HiLabs, a company that uses AI to manage dirty data, has raised $39 million in Series B funding, the company announced Thursday.
Bethesda, Maryland-based HiLabs was founded in 2014 and primarily serves health insurers. Its cloud-based MCheck platform cleans healthcare data in order to reduce operational costs and improve patient outcomes. The company has products for provider data accuracy, clinical results, payment accuracy and value-based care. Dirty data is an expensive problem, costing the healthcare industry more than $300 billion annually, according to Amit Garg, CEO and co-founder of HiLabs.
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“Cleaner data not only directly improves health insurer bottom lines by reducing operational costs and increasing member satisfaction, but also addresses many challenges that patients face by improving provider directory accuracy, reducing surprise billing, or providing more targeted care management to improve health outcomes,” Garg said in an email.
The Series B funding round was led by Denali Growth Partners and Eight Roads Ventures and included participation from F-Prime Capital. In total, HiLabs has raised about $41 million, Garg said.
Denali Growth Partners invested in HiLabs because of the promise it shows with AI.
“While many discuss the potential of AI, particularly in the healthcare ecosystem, HiLabs is demonstrating real-world impact by leveraging advanced AI techniques to ingest and cleanse data for four of the nation’s top ten health payers, along with numerous regional players,” said Jesse Lane, founder and managing member of Denali Growth Partners, in a statement. HiLabs declined to share the names of the payers it serves.
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The company plans to use the financing to scale its provider solution to more health insurers and grow its clinical solution, Garg stated.
“We additionally hope to further develop our provider product through the incorporation of additional features that help health insurers make sense of provider contracts and connect directly with providers to address provider directory quality at its source,” he said. “We also hope to use these funds to enhance our clinical data product, which enables health plans to ingest and standardize unstructured clinical data, such as physician notes, to enrich their clinical data platforms.”
HiLabs’ fundraising announcement comes as health plans are facing regulatory changes. For example, three senators recently introduced the Requiring Enhanced and Accurate Lists of Health Providers Act, which would strengthen requirements for insurers to maintain accurate provider directories.
In addition, AI has been taking the healthcare industry by storm, though there are still many questions surrounding the technology, according to Garg.
“There has been very little evidence of such technologies leading to any actual benefit to date. We suspect this may be due to dirty healthcare data feeding into these models, which can then ‘hallucinate’ or present incorrect information as fact. This can have tremendous negative consequences with regards to trust in AI in the healthcare sector, which is incredibly important when lives are at stake. In contrast, HiLabs has been able to show tangible benefit from applying advanced AI to solve the data quality problem in healthcare,” Garg declared.
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