Series B funding will propel product innovation and market expansion to benefit hospitals and health systems.
SmarterDx, the leader in clinical AI for revenue integrity and care quality, today announced it has secured $50 million in Series B funding led by Transformation Capital. The round also includes continued investments from Bessemer Venture Partners, Flare Capital Partners and Floodgate Fund, bringing total funding to $71 million to date. The investment will drive product innovation that will create additional value for health systems, as well as support scale as the company expands.
SmarterDx, which raised seed funding in 2022, leverages clinical AI that uniquely understands clinical reasoning and provides complete auditability to enable health systems to close their revenue integrity gap. Small errors or omissions in clinical documentation can lead to missed, rejected or underpaid claims. SmarterDx remedies this by providing second-level reviews of every patient chart, enabling hospitals and health systems to safeguard millions in revenue leakage and ensure that care quality is accurately represented.
“SmarterDx transforms clinical data into insights that are fully attributable and actionable. This has distinguished our product in a healthcare landscape where many AI solutions have been built on hype, have poorly defined value and focus on replacing people,” said Dr. Michael Gao, co-founder and CEO of SmarterDx. “Our focus has always been empowering clinical documentation integrity and coding teams to capture a more accurate, more complete patient picture and enabling providers to focus on patient care rather than paperwork.”
With this investment, SmarterDx will add new clinical and financial data integrations and continue to refine its proprietary algorithms that identify new revenue and quality opportunities for customers. SmarterDx finds an average of $2 million in net new annual revenue per 10,000 patient discharges for its clients, which include some of the largest hospitals and health systems across the U.S. With a 100% client retention rate, a 5:1 ROI, and a KLAS client satisfaction score of 98, SmarterDx has quickly established itself as a leader in the healthcare revenue cycle solutions market.
“We pursued a partnership with SmarterDx after hearing the profoundly positive feedback from the market,” said Todd Cozzens, managing partner, Transformation Capital. “After spending time with the leadership team, we knew we wanted to be part of their story. Not only does this company have a solution that solves a complex problem that healthcare has long grappled with, but they are just getting started. There’s much more that their clinical AI can achieve. We believe that revenue cycle management is the next big health tech category as modern AI is ideal for understanding and automating the labyrinthic reimbursement and payment regime of our $4.5 trillion annual healthcare spend.”
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