Thoughtful AI Secures $20M in Series A Funding to Revolutionize Healthcare Revenue Collection

Healthcare revenue collection startup Thoughtful AI raises $20M in early-stage funding

Healthcare revenue collection startup Thoughtful AI raises $20M in early-stage funding Healthcare industry-focused revenue cycle management startup Thoughtful Automation Inc. said today it's ready to accelerate its business after closing on a $20 million early-stage funding round. Today's Series A round was led by Nick Solaro of Drive Capital and saw the participation of existing investor TriplePoint Capital. It brings the startup's total amount raised to date to $35 million, following two earlier seed funding rounds.. Alongside the new funds, Thoughtful AI also announced general availability of what it says are the first three "human-capable" artificial intelligence agents for revenue cycle management that specialize in the healthcare industry. Those agents, named CAM, EVA and PHIL, are designed to handle claims processing, patient eligibility verification and payment posting tasks, respectively. The startup believes that healthcare organizations in the U.S. are crying out for more efficient automation tools that can reduce the costs associated with revenue collection. It explains that most healthcare providers have had no choice but to hire human workers to perform those revenue collection tasks manually. But the tedious, complex nature of this work means they struggle with issues like claim denials, cost to collect and days sales outstanding. These manual processes are also extremely expensive, with complications around staff training, hiring and retention. "Healthcare billing is an intricate dance with numerous payers, including insurance companies, government programs, and patients," Thoughtful AI co-founder and Chief Product Officer Dan Parsons told SiliconANGLE. "Each has its own billing codes, claim submission requirements, and reimbursement rates. Mastering this complexity is crucial for ensuring accurate billing and timely payments." With its new AI agents, Thoughtful AI thinks it has the solution to these challenges. It says, bluntly, that healthcare providers will be able to "stop hiring for these roles" and use its AI agents to improve their productivity, enabling them to dedicate more resources towards improving patient outcomes, as opposed to spending a small fortune working out how to get paid. Thoughtful AI co-founder and Chief Executive Alex Zekoff explains that these costs are quite considerable, and one of the main reasons why the U.S. healthcare system is so expensive and inefficient. "In many industries, collections cost less than a penny on the dollar, but collections can cost 10 times that in healthcare," he pointed out. "Imagine a healthcare provider making $100 million a year yet having to spend $10 million to collect that revenue. Those dollars should go to the patient experience, not inefficient collection processes." The startup said its AI agents combine multiple AI systems, including large language models that can generate text, as well as natural language processing, optical character recognition and robotic process automation models. By employing this combination of AI technologies, Thoughtful AI's agents can perform revenue collection tasks just as well as any human, with the advantage being that they're always available and less likely to make mistakes. Parsons said that existing RPA tools are simply not up to the job when it comes to the complexity of healthcare revenue cycle management. "Traditional RPA relies heavily on predefined rules and structured data," he said. "Healthcare RCM, with its dynamic and unstructured data, often presents scenarios where these rigid rules cannot adapt, leading to inefficiencies and errors. And many healthcare systems operate on a mix of legacy and modern systems. RPA tools struggle to seamlessly integrate across these varied platforms, especially when APIs or direct integrations are not available." The company claims that using CAM, EVA and PHIL will therefore be more efficient than either RPA systems or humans. It points out that its AI agents take the same time to train as the average worker does, and once they're up and running, they can perform the work of an entire team. They're also capable of continuous improvement, learning as they perform tasks so they gradually become more efficient over time. "Our AI agents leverage various techniques and technologies, allowing their scope and workflows to evolve and scale as business needs change," Parsons said. "This adaptability ensures that even as payer rules change or new scenarios emerge, our systems continue to operate efficiently and accurately without breakage." Although the AI agents are only being launched today, they have been extensively tested by early adopters and shown themselves to be extremely reliable, the startup insisted. It claimed that its customers have seen an average return on investment of between five-times and nine-times, leading to approximately 300% greater net revenue retention rates for those companies. Moreover, some customers were able to rescue their claims processing times by an incredible 2,400%, the company said. Allegiance Mobile Health's chief financial officer Kathrynne Jones said her company was able to materially reduce its operating costs by integrating the startup's AI agents. "With Thoughtful AI's support, we doubled the capacity of our claims scrubbing team by an impressive 100%, seamlessly managing thousands of claims daily with minimal human intervention," she said. According to Parsons, healthcare providers are desperate to implement more automation due to the intense difficulties involved in hiring and retaining staff for their revenue cycle management operations. He said the attrition rate of the average RCM team in healthcare is as much as 40% at some providers, which is three times higher than in other industries. As such, almost every healthcare provider it has engaged with was understaffed, he said. "It is inevitable that AI will take over much of the work people are currently doing," Parsons said. Yet he insisted that his company isn't out to replace humans entirely and steal their jobs, saying that its tools are more about making their existing RCM teams more productive and efficient. "The talent pool for these jobs is evaporating because the work is extremely tedious and time-consuming," he said. "Our AI agents solve this problem by partnering with humans, allowing them to focus on more fulfilling and human-centric tasks." Zekoff said the startup will invest the funds from today's round into its research and development efforts, hire more "top-tier tech talent" and expand its go-to-market and operations teams. "Our AI agents save healthcare providers millions of dollars through such KPIs as opex improvement, cost to collect, payment efficiency and DSO reduction," he added.

