Startups, Health Tech

Cedar bulks up billing platform with $425M acquisition

Healthcare payments startup Cedar acquired another billing startup, OODA Health, for $425 million. The deal would bring together billing tools for providers and payer onto one platform.

Putting puzzle pieces together on sky background with sunlight merger

After raising a recent $200 million funding round, healthcare billing startup Cedar is buying up competitor OODA Health for $425 million. The deal would bring together tools for providers and payers onto one platform, making it easier to tackle the confusing and fragmented billing process that many patients experience.

New York-based Cedar was co-founded in 2016 by Florian Otto, after seeing his wife navigate a disjointed billing process from a trip to the hospital. The startup’s aim is to make billing easier to navigate for patients. Cedar sends line item bills with clear explanations, instead of CPT codes, and makes it easier for providers to connect with patients to answer billing questions. 

OODA Health, meanwhile, was working to remove the long lag most providers experience before getting paid. The San Francisco-based startup pulls in clinical data from electronic health records to help plans pay for care in real-time, shifting the responsibility to payers for collecting any outstanding bills. 

By working with payers and providers, the two companies are looking to build more features to make payments easier. For example, they plan to incorporate pre-visit features including cost transparency and upfront payment options for patients, and tools to smoothen the prior authorization process for providers.

They’ll also have a bigger combined footprint. OODA works with nearly 20 companies, including Blue Cross Blue Shield of Arizona and CommonSpirit Health, while Cedar works with more than 35, including Yale New Haven Health and ChristianaCare. 

 Otto will continue to lead the combined company as CEO, and its headquarters will stay in New York City. OODA CEO Seth Cohen will become president of the company and join its board of directors. The two companies’ co-founders, Arel Lidow and Anshul Amar, will also have a role in the executive team as co-chief makers. 

Both companies’ boards have approved the deal, and it is expected to close this month.

Photo credit: mikdem, Getty Images

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