Medical billing startup raises $3.3M in seed funding as medical debt rises
Medical bills have become an undesirable and all-too-common feature of the American healthcare system. Kaiser Health News recently reported that 100 million people in the United States are in debt due to medical bills, collectively owing around $200 billion. Previous reports have shown that half of Americans have medical debt.
Now a company that helps consumers fight those bills is getting extra ammunition.
This week, New Hampshire-based Resolve Medical Bills announcement it raised $3.3 million in seed funding, led by AlleyCorp Healthcare Fund with participation from a number of companies, including direct healthcare start-up Nomi Health.
Resolve helps consumers combat large medical bills by using algorithms that identify billing errors and negotiators to reduce bills.
According to Braden Pan, Founder and CEO of Resolve, the company typically finds that errors lead to an average 10% drop in medical bills. (Some sources estimate up to 80% medical bills are fake.)
Pan says the company doesn’t just look for errors, it also strives to reduce bills overall. Resolve works with people with medical bills of $5,000 or more. Pan says they plan to use part of the investment to build additional automation that will allow them to reduce the minimum invoice amount to $1,000 or less.
Consumers pay a flat fee plus a percentage of the savings the company makes on their behalf; the specific charges depend on the size of the invoice. Customers can also pay a flat fee — $49 per bill — for help accessing hospital financial assistance.
The company reports that it has helped solve nearly $20 million in medical bills, an average of 60-65% savings per customer.
Pan attributes their effectiveness to two main factors: fair pricing data to back up negotiations, and staff with a combination of expertise and persistence in medical billing negotiations.
“We’ve done this hundreds of times before. We know how it works,” Pan said. “You have to come in with the mindset of ‘I’m not going to take no for an answer. I’m going to fix this.
Pan said Resolve is focused on serving consumers because that’s where he sees the greatest need for help.
“Hospitals and insurance companies have teams of people looking out for their financial interests, leaving consumers stuck in the middle,” he said.
Companies like Resolve sit at the intersection of digital health and fintech, but don’t dominate either sector, especially given the buy now, pay later trend that has swept across healthcare, among others. categories, a stumbled amid losses from industry leaders and growing financial challenges from consumers.
Yet finance-focused healthcare companies can only grow in relevance as healthcare costs rise and consumers continue to bear more of those costs directly.
“Just as we think about the toxicity of treatments, increasing attention is being paid to ‘financial toxicity,'” said Brenton Fargnoli, MD, managing partner of AlleyCorp Healthcare Fund. “The fear of financial ruin from medical bills places additional stress on already strained patients, leading to many unintended negative consequences. We view patient financial support as a growing and essential part of the patient journey. »
Mark Newman, founder and CEO of Nomi Health, said Resolve represents a vision for how American healthcare can improve.
“Americans need a fresh start, especially coming out of Covid while dealing with today’s economic challenges,” Newman said. “We will advocate for Resolve with every organization we partner with so that Americans can seek the care they need without facing the impossible trade-off between health and financial solvency.”
Pan has focused his entire business on helping consumers avoid this trade-off.
“We believe a daily medical bill shouldn’t bankrupt an ordinary American,” he said.