Revenue cycle management technology company R1 has entered into a definitive agreement to acquire Humata Health, an AI-powered prior authorization automation company, as it expands the capabilities of its Phare Operating System (Phare OS).
R1 plans to integrate Humata’s technology into Phare OS, supporting its strategy to automate more of the revenue cycle and move toward real-time authorizations. Humata’s team will also join and strengthen R1’s R37 innovation lab, which focuses on agentic AI development.
“Humata significantly enhances our coverage of the authorization process, advancing our strategy to have the most intelligent and integrated pre-bill architecture in the industry," Joe Flanagan, R1 CEO, said in a statement. "Together, we will continue to shape the future of revenue cycle management and help deliver better outcomes for the patients, providers and health systems we serve.”
According to the companies, Humata’s AI-powered solution has enabled physicians to achieve a 96% first-pass approval rate and reduce write-offs by 30%. Rescheduled appointments have also declined by 83% among users of the technology.
The acquisition comes as prior authorization remains a significant administrative issue across healthcare. An analysis of 2025 requests found that insurers denied between 12% and 18% of standard prior authorization requests, depending on the insurance market.
Researchers examining insurers representing approximately 71 million enrollees found that 12% of standard requests were denied in Medicare Advantage, compared with 14% in Medicaid managed care and 18% in Affordable Care Act federally facilitated Marketplaces. Denial rates for expedited requests were 10%, 12% and 16%, respectively.
“As a physician, I’ve seen firsthand how prior authorization delays drain providers and push an already strained healthcare system to a breaking point,” said Jeremy Friese, M.D., Humata Health CEO and founder, in a statement. “Fixing this broken process is urgent. By joining forces with R1 and its 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.”
Financial terms were not disclosed. The transaction is expected to close at the end of the third quarter of 2026.
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