ORLANDO, Florida—CodaMetrix, a company that provides automated coding technology for healthcare billing and revenue cycle management, picked up $40 million in fresh funding to build out its AI-based solutions.
Transformation Capital led the financing and existing investors SignalFire and Frist Cressey Ventures also backed the series B round.
The Boston-based startup nabbed $55 million in series A funding in February 2023. In the past year, the startup has added new customers and platform enhancements.
Hamid Tabatabaie, CodaMetrix president and CEO, says he sees big opportunities to use artificial intelligence to tackle manual coding inefficiencies, improve coding quality, reduce costs and alleviate administrative burden on providers.
“Medical coding is one of the most time-consuming, understaffed and inherently error-prone parts of the health system revenue cycle. Hospitals face a high demand on human and financial resources and clinicians must often work through tedious, administrative processes away from patient care,” Tabatabaie said in a statement.
The company's AI and automation technology addresses these pain points can help shift claims data from "notoriously unreliable to clinically valuable," he noted.
"We are proud to serve leading provider organizations with a comprehensive and transformative automation solution, setting the standard for coding quality as part of our vision to change healthcare through the use of AI," he said.
CodaMetrix's multi-specialty medical coding solution is in use at more than a dozen provider organizations and health systems, representing more than 200 hospitals and 50,000 providers.
Founded in 2019, CodaMetrix has partnered with leading healthcare systems, including Mass General Brigham, University of Colorado Medicine, Mount Sinai Health System, Yale Medicine, Henry Ford Health and the University of Miami Health System.
The company's technology enables autonomous coding across care specialties including radiology, pathology, GI, surgery and valuation and management. On average, providers utilizing the CodaMetrix platform experience a 60% reduction in coding costs, 70% reduction in claims denials, a 5-week acceleration in time to cash, and improvements in provider satisfaction, quality and compliance, according to the company.
“Healthcare billing is wrought with inefficiencies and providers are drowning in the resulting administrative burden, making this the perfect area to apply today’s AI technology,” said Todd Cozzens, co-founder and managing partner at Transformation Capital, in a statement.
“The CodaMetrix autonomous coding platform can achieve the highest levels of accuracy and compliance and thus finds more missing codes which is valuable recovered revenue while also enabling doctors to focus directly on patient care," Cozzens said.