After quadrupling business over the past year and landing a major distribution partner, Columbus health IT startup PriorAuthNow has raised another $25 million in venture capital.
The software platform that automates the insurance prior authorization process for medical procedures has $61 billion of clients' net patient revenue flowing through it – more than the total for all Ohio hospitals, for example. PriorAuthNow's revenue is not disclosed; typically software companies are paid on a subscription basis or a percentage of transactions.
Insight Partners, a New York City VC and private equity firm, led the round. Also participating were Atlanta-based Panoramic Ventures and Silicon Valley's Health2047 Capital Partners LLC. Health2047 also just invested in Columbus-based AndHealth, the new startup by CoverMyMeds co-founder Matt Scantland.
Proceeds go toward new hires, including engineers and sales staff to increase the startup's client network of hospitals and insurers. Today the company has about 70 employees.
That expansion is helped by a strategic alliance announced in January with Availity, the largest health IT network connecting healthcare providers and payers. The 20-year-old private equity-backed company is based in Jacksonville, Florida.
"We’re taking on the arduous challenge of creating an intermediary between these parties by establishing connections with both sides of the system," co-founder and CEO Joe Anstine said in a news release. "Through these more meaningful interactions, we are ultimately helping patients achieve a higher level of care, which has been our driving mission."
Much as CoverMyMeds did for filling prescriptions at pharmacies, PriorAuthNow is taking on a frustrating, slow, fax-driven process for hospital billing departments. The company reports its software cuts work required to four minutes from 45, and cuts more than six days off the turnaround time for an insurance approval.
"The current state of prior authorization is archaic," Jon Rosenbaum, Insight managing director, said in the release. "PriorAuthNow is improving this outdated system. ... This also ultimately drives efficiency for patients and doctors, optimizing treatment and the doctor-patient relationship."
Rosenbaum joins the company's board as part of the transaction. Insight Partners owns Veeam Software Corp., $5 billion data backup and recovery firm with a significant Columbus office that is seeking a U.S. headquarters as it prepares to go public.
Anstine, who previously started a data analytics company, and obstetrician Dr. Amol Arora founded PriorAuthNow in 2016. Since inception it has raised $57 million.
The company has left offices in the Crosswoods area of north Columbus and a second hub in Atlanta after going remote in the pandemic. Anstine was not immediately available for comment.
