With over 1,000 insurance companies in the U.S., figuring out how to get paid by each company is a complex challenge for doctors and hospitals.
Each insurance may require slightly different information on medical claims, even for the same procedure. Incorrectly filed claims can lead to denied coverage, requiring manual resubmission and delayed payments.
According to Nick Perry, co-founder and CEO of Candid Health, most medical claim denials result from legacy billing system providers struggling to keep pace with the increasing complexities of modern healthcare.
After five years at Palantir, Perry founded Candid Health in 2019 with the goal of simplifying medical billing by automating claims submissions and eliminating manual work for billing teams.
Since then, the company has attracted a growing number of telehealth providers, including Allara, Nourish and Talkiatry, and has recently begun adding large physician groups as customers. In 2024, Candid’s revenue grew nearly 250%.
Investors noticed the company’s fast growth pace. On Wednesday, Candid announced that it raised a $52.5 million Series C led by Oak HC/FT and existing investors. The round comes six months after Candid’s $29 million Series B, which was led by 8VC with participation of returning backers First Round Capital, BoxGroup, and Y Combinator.
Perry built the company by drawing on his Palantir experience, where he witnessed the power of data analytics firsthand. Medical billing is ultimately a data engineer problem, he told TechCrunch.
“Legacy systems flag problems with claims, and send them back to providers to fix the claim,” Perry said. But Candid Health claims that it has developed, and continually refines, a sophisticated rules engine that allows providers to submit accurate claims to insurance companies on the first try.
So far, Candid hasn’t leaned into generative AI, but some of the latest funding will go towards implementing the latest machine learning techniques. For instance, AI can identify claim types consistently denied by insurers, enabling Candid’s system to correct those claims before they are submitted.
The company may eventually also build an AI-powered feature that can call insurances about denied claims. But the company’s ultimate goal is to avoid those calls altogether.
“There shouldn’t have to be a denial phone call,” Perry said. “It’s much better to just submit the claim correctly the first time.”
In addition to competing with legacy billing systems, many of which are built by electronic health record companies like Epic and Athenahealth, Candid Health competes with startups Apero and Adonis, which is backed by Point72 Ventures and General Catalyst.