Health tech solution company Availity scooped up Olive's artificial-intelligence-enabled utilization management solution for payers that automates prior authorization approvals.
It marks the second business unit that the healthcare AI unicorn has shed after the company laid off 450 employees nearly a year ago and the CEO cited tough economic conditions as well as "missteps" in the company's strategy.
Olive is realigning its business to focus on automated revenue cycle solutions for health systems, executives said in a statement. Olive’s Autonomous Revenue Cycle solution includes Olive’s AI-powered prior authorization, patient access, financial clearance and claims management products anchored by its clearinghouse, the company said.
"We are excited to continue building upon these foundational technologies and expanding Olive’s direct, real-time connections to deliver full, fast and efficient compensation for care at our more than 200 health system and provider customers," executives said.
There will be no impacts to Olive’s revenue cycle solutions for health system customers nor disruption to the utilization management service for health plans, the company noted.
Financial terms of the deal were not disclosed.
Availity dubs itself one of the nation’s largest real-time health information networks and handles billions of claims and data transactions between providers and health plans each year. The company provides tech-enabled revenue cycle management solutions and solutions that create a transparent exchange of information among health plans, providers and technology partners, according to the company.
The transaction, announced Monday, also includes assuming the commercial contract with Olive’s current utilization management customers and hiring key associates dedicated to the utilization management business, Availity executives said.
The company said the acquisition will strengthen its existing strategy to deliver an automated solution for end-to-end authorization transactions. That process today remains driven largely by expensive, resource-intensive manual processes, executives said.
“We saw a clear opportunity to acquire an automated, digital solution to one of the costliest and most manually driven workflows in healthcare—authorizations,” said Russ Thomas, CEO of Availity, in a statement. “This technology perfectly aligns with Availity’s vision of delivering omni-channel, multi-payer solutions to a fragmented healthcare data ecosystem. This game-changing solution will help our provider and health plan customers overcome the common barriers to ensuring timely care delivery, resource allocation, and patient satisfaction.”
Last year, Axios reported that Olive AI planned to sell a significant portion of its products and services to sibling company Rotera, citing information from current and former employees.
On Olive's website, the only two business units listed are its utilization management solution and its autonomous revenue cycle solution, its provider-facing technology for prior authorization, claims management and financial clearance, per its website.
Olive grew rapidly over the last several years. In 2021, it raked in $400 million in fresh capital to build out its enterprise AI for hospitals. The round, led by Vista Equity Partners, boosted the company's valuation to $4 billion, it claimed.
CEO Sean Lane and his team first deployed Olive in 2017 with the idea to tackle the high-volume, repetitive and manual tasks healthcare workers do every day but faster and more accurately. The company has been tackling issues like prior authorization through the acquisition of AI software provider Verata Health.
Since March 2020, the startup raised $832 million in financing, and it's raised a total of $902 million since the company’s founding in 2012.
Last year, Olive entered the operating room with the acquisition of Empiric Health, an AI-powered clinical analytics and service company that focuses on identifying unwarranted clinical variation—starting in surgery. Through that acquisition, Olive expanded its capabilities for supply chain and clinical analysis for surgeries.
Olive executives said two years ago its enterprise AI was in place at more than 900 hospitals in over 40 U.S. states, including more than 20 of the top 100 U.S. health systems.
But last summer, the Columbus, Ohio-based company announced changes to its strategy and structure, resulting in layoffs.
"Olive’s values of 'choose vision over status quo' and 'act with urgency' drove us to make significant investments across the most pressing parts of healthcare, scale our teams and move quickly to bring solutions to the market," Lane said in a message to employees posted on Olive's website last July.
Lane said at the time that Olive was experiencing many of the same headwinds as other organizations—including shifts in the industry landscape, evolving customer expectations and challenging market conditions—but also acknowledged the company needs to "reconcile missteps" that were made, he wrote.
Availity has been focused on delivering an integrated data interoperability platform. The company bought clinical data firm Diameter Health last year to build on its clinical and claims data platform.
Executives saw an opportunity to pick up Olive's technology to streamline prior authorizations.
The company's market research indicates that payers and providers collectively spend up to $13 billion every year managing an administrative process widely blamed for care delays, patient dissatisfaction, staff burnout and friction between payers and providers, executives said in a press release.
To date, automation of authorizations has been difficult because they require both administrative and clinical data, which are often stored in siloed information systems and in non-standardized formats that require manual intervention to bring together. Availity’s AI auth solution leverages automation capabilities and natural language processing (NLP) to streamline authorizations workflow. The tech can import and structure payers’ medical policies to automatically approve authorizations based on the codified medical policies and front-end capabilities enable providers to simplify authorizations workflow, according to the company.
The use of automation and NLP also helps automate and standardize clinical data collection, eliminating the multiple steps and handoffs in a manual workflow, and can reduce authorization approval time from days to seconds, executives said.