The relationship between payers and providers has been historically contentious, with prior authorization being one of the biggest pain points. The process remains a heavily manual and costly burden for both physicians and health plans — and often results in patient care delays, which can be dangerous or even fatal.
On Thursday, a startup focused on simplifying the notoriously difficult prior authorization process announced that it has raised $50 million.
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The financing brings Boston-based Cohere Health’s total funding to $106 million. The round was led by Deerfield Management, with participation from Define Ventures, Flare Capital Partners, Longitude Capital and Polaris Partners.
The startup, which was founded in 2019, seeks to digitize and expedite the prior authorization process to ensure patients receive faster access to the care they need.
“Whether initiated by fax, web portal or directly from electronic health records, Cohere’s solution digitizes authorization requests, automatically applies rules to adjudicate the request and returns a response to the provider in real-time. AI-driven ‘nudges’ help ensure providers make requests in line with administrative and clinical policies, so that instant approval is much more likely,” explained CEO Siva Namasivayam.
Cohere’s prior authorization platform doesn’t just say “yes” or “no” to the authorization request, he noted. The startup’s technology combines the request with population data and analytics to generate customized care paths — an approach that aligns with emerging value-based care models, Namasivayam pointed out.
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The need for software to streamline the prior authorization process is incredibly evident given CMS’ new rule on the matter, which was finalized two weeks ago. The rule applies to Medicare Advantage organizations, Medicaid managed care plans, Medicaid and the Children’s Health Insurance Program (CHIP) fee-for-service programs, CHIP managed care entities, and issuers of Qualified Health Plans offered on the Federally-Facilitated Exchanges.
Beginning in 2026, these payers will have to issue prior authorization decisions within 72 hours for urgent requests and seven calendar days for non-urgent requests — and they must specifically state why they denied a request. CMS claims this rule will slash non-urgent prior authorization decision timelines in half for some payers, as well as save about $15 billion over 10 years.
Namasivayam said that Cohere is well-positioned to help payers comply with this rule.
“With Cohere’s intelligent prior authorization technology, 83% of requests are immediately approved. In the small number of cases where clinician review is required, Cohere averages a 4.5-day turnaround time and only nine hours for expedited cases,” he declared.
The startup currently serves five health plans — including Humana and Geisinger — that are charged on a per-member per-month basis. Cohere processes 5.5 million prior authorizations per year for 15 million plan members and 420,000 providers across the country, Namasivayam noted.
He thinks his startup has set itself apart from other companies selling prior authorization software, such as Change Healthcare and Evolent Health. Namasivayam argued that Cohere is the only company to offer both a licensed platform-as-a-service solution, as well as a fully delegated solution — which gives health plans the option to use the technology in-house or outsource their entire utilization management operations for certain specialties to Cohere.
Additionally, he pointed out that Cohere’s platform has advanced predictive analytics, which anticipate changes in utilization, find outlier provider patterns and predict patient outcomes.
Photo: Piotrekswat, Getty Images
