Boston-based Cohere Health has scored $36 million in its second round of funding less than a year after it launched.
The startup, which provides technology to speed up the prior authorization process, raised a series B funding round led by Polaris Partners, with additional participation from new investors Longitude Capital and Deerfield Management. Existing investors Flare Capital Partners and Define Ventures also participated.
The capital infusion comes three months after Cohere Health raised $10 million in a series A extension, bringing in $20 million total in that funding round.
The funds will be used to enhance the company’s digital health solutions that use automation to transform current prior authorization approaches, with a goal of driving care journeys with greater collaboration between payers and providers, the company said.
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Prior authorization is a commonly cited pain point for physicians, leading to potentially lengthy delays in care as docs await insurers' OK to proceed with treatment. Startups have been developing tech-enabled ways to ease the administrative burden on physicians.
The company says its platform differs from so-called "touchless" authorization, which automates only certain provider authorization functions. The Cohere platform automates both provider and payer steps in the process, while also generating clinical policy guidance that drives better care decisions without having to delay or deny care. Cohere then uses authorization as a trigger to engage plans, providers and patients in episode-based care paths that merge traditional utilization management, care management and patient engagement functions.
"Our clients have recognized an immediate time to value from our digital solutions, compared to processes based on outdated technology that previously took much longer and caused aggravation for providers and office staff—not to mention patients and health plans," said Siva Namasivayam, CEO of Cohere Health, in a statement.
"Looking ahead, potential CMS (Centers for Medicare and Medicaid Services) regulations and the trend towards value-based care are making care management system interoperability more imperative. Our solutions are well-positioned to help health plans meet these challenges as well," Namasivayam said.
In October, the company announced a partnership with Humana to streamline prior authorization for musculoskeletal treatments across 12 states, which encompasses 2 million members and 3,500 physician practices.
Cohere's platform allows for prior authorization approval for the entire episode of care, instead of requiring such approvals at each step. The member will be preapproved for services from the initial diagnosis through their return to health, which allows physicians to tailor treatment plans to the individual and avoid waits for approval during the treatment process.
The company reports that 90% of authorization requests receive an immediate determination, speeding access to appropriate care and a 55%-plus success rate guiding providers to higher quality treatment options, such as moving the service from inpatient to outpatient setting.
"We see a lot of healthcare companies adding automation to legacy processes that still remain fundamentally broken," said David Barrett, managing partner at Polaris Partners, in a statement. "What's exceptional about Cohere Health is their vision to reimagine the way patients, physicians, and health plans work together. Their reinvention of both care management and utilization management is truly transformational to the goal of delivering better care to patients."
As healthcare processes become more digitized, companies that are working to modernize administrative tasks, such as prior authorization, are attracting big investment dollars.
Healthcare software startup Olive developed an AI-enabled robotic process automation solution to assist healthcare workers with time-consuming tasks like prior authorizations and patient verifications. The startup has raised $385 million over the last nine months and $448 million since the company was founded.