R1 Acquires Humata Health to Automate Prior Authorizations

R1 Expands Revenue Cycle Automation with Prior Auth Acquisition

Chicago-based healthcare revenue management company R1 is acquiring Humata Health, an AI-focused startup that automates prior authorization processes. The deal extends R1's automation capabilities further upstream in the revenue cycle, addressing one of healthcare's most persistent administrative bottlenecks.

R1, which partners with 1,000 providers and processes more than 600 million payer transactions annually, plans to integrate Humata's technology into its Phare Operating System. The acquisition is expected to close by the end of the third quarter.

Why it matters

Prior authorization remains a major friction point in healthcare operations, requiring significant manual effort to navigate constantly changing payer policies. By automating this upstream process before claims submission, R1 aims to prevent downstream denials and reduce administrative burden for both providers and payers. The move reflects a broader industry shift toward using AI agents to handle repetitive, rules-based workflows that currently consume substantial staff time.

Addressing Authorization Complexity

Humata Health was founded in 2023 by Jeremy Friese, M.D., a former interventional radiologist and physician leader at Mayo Clinic. Friese previously founded Verata Health, an AI technology company acquired by Olive in 2020, where he served as president of the Payer Market.

The Winter Park, Florida-based company developed authorization policy monitoring and agentic capabilities designed to autonomously create effective authorization submissions. These capabilities will enhance two core components of Phare OS: Phare Intelligence and Payer Atlas.

Integration Strategy

R1's Phare OS currently focuses on pre-bill processes, using AI-powered agentic workflows to optimize reimbursement before claims are submitted. Humata extends this approach by adding authorization-specific clinical and payer intelligence earlier in the care delivery process.

Following the transaction close, the Humata team will join R1's R37 innovation lab as part of the company's agentic AI development team. R1 stated that Phare OS customers will benefit from the ability to deploy additional modules, including Audit and Denials, with minimal incremental data integration.

The combined platform aims to support deeper collaboration between payers and providers, moving the industry closer to real-time authorizations.

Physician Perspective on Administrative Burden

"As a physician, I've seen firsthand how prior authorization delays drain providers and push an already strained healthcare system to a breaking point," Friese said in a statement. "Fixing this broken process is urgent. By joining forces with R1 and their visionary R37 innovation lab, we can bring our prior authorization capabilities into the Phare OS platform, combining advanced AI and upstream intelligence with downstream execution to finally eliminate administrative friction for providers, payers, and patients."

The acquisition details were first reported by Healthcare Innovation Group.