Daffodil Health raises $16.3M for health plan management platform
Daffodil Health, an artificial intelligence platform for health plan management and claims processing, announced Tuesday that it has raised $16.3 million in Series A funding to help scale the company.
The San Francisco-based startup provides AI-based software to U.S. health plans and third-party administrators to manage claims pricing and payment integrity. Its platform allows payers to process repricing in-house and out-of-network using transparent benchmarks and real-time reporting. Navin Nagiah, CEO and co-founder of Daffodil Health, said this work has historically been outsourced to providers who have “built billion-dollar businesses between providers and payers.” It offers a SaaS pricing model instead of the percentage savings pricing model used by companies like MultiPlan and Zelis.
“We’ve automated the entire workflow end-to-end,” he said. “As claims come in, we benchmark against market data, Medicare rates, MSA's historical allowable amounts, percentile distributions, and even provider-specific acceptance history. Configuration takes a few minutes, and then the system automatically runs on a claim-by-claim basis. Our goal is to provide control, automation, and transparency to plans at a fraction of historical costs.”
Daffodil's Series A round was led by Flare Capital Partners, with participation from LRVHealth and Maverick Ventures. Individual investors are also participating, including Scott Mingee, the former CEO of Equian (acquired by Optum) and Jim Lacy, the former president and COO of Collective Medical (acquired by PointClickCare). Daffodil has raised a total of $20.9 million.
“Daffodil is redefining how health plans and TPAs can modernize plan design, pricing and claims infrastructure while helping payers be more profitable and deliver more member-centric experiences,” Parth Desai, partner at Flare Capital Partners, said in a statement. “With built-in AI-native automation and auditability, Daffodil Enables faster, more reliable pricing and plan design decisions at scale that traditional existing solutions and point solutions cannot match.”
With the funding, Nagiah said the company will expand its out-of-network repricing and prepaid payment integrity solutions nationwide “so every payer can increase profits without having to pay exorbitant fees to legacy providers.”
Currently, health care accounts for approximately 20% of the U.S. economy. Approximately 41% of Americans have medical debt, and 58% of debt collection debt in the United States is related to medical bills. Daffodil Health aims to solve this problem
“Long term, we want to modernize the health care engine room,” Nakia said. “Whether it's telemedicine or digital health tools, there's a lot of innovation ahead. But the pipeline and management infrastructure behind the scenes is still outdated. If we can rebuild that foundation with modern software and artificial intelligence, we can enable more customized plan designs, be more transparent to employers, and ultimately achieve a more reasonable cost structure.”
Image: Feodora Chiosea, Getty Images
