Short takes: PocketHealth, Brightside fundings; VA OIG reports hit Oracle Cerner; Change cyberattack/legal updates; UHG-Amedisys reviewed in Oregon; Optum to buy Steward Health practices

It’s a relatively quiet week before the Easter holiday, with a few fundings, more drama at the VA around Oracle Cerner, updating Change Healthcare’s comeback, and the continuing scrutiny around UnitedHealth’s acquisitions:

PocketHealth garners a US$33 million Series B. The Toronto-based company markets an AI-assisted platform to health systems and providers that allows patients to access their medical imaging and reports as well as for providers to easily share imaging information. The funding was an all-equity round by Round13 Capital with participation from Deloitte Ventures, Samsung Next, and existing investors Questa Capital and Radical Ventures to bring total funding since 2020 to $55.5 million. The fresh funding will be used to grow further within the US and Canada and develop new platform functions. Patients have access to three platforms:  Report Reader to explain medical terms in the patient’s report, Follow-Up Navigator for follow-up imaging recommendations, and MyCare Navigator to equip patients with relevant, personalized questions to ask their doctor. The platform is available in 775 hospitals and imaging centers across North America and is used by more than 1.5 million patients.  PocketHealth release, Mobihealthnews

Brightside Health moves to a Series C of $33 million. This round for the telemental health company was led by S32, along with Kennedy Lewis, Time BioVentures, and Anne Wojcicki (Redwood Pacific) with existing investors ACME, Mousse Partners, and Triventures. Total funding since 2018 is $114 million. Brightside provides telemental health through payers in 50 states such as CareOregon, Blue Cross and Blue Shield of Texas, and Centene. The new funding will be used to expand into the usual new markets and offerings. Trip Hofer, who was former CEO of Optum Behavioral Health Solutions and now with .406 Ventures, will join the Brightside board of directors. Their most recent moves are expansion into Medicare and Medicaid programs for psychiatry, therapy, and their Crisis Care program for individuals with elevated suicide risk. Release

The Department of Veterans Affairs Office of Inspector General (OIG) released three reports last Thursday (20-21 March) that were sharply critical of the new Oracle Cerner EHR. While Oracle Cerner Millenium operates in only five VA locations, not including the joint MHS/Genesis Lovell FHCC, each one has been problematic from training to implementation–and are on hold. The OIG reports available here on the Electronic Health Records Modernization (EHRM) are scathing on the EHR’s scheduling and pharmacy features leading to patient safety and staff usability issues.

  • At VA Central Ohio Healthcare System (facility) in Columbus and elsewhere, this led to inaccurate medication and allergy information transmission from new EHR sites to legacy EHR sites that staff and pharmacists had to work around to provide adequate safety checks.
  • Also at VA Central Ohio, the Cerner EHR system error in 2022 led to a patient’s missed appointment since it was not routed to a queue to prompt rescheduling efforts. Subsequently, a nurse practitioner never evaluated the medication refill request, nor did a psychologist evaluate mental status and critical clinical information. The veteran patient died by accidental overdose approximately seven weeks after that missed appointment.
  • Regarding future implementations, the OIG was specific on what had to be fixed on both: “These concerns include the need for additional staffing and overtime to meet or exceed pre-deployment appointment levels, displaced appointment queue functionality, challenges related to providers and schedulers sharing information, inaccurate patient information, difficulties changing appointment type, and the inability to automatically mail appointment reminder letters. At facilities currently relying on the EHR, these issues have resulted in inconsistent workarounds and additional work, increasing the risk for scheduling errors.” 

Healthcare IT News, Healthcare Dive, EHR Intelligence, TTA 22 Feb

Change Healthcare’s systems are gradually returning. Since our last update on 14 March, UnitedHealth Group confirmed that 99% of pharmacy network services were up and running–and that they have fronted $2 billion to providers. Separately, they launched workaround software for medical claims preparation.

  • On 15 March, the electronic payments platform was restored.
  • On 20 March, UHG restored Amazon Web Services. It was backed up from Assurance, a claims and remittance management program, and claims clearinghouse Relay Exchange.
  • Relay Exchange went back online by 24 March to begin processing $14 billion in medical claims.

