R1 drills down on AI prior authorizations with Humata buy

Revenue cycle management firm R1 has reached a definitive agreement to acquire Humata Health, an artificial intelligence-powered prior authorization automation company. The acquisition aims to bolster R1's Phare Operating System (Phare OS) with advanced AI capabilities, enabling real-time authorizations. R1 CEO Joe Flanagan stated that the deal will enhance the platform's AI and integrated pre-bill architecture, positioning it as the most intelligent and integrated solution in the industry.

Joe Flanagan emphasized the importance of shaping the future of revenue cycle management and delivering better outcomes for patients, providers, and health systems.

Humata Health's AI-powered solution has achieved a 96% first-pass approval rate, reducing write-offs by 30% and rescheduled appointments by 83%. The CEO and founder of Humata Health, Jeremy Friese, expressed urgency in fixing the broken prior authorization process, noting the detrimental impact on providers and strained healthcare systems. He highlighted the urgency of combining advanced AI and upstream intelligence with downstream execution through the partnership with R1.

Financial terms of the agreement remain undisclosed, but the deal is expected to close at the end of the third quarter of 2026. Humata Health CEO and founder, Jeremy Friese, emphasized the importance of fixing the prior authorization process, stating that the partnership with R1 and its R37 innovation lab would bring advanced capabilities to the Phare OS platform, ultimately eliminating administrative friction for providers, payers, and patients.

Recent data from KFF analysis revealed that insurers denied between 12% and 18% of standard prior authorization requests in 2025, with a declining trend in expedited requests (10% - 16%). The analysis covered Medicare Advantage, Medicaid managed care, and ACA federally facilitated Marketplace websites from insurers with at least 2.5% market share in respective segments.