Health IT firm CoverMyMeds has raised $1 million to continue developing its prior authorization technology.
The fundraising has come over the course of about a year, with the largest investors being Cleveland venture development group JumpStart and Charles Hallberg, the founder of MemberHealth, a Solon, Ohio prescription drug coverage company that sold for $630 million in 2007.
Twinsburg, Ohio-based CoverMyMeds plans to use the funding to continue developing its software and hire more employees, said Sam Rajan, principal and co-founder. The company employs about 25 people, but Rajan didn’t want to speculate on what that number would be in about a year.
“It’s all about grabbing as much business as possible because we’ve done something that no one else has been able to do in this space,” he said.
The Twinsburg, Ohio, company has developed Web- and phone-based tools that speed up and automate the submission of prior authorization requests to health insurance plans. Insurers require these requests and other coverage determination forms to be submitted after they reject a patient’s prescription.
Insurers have typically handled prior authorization requests through call centers, but CoverMyMeds’ technology helps to automate the process, which can be an administrative hassle for patients, doctors and insurers.
“From a health standpoint, the easier we can make [the process], the more people are treated and the more long-term disease we can prevent,” Rajan said.
Launched in 2008, CoverMyMeds provides its services to pharmacies and doctors for free. It makes its money from charging fees to drug manufacturers, which have an interest in increasing their sales by expediting the prior authorization process. Clients’ drug reps then promote CoverMyMeds’ service to doctors and pharmacies.
The company’s service has been growing quickly, adding an average of about 150 doctors per day, Rajan said. He declined to disclose the number of drug companies CoverMyMeds has as clients.
The company’s future fundraising plans aren’t set and will be determined by the extent to which the company’s revenue offsets its expenses, Rajan said.