See the 9-slide pitch deck that startup Thoughtful AI used to raise $20 million from Drive Capital for its AI agents

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. The startup, formerly called Thoughtful Automation, dropped its non-healthcare clients to sell only to midmarket healthcare companies that provide services like behavioral health and dental care. Now, it's raised fresh cash to deploy its new AI agents to more healthcare clinics across the US. The Austin, Texas-based startup just grabbed $20 million in Series A funding, led by Drive Capital and including TriplePoint Capital. Thoughtful AI is also announcing its first three AI agents, named CAM, EVA, and PHIL, to process medical claims, check patient insurance coverage, and record payments. Thoughtful AI is far from the only startup using AI to tackle revenue cycle management -- it's jumped in the rings with top-funded players like $6 billion startup Commure, which dug into RCM by merging with Athelas in October, as well as up-and-coming companies like Codametrix, which grabbed a $40 million Series B in March. But while many startups use AI to help automate key parts of these processes, Thoughtful AI says its agents can do 100% of these workflows autonomously. Those agents help healthcare clinics cut the costs of hiring new workers and make their existing workers more efficient, Zekoff said, delivering an average of five to six times in savings what customers pay for Thoughtful AI's solutions. The startup says it currently has between 30 and 40 customers, some of which have hundreds of clinics across the country. Thoughtful AI's original vision is playing out across industries, too. The popularity of AI agents is exploding, with startups grabbing cash for agents that automate business functions like customer support and software development, and Big Tech behemoths like Google funneling cash into their own AI agent projects. Thoughtful AI has raised $40 million to date, Zekoff said. That includes a $5 million seed round in September 2021, also led by Drive Capital, plus an unannounced $10 million seed extension and $5 million of additional debt funding. The $20 million Series A consists of both equity and debt, he said. With this fresh funding, Zekoff said he plans to double down on hiring -- the startup is looking for engineers in Brazil and Romania, which he says are top sources for Python talent, as well as the US. He said the startup wants to focus some of the cash on decreasing the time it takes to get a customer's agents up and running. Right now, Thoughtful AI can deploy its AI agents personalized for its clients' needs within 90 days; Zekoff said he wants to get that time down to a week. Zekoff said Thoughtful AI aims to hit $10 million in annual recurring revenue by the end of the summer. The startup expects to raise its Series B in early 2025. Its goal, Zekoff said, is to get to $100 million in annual recurring revenue in about the next two years, with 100 employees in the US. Check out the presentation Thoughtful AI used to raise $20 million from Drive Capital.