Medical Billing Startup Raises $3.3M In Seed Funding As Medical Debt Increases
Medical bills have become an unwelcome—and all too common—feature of the U.S. healthcare system. Kaiser Health News recently reported that 100 million people in the United States are in debt because of medical bills, collectively owing an estimated $200 billion. Prior reports showed that half of Americans carry medical debt.
Now, a company focused on helping consumers fight these bills is getting some additional ammunition.
This week, New Hampshire-based Resolve Medical Bills announced it has raised $3.3 million in seed funding, led by AlleyCorp Healthcare Fund with participation from a number of companies, including direct healthcare startup Nomi Health.
Resolve helps consumers fight large medical bills using algorithms that identify billing errors and negotiators to reduce the bills.
According to Braden Pan, founder and CEO of Resolve, the company typically finds that errors cause medical bills to be off by an average of 10%. (Some sources estimate as many as 80% of medical bills are wrong.)
Pan says the company doesn’t just look for errors, they also work to lower bills overall. Resolve works with people whose medical bills are $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 bill size to $1,000 or less.
Consumers pay a flat fee plus a percentage of savings the company achieves on their behalf; specific fees depend on the size of the bill. Customers can also pay a fixed-fee—$49 per bill—for help accessing hospital financial aid.
The company reports that it has helped resolve nearly $20 million in medical bills, averaging 60% to 65% in savings per customer.
Pan attributes their effectiveness to two main factors: data on fair pricing to underpin 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 go in with the mindset of, ‘I’m not going to take no for an answer. I’m going to get this figured out.’”
Pan said Resolve focuses 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 squeezed in the middle,” he said.
Companies like Resolve sit at the intersection of digital health and fintech but dominate neither sector, especially as the buy-now-pay-later trend that swept through healthcare, among other categories, has stumbled amid industry leader losses and rising consumer financial challenges.
Still, finance-focused healthcare companies may only increase in relevance as healthcare costs rise and consumers continue to bear more of those costs directly.
“Just as we think about treatment toxicity, there is increasing attention being paid to ‘financial toxicity,’” said Brenton Fargnoli, MD, managing partner of AlleyCorp Healthcare Fund. “Fear of financial ruin from medical bills puts additional stress on already strained patients, resulting in many unintended negative consequences. We see patient financial support as a growing and critical 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 facing today’s economic challenges,” Newman said. “We’ll champion Resolve to every organization with which we partner so that Americans can seek the care they need without facing the impossible tradeoff of health and financial solvency.”
Pan has focused his whole company on helping consumers avoid that tradeoff.
“It’s our believe that an everyday medical bill shouldn’t bankrupt an everyday American,” he said.