New Mountain Capital is making its largest platform investment to date targeting the healthcare revenue cycle management space.
A new company, called Smarter Technologies, launched today, combining three health tech companies backed by the private equity firm—Access Healthcare, Thoughtful.ai and SmarterDx.
The combined companies will provide an artificial intelligence-driven platform that aims to automate hospital and health systems’ administrative workflows and strengthen financial performance, the companies said in a press release.
With the combination of all three companies, Smarter Technologies now has 27,000 employees and 24 global service centers serving more than 200 clients, and over 60 hospitals and health systems. The company will support more than 500,000 providers, process more than 400 million transactions and manage over $200 billion in combined revenue managed annually.
The three companies recently received strategic growth investments from New Mountain Capital, an investment firm with more than $55 billion in assets under management. The new RCM company follows on the heels of New Mountain Capital's announced acquisition of Machinify, a software platform streamlining healthcare payments with artificial intelligence, following its merger of The Rawlings Group, Apixio’s Payment Integrity business and Varis last fall.
New Mountain Capital also was a lead investor in Datavant's merger with clinical data network Ciox Health, a $7 billion deal that closed in 2021.
Access Healthcare is a revenue cycle management (RCM) operations and services company while SmarterDx provides proprietary clinical AI for revenue integrity. Thoughtful.ai developed AI agents and tools focused on RCM.
The new combined company, Smarter Technologies, offers a new modular platform that combines agentic AI agents with scaled human-in-loop delivery capabilities and clinically driven billing algorithms in order to automate revenue management workflows across healthcare organizations’ operations, the company said.
New Mountain Capital tapped industry veteran Jeremy Delinsky as Smarter Technologies' CEO. Former chief technology officer of athenahealth, Delinsky also was founding chief operating officer of Devoted Health and an executive advisor at New Mountain Capital.
The company offers a flexible revenue management platform that brings together "the most proven AI technologies with the lowest cost to serve, highest quality global operations platform at scale," Delinsky said.
Smarter Technologies provides a cost-effective services-as-software offering that helps hospitals and health systems address the billions in annual administrative inefficiencies in healthcare, he noted.
"I've spent almost my entire career in some way, shape or form helping to streamline healthcare payments," Delinsky told Fierce Healthcare. "One of the things that feels different right now is that there are things that one can do with technology that we just didn't have as tools that were available to us back in the earlier days of Athena."
"What's possible today is, I think, the ability to take a lot of cost out of the administrative side of healthcare and that business problem is super interesting to me. We now use AI, and I'm thinking specifically virtual agents, agentic AI, to just take out a lot of costs and also deliver a much faster process, as far as turnaround times, and with a lot more accuracy by having technology do it," he said.
Delinsky contends that the U.S. healthcare industry has been working "for a couple decades now" to build a better connected healthcare system, "whether that be through clinical data exchange and getting all these different systems, whether those be EMRs or payers and health information exchanges and app developers to connect."
"It's really slow, and what AI could do is almost just be the integration layer that the industry couldn't come together to build themselves," Delinsky said.
Healthcare transactions and administrative operations need to be modernized and streamlined, he noted.
"We are running on transactions that have that were introduced as a result of the Balanced Budget Act of 1997. The claims transaction, the eligibility transaction, the remittance transaction, they're the same and they haven't been modified. You look at the challenges that we talk about with prior authorizations, we've had a long time for there to be a solution to that problem and I think most people are tired of waiting," he said.
Smarter Technologies can rapidly accelerate healthcare organizations’ shift to a more automated, accurate healthcare payment reconciliation model. The company will benefit from SmarterDx’s and Thoughtful.ai’s revenue integrity and quality platforms and highly accomplished teams of industry leaders, developers, data scientists and AI experts, in addition to Access Healthcare’s leading RCM service capabilities, Smarter Technologies executives said.
One concern with the growing use of AI tools among providers and payers is that the same battles over claims denials will continue to rage on, just between AI agents instead of humans.
Delinsky contends that the use of AI agents and tools can create a system that can "reason better and identify and eliminate errors" before they occur, which adds to administrative waste and costs.
"Many of those errors ultimately do, in large part, get resolved, but with a whole lot of heartache and on the part of patients," he noted.
The administrative side of healthcare happens like a slow-motion car accident, Delinsky argued. "There's a visit and then maybe there's a billing disaster that happens six months later, where a patient gets a bill, they have no idea why they got it, but if you looked at why that happened, they were a small series of administrative errors that if you could, in real-time QA [quality assurance], make sure that that error didn't happen. If you could detect it and plan for it and make sure that it doesn't happen and you have the whole process on guardrails, I think that's what success would look like in an AI world," he said.
A McKinsey study found that hospitals and health systems spend over $250 billion annually on costs associated with billing and collections, involving significant errors and inefficiencies. An American Hospital Association survey found that 50% of hospitals and health systems reported having more than $100 million in accounts receivable for claims that were older than six months.
The inefficiencies, errors and waste in the system can often lead to claims denials and delays in care. Delinsky calls these efficiencies a "deep moral injury." "It shouldn't be that expensive, and we shouldn't have to devote as much resources as a society to making the transactional side of healthcare, of managing payments work. I think that what you see today is just an unbelievable level of outrage about what this means in people's lives," he said.
Smarter Technologies' capabilities address administrative waste and administrative hassle while also ensuring that providers get paid for the services they provide, he noted. "We bring together through all three parts of this platform," he said.
Smarter Technologies offerings include Smarteraccess, a modular RCM service designed for hospitals, health systems and industry partners, combining proprietary virtual agents augmented with leading human operators to manage the complexity of healthcare; SmarterDx, an insights engine that uses proprietary agentic AI, machine learning, and over 2,200 custom algorithms to surface new revenue and quality opportunities and Thoughtful.ai, which leverages proprietary agentic agents, natural language processing (NLP), optical character recognition (OCR) and machine learning (ML) as well as advanced AI that adapts and learns from each interaction, to address all key RCM functions of a provider organization.
The company claims that SmarterDx delivers an average of $2 million in net new annual revenue per 10,000 patient discharges for clients, providing a day one, 5:1 ROI to over 40 leading health systems spanning 180 hospital sites leveraging the clinical AI offering.
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Smarter Technologies capabilities include an agentic AI platform for workflow automation called Nebula, a RCM operations model called Overwatch and Spotlight, a machine learning platform that is purpose-built for the complexity of healthcare payment systems.
Nebula, which was specifically designed for the complexity of RCM, deploys and trains purpose-built virtual agents that can automate the resolution of up to 70% of revenue cycle tasks, according to the company.
“Under a unified brand and leadership team, Smarter Technologies will leverage both human-in-the-loop administrative and clinical AI technologies combined with scaled global business process operational capabilities into one platform that automates hospitals’ existing revenue management workflows and delivers immediate ROI,” said Matt Holt, Managing Director and President, Private Equity, at New Mountain Capital in a statement. “Smarter Technologies represents New Mountain Capital's latest major platform company focused on radical modernization of the U.S. healthcare sector leveraging modern digital tools and data, at scale.”