New York, February 8, 2022 – Alaffia Health, a cutting-edge healthtech company that is using proprietary AI technology to eliminate overpayments on medical claims, announced today that it has raised $5M in Seed funding, bringing its total amount of capital raised to $6.6M. The company intends to both scale its operations and expand its commercial footprint. The round was led by Anthemis with participation from investors including 1984 Ventures, Aperture Venture Capital, Tau Ventures, Twine Ventures, Plug and Play Ventures, ERA’s Remarkable Ventures Fund, and a group of other best-in-class investors and healthcare leaders.
Alaffia Health was founded in 2020 by TJ Ademiluyi and Adun Akanni, a brother and sister founding team who are using knowledge obtained from their family’s legacy medical billing business to reduce costs and waste in the healthcare system. Today, healthcare expenditures comprise about 1/5th of the U.S. GDP, and a significant portion of that spending is derived from errors in health insurance claims. It is estimated that about 80% of claims in the US contain at least one medical billing error, and $300B is lost to provider fraud, waste, and abuse every year.
Alaffia Health is working to lower healthcare costs by disrupting how and when medical claims are paid. The company offers health insurance payers (health plans, third-party administrators, self-insured employers, and stop-loss carriers) an AI-driven payment integrity service, working alongside them to review claims more thoroughly and in less time. “The issue with the industry status quo is that most medical claims aren’t fully reviewed but are paid automatically,” said Adun Akanni, co-founder and COO of Alaffia Health. “It’s likely that while maybe only half of the charges in that $10,000 bill sent to your health insurance payer were legitimate, a full payment was automatically granted. Given that 80% of medical claims contain an error, that wasted spend adds up quickly.”
Alaffia Health is redefining how claims are processed. It has introduced a more proactive system–thoroughly reviewing claims and supporting documentation on a prepayment basis to ensure that more claims are paid accurately. “Most insurance payers ideally would like to review more of their claims, but with claim volumes in the millions, it’s currently impossible to do so–industry incumbents are still reviewing medical claims and records by hand,” says TJ Ademiluyi, co-founder and CEO of Alaffia Health. The company is leveraging artificial intelligence to tackle this problem and automate the most arduous tasks. Its proprietary system allows each charge and piece of supporting documentation in higher-cost claims to be reviewed 5x faster than industry standards. This allows its customers to increase both the volume and integrity of claims that are reviewed.
Since its founding, the company has grown rapidly, scaling the size of its team by 5x and increasing its revenues by 24x in 2021 alone. Alaffia plans to use its new funding to expand its operations and further penetrate its target markets. Vinay Singh from Anthemis noted, “COVID-19 has brought added focus from all industry participants–providers, payers, and regulators–on overpayments and waste throughout the healthcare system. Alaffia Health’s technology offers a seamless, efficient solution that has an immediate impact on reducing that waste.”
About Alaffia Health
Alaffia Health is a healthtech company that uses machine learning and AI to proactively eliminate provider fraud, waste, and abuse in healthcare claims. The company offers an AI-driven payment integrity service to healthcare payers such as health plans, third-party administrators, self-insured employers, stop-loss carriers, and government agencies to eliminate overpayments and reduce healthcare costs.
Anthemis is a global investment platform that cultivates change in our financial system by investing in, growing, and sustaining businesses committed to resiliency, transparency, access and equity. Founded on three guiding principles–authentic collaboration, virtuous cycle outcomes and diversity and inclusivity–our deep understanding of markets and models, passion for emerging technology and values inspire everything we do. By creating fertile ground for a diverse group of startups, investors, entrepreneurs, institutions, academics, and visionaries to converge, we believe we can solve the financial systems most pressing challenges faster, better and for the benefit of all.