AI-enabled risk adjustment platform Keebler Health has raised $6 million in seed funding.

Freestyle Capital, MBX Capital, New Stack Ventures, Underdog Labs, Everywhere VC, Ludlow Ventures, Primordial, the Tweener Fund, the Hustle Fund, Deb Liu and Bong Koh participated in the round. 

The latest funding brings Keebler Health’s total raise to $7.8 million.

WHAT IT DOES 

Keebler Health's platform identifies chronic patient conditions and provides clinicians with insights and recommended next steps to keep patients healthy. 

Additionally, the company's LLM-powered platform ingests and reviews massive amounts of patient medical records, flagging issues for clinician review. 

According to Keebler Health, its tools can find conditions that clinicians miss, improving risk adjustment accuracy and helping ACOs and value-based care (VBC) providers.

The company will use the funds to grow its team and accelerate its product roadmap as demand for its platform accelerates. 

"Risk adjustment accuracy has emerged as a top challenge for providers in VBC environments," Isaac Park, cofounder and CEO of Keebler Health, told MobiHealthNews.

"With the move toward VBC accelerating and AI getting more and more accurate, we knew it was the right time to apply AI to this problem," he said.

There is a meta change around the risk adjustment models that are typically used, and they are currently in transition, Park added.

The Centers for Medicare and Medicaid (CMS) pays Medicare Advantage plans using Hierarchical Condition Categories (HCCs), and Accountable Care Organizations (ACOs) and private payers use the categories to assess risk. 

"Over the last eight years, it has all been under this version model called Hierarchical Condition Categories Version 24. And the entire industry has largely trained a group of people, clinicians or risk adjusters or population health people that are all trained on this one particular model, V24," Park said.

Meanwhile, Version 28 is coming out and is radically different relative to what it was before, said Park, adding that 2025 is the last year V24 will count at all for most CMS programs.

"So, for the last five years, the industry has largely revolved around humans trained on how to do risk adjustment on that model. CMS is rolling out the changeover to V28 over the next three years," he said. "You have all clinicians who are trained on this new model that are now really under the gun to try and change the way that they do this process all with this new risk adjustment model V28."

Park explained that on top of that with the introduction of LLMs and LLM-powered technology, all of a sudden what used to be a small subset of expert clinicians doing risk adjustment for a small sampling of patients on the highest risk stratification, "now you can use an AI tool and empower people to do it across your entire organization for all of your patients." 

He added, "Not only are the rules changing, but also you are getting this technology change that allows you to take those new rules and apply it to your entire population broadly."

MARKET SNAPSHOT

Other companies in the value-based health space include NeueHealth, which earlier this month entered into a definitive merger agreement to be acquired by an affiliate of New Enterprise Associates (NEA) at a value of $1.3 billion. 

Upon completion of the acquisition, NeueHealth will become a privately held company. Under the terms of the agreement, NeueHealth common stockholders will receive $7.33 per share in cash, a premium of roughly 70% over the closing price of NeueHealth common stock as of Dec. 23.

In 2024, Guidehealth closed a $14 million seed funding round. Memorial Hermann Health System, healthcare entrepreneur Sidd Pagadipati, and other healthcare leaders and investors participated in the round. 

That same year, Lumeris secured $100 million in an equity capital raise led by Deerfield Management. Endeavor Health joined as a new investor and BlueCross BlueShield Venture Partners, Sandbox Industries, Kleiner Perkins and JDLinx participated in the round. The funds will be used to support the company's expansion of its provider partnerships.

In 2023, Guidehealth acquired Arcadia's value-based care services division and managed services organization. The company also signed an agreement with Arcadia to leverage its data analytics platform to power the acquired offerings, which will work in conjunction with its predictive and generative AI.