare Advantage; 14% of standard requests and 12% of expedited requests were denied in Medicaid managed care; and 18% of standard requests and 16% of expedited requests were denied in ACA FFMs.