R1 has agreed to acquire Humata Health, an AI-powered prior authorization technology company, in a deal designed to expand the automation capabilities of R1’s Phare Operating System and move healthcare providers and payers closer to real-time authorizations. Financial terms of the transaction were not disclosed. The acquisition is expected to close by the end of the third quarter.
Humata has developed an end-to-end platform designed to automate prior authorization workflows across healthcare specialties, reducing the manual work typically required to determine requirements, gather clinical information and secure payer approval.
The company’s technology has enabled providers to achieve up to a 96% first-pass approval rate while reducing write-offs by 30%, rescheduled appointments by 83% and staff touches by 45%.
R1 plans to integrate those capabilities into Phare OS, its AI-powered revenue cycle automation platform.
Phare OS focuses on pre-bill processes including authorization, utilization review, clinical documentation and coding. Its AI-first architecture is designed to identify and resolve problems before claims are submitted, helping healthcare providers reduce denials and improve reimbursement.
Humata will add authorization policy monitoring and agentic capabilities that can autonomously create authorization submissions.
Those technologies will enhance Phare Intelligence and Payer Atlas, which form the foundation of Phare OS.
Humata’s platform uses agentic workflows to identify applicable payer policies, connect with payers in real time and automate multiple stages of the medical review process.
The technology determines authorization requirements, creates AI-generated clinical information bundles, provides evidence supporting payer attestations and manages authorization requests through final approval.
Prior authorization represents a significant administrative burden across healthcare and is one of the three leading causes of claim denials, according to R1.
The company also cited research showing that one-third of insured adults identify prior authorization as the largest burden they encounter when accessing healthcare.
The problem can be particularly difficult for patients with chronic conditions, while healthcare organizations must continuously track changing payer requirements and devote employees to highly manual authorization processes.
R1 believes combining Humata’s capabilities with Phare OS can automate more of that work upstream, before it creates delays, denials or reimbursement problems later in the revenue cycle.
The integration could also enable greater collaboration between healthcare providers and insurers as R1 works toward a model in which authorization decisions can increasingly occur in real time.
Existing Phare OS customers will also be able to deploy additional modules, including Audit and Denials, with limited incremental data integration.
Following the acquisition, Humata’s team will become part of R37, R1’s agentic AI development and innovation group.
The combined teams will work to connect Humata’s prior authorization technology with the broader Phare OS architecture while supporting Humata’s existing customer pipeline.
The transaction gives Humata access to R1’s broader healthcare network and operating scale.
R1 works with approximately 1,000 healthcare providers, including 95 of the 100 largest U.S. health systems, and processes more than 600 million payer transactions annually.
That scale provides a substantial environment in which Humata’s authorization technology could potentially be deployed across a wider range of healthcare organizations.
For R1, the acquisition represents another step toward its broader objective of automating the healthcare revenue cycle by combining AI, workflow orchestration and human expertise within a single operating platform.
Lazard served as exclusive financial advisor to Humata in connection with the transaction.
KEY QUOTES:
“Today’s announcement marks an important step forward in our journey to automate the revenue cycle and make real-time authorizations a near-term reality.”
“Humata significantly enhances our coverage of the authorization process, advancing our strategy to have the most intelligent and integrated pre-bill architecture in the industry. Together, we will continue to shape the future of revenue cycle management and help deliver better outcomes for the patients, providers, and the health systems we serve.”
Joe Flanagan, Chief Executive Officer of R1
“As a physician, I’ve seen firsthand how prior authorization delays drain providers and push an already strained healthcare system to a breaking point. Fixing this broken process is urgent.”
“By joining forces with R1 and their visionary R37 innovation lab, we can bring our prior authorization capabilities into the Phare OS platform, combining advanced AI and upstream intelligence with downstream execution to finally eliminate administrative friction for providers, payers, and patients.”
Jeremy Friese, MD, Founder and CEO of Humata Health