But on the legal and Federal fronts, UHG will be keeping its legal department busy. Starting the week of 11 March, the first class action lawsuit was filed by a women’s health practice in Albany, MS–Advanced Obstetrics & Gynecology PC. Another class action suit was filed on 18 March by Gibbs Law Group on behalf of providers to be named. Patients who have had compromised PII and PHI will be next from the 4 or 6 terabytes of payer information held by ‘notchy’ and other affiliates from the BlackCat/ALPHV masterminded attack as this is confirmed. Expect these to multiply like weeds in May. HIPAA Journal  And the American Hospital Association, Senators and House Representatives are jumping all over Health and Human Services (HHS) to ensure that payments are made to Medicare, Medicaid, and Medicare Advantage plans–as well as calls for investigating UnitedHealth. Becker’s, FierceHealthcare

As expected, UHG’s acquisition of Amedisys home health is running into more opposition at the state level. In this case, it’s the Oregon Health Authority (OHA) that will be conducting a full review. The Department of Justice (DOJ) has been investigating the acquisition on antitrust grounds almost since it was announced in June 2023. Shareholders approved the $3.3 billion buy the following September, but it has not closed. UHG’s plan is to merge it into Optum’s home health providers Contessa Health and LHG Group, creating a home health juggernaut. As noted earlier this month when DOJ announced a further antitrust probe of UHG around the UnitedHealth plan relationships with Optum services, “DOJ has a long memory, a Paul Bunyan-sized ax to grind, and doesn’t like losing. One wonders if now UHG has buyer’s remorse after fighting for two years to buy Change.” (And winning versus DOJ!) Fierce Healthcare

Yet UHG goes on buying providers, DOJ scrutiny or not. Optum is bidding for Steward Health Care’s Stewardship Health practices over nine states. For-profit Steward, headquartered in Dallas, needs to raise funds as it is in debt overall and facing major problems in Massachusetts, with several hospitals at risk of closure. In any case, the company wants to exit the state. A purchase price was not announced. The transaction is under review by Massachusetts’ Health Policy Commission (HPC) over the next 30 days. The Stewardship transaction would add to OptumCare’s total of 90,000 physicians–10% of US physicians, a number that is raising red flags on the state and Federal levels. FierceHealthcare, WBUR

Telemental news roundup: Brightside Health expands Medicaid/Medicare partners; Blackbird Health gains $17M Series A; Nema Health’s PTSD partnership with Horizon BCBSNJ

Mental health, whether pure ‘telemental’ or an integrated in-person/virtual model, remains one of the healthier (so to speak) sectors of digital health.

Brightside Health announced today a series of new and expanded health plan partnerships as well as expanded state coverage for Medicare and Medicaid plans.

  • CareOregon with a new contract to serve Medicaid beneficiaries.
  • Blue Shield of California with a new contract to serve Medicare Advantage enrollees.

These add to Brightside’s partnerships announced last October:

  • Blue Cross and Blue Shield of Texas–expanded contract to include Medicare Advantage coverage.
  • Centene’s expansion of coverage state-by-state, including Nebraska Total Care Medicaid and Wellcare Medicare Advantage.
  • Optum for UnitedHealthcare Medicare Advantage members
  • Lucet for Florida Blue members

Under traditional Medicare, coverage now includes Texas, California, Delaware, Arizona, New York, Washington, Florida, North Carolina, Michigan, and Illinois.

Beneficiaries and members can access Brightside’s virtual psychiatric therapy including medication, plus cognitive and behavioral therapy with independent skill practice, and Crisis Care, Brightside’s program for those with elevated suicide risk. With the new partnerships, Brightside is now estimating that they cover approximately 100 million lives–one in three US covered lives–and is seeking to further expand these partnerships as well as to traditional (original) Medicare Part B beneficiaries. Brightside Health was founded well before the gold rush in telemental health–2017–and has raised over $81 million over five rounds up to a Series B in March 2022, mainly led by Acme Capital (Crunchbase). Brightside release, Yahoo! Finance, Psychiatric Times

Blackbird Health raised $17 million in a Series A funding. This was led by Define Ventures with participation from Frist Cressey Ventures and GreyMatter, for a total raise of $23 million to date. Blackbird addresses the other side of the spectrum from Medicare–pediatric mental health in an integrated in-person and telemental health model–and serves patients aged 2-26. Blackbird’s care model considers in an ‘understand-first’ approach how children’s brains develop over time and the impact that growth has on mental health. Another unique aspect is that they developed a series of ‘Blackbird Biotypes’ based on 50 million data points drawn over a decade that identify patterns of behavior in clusters of individuals with similar symptoms-linked brain features. These assist in assessment, accurately identifying the underlying root cause of symptoms, and proposing integrated and personalized treatment plans. Blackbird claims this approach results in substantially lower use of medications and ED utilization. Last year, Evolent Health co-founder and COO Tom Peterson joined the company after his own family’s experience with Blackbird’s therapeutic model to help it scale from its three clinics and 40 providers in the Mid-Atlantic region. Blackbird release, Forbes

Startup Nema Health, a virtual clinic targeting a single condition–post-traumatic stress disorder (PTSD)–is now in-network in Horizon Blue Cross Blue Shield of NJ (Horizon BCBSNJ) commercