Data automation company veda closed on $45 million in fresh funding just in time to build out new capabilities to coincide with No Surprises Act mandates.
The funding, which will allow veda to take some significant steps as it works on solutions to ease the costly administrative burden on healthcare providers and health plans, was led by Oak HC/FT.
The funding also amounts to a seal of approval from that leading healthcare funding powerhouse, Meghan Gaffney, veda’s co-founder and CEO, told Fierce Healthcare.
“We have this big vision and Oak invests in big visionary companies that are going to change the way healthcare works,” she said. “Getting their sign-off and support in the market to say: ‘Yes, we believe in this technology. We believe in this company. We’re going to make sure that capital isn’t an issue for them to grow.’ Think of the kind of catalyst moment not just for us but for AI and healthcare.”
“This is really a statement from Oak that this is an emerging market and that they are going to be in front of it,” she said.
Oak is a leading venture growth-equity fund that invests in healthcare information and services and financial services technology. The Greenwich, Conn.-based company has $3.3 billion in assets and offices in Boston and San Francisco.
The funding boost follows a year of rapid growth. Gaffney reported a 20x revenue increase over the last 18 months, and the company expects its customer base of health plans, providers and partners to increase sevenfold by the fourth quarter of 2022.
The company is aiming to achieve 1 billion hours of automation by 2025 to streamline healthcare administration.
The funding will allow veda to increase marketing and enhance its offerings as it continues to research how artificial intelligence can help resolve problems and inefficiencies in healthcare administrative functions, help patients gain better access and boost bottom lines.
Gaffney said the company, based in Madison, Wisconsin, will double its employee numbers to 90 in several areas, including research, customer success and marketing.
“We needed capital to be able to invest in different modules for our platform to solve additional problems and help create additional efficiencies,” Gaffney said. “We have a pretty robust customer success team that we continue to build out.”
It will also allow veda to quickly address regulatory requirements of the No Surprises Act—bipartisan legislation that restricts excessive out-of-pocket costs to consumers from surprise billing and balance billing, according to a press release announcing the new funds. Starting Jan. 1, 2022, the law will require that all provider directory updates be processed in under 48 hours.
Veda offers the only AI platform where payers can transform and ingest provider rosters rapidly, reducing turnaround times from weeks to hours, according to the company.
The company’s technology “will fundamentally change how the healthcare system operates by automating processes, increasing accuracy and reducing costs that have existed for decades,” said Andrew Adams, managing partner and co-founder at Oak HC/FT, who will join veda’s board.
Getting the word out, Gaffney said, is a key to success.
“We need to let people know that this system is here,” she said. “That’s been really important to us, and it hasn’t been a story that we’ve had the opportunity to sell from a capital perspective and tell in our own words until now. We’re really excited to have the opportunity to have that brought into the conversation.”
Veda has supported the country’s largest health insurance companies in their efforts to automate administrative processes and in 2021 will save 500,000 hours for health plans processing provider data.
For a Blue Cross MinuteClinic, veda increased the quality of its data from 43% to nearly 90% within six weeks of implementing the system after a Centers for Medicare and Medicaid Services (CMS) audit found the clinic’s data was inaccurate, Gaffney said.
They would have had to hire between 25 and 50 employees to take care of the problem and “they couldn’t afford it,” she said.
“They were also able to entirely avoid any new hiring,” Gaffney said.
Artificial intelligence, she said, “is a tool like any other tool that we have available to us.”
“I think the way that healthcare looks 10 years from now will be entirely different from how we experience today,” she said.