Anomaly, a startup using artificial intelligence to improve payment accuracy in healthcare, has raised $17 million in series A and seed funding.
Founded in 2020, Anomaly’s platform uses machine learning to search for irregularities in medical billing to prevent overpayments and billing errors, reducing friction between payers and providers in the claims payment process.
The series A funding round was led by RRE Ventures and included participation from Link Ventures and previous investors Madrona Venture Group, Declaration Partners and Redesign Health.
Excess spending, according to Anomaly co-founder, President and Chief Operating Officer Jacob Shiff, frequently contributes to payer-provider friction when insurance companies overpay the provider and then attempt to claw back the overpayment after it’s discovered—the “pay and chase” method.
Value-based care models, where the claims payment process requires payers to code in contractual carve-outs and exclusions for individual provider partnerships, can introduce further complexities that increase the probability of inappropriate payments, Shiff told Fierce Healthcare.
According to a 2019 report published in JAMA, such payment errors make up more than $300 billion annually in unnecessary spending, about 10 cents to every dollar spent.
“Imagine if that was the case with your credit card—if every month you got your statement and 10% of your charges were just incorrect,” Shiff said. “That’s really the status quo in healthcare today.”
RELATED: Analytics, precision medicine key to value-based care, but health systems struggle with funding: KLAS survey
Using machine learning, Anomaly’s AI sifts through millions of claims and learns patterns of irregular spending as new data roll in. The company has two products, Anomaly Prevent and Anomaly Preempt, which notify providers of billing errors in real time and search for ways to minimize future claims leakage, respectively.
Anomaly’s current team of 12 employees boasts some big names, including Jeff Alter, former CEO of UnitedHealthcare commercial and executive vice president at Anthem, who now serves as Anomaly’s chairman, as well as the head of engineering of Foursquare and Redesign Health and the founder of Discovery Health Partners.
"Health insurers are under immense pressure to both control costs and maintain great working relationships with providers, but nothing complicates those relationships more than conflicts over reimbursement," said Alter in a statement. "The improper payments issue is constantly evolving and requires continuously learning AI to solve, which is why Anomaly is best positioned to make a difference in the market."
The $17 million raised in the series A and seed rounds will go toward expanding their team, developing the technologies and partnering with more payers, the company said.
Shiff wouldn’t reveal what payers Anomaly has partnered with or how much money those companies have saved in overpayments, but he said the startup’s early partners are “really excited” by the results so far.
“Our vision is that Anomaly is an integral part of the healthcare payments system, seamlessly operating, running our analytics to really enable healthcare payments to flow with precision,” he said. “And by working with some of the largest-scale players in the healthcare ecosystem, we can become a really turnkey part of that system.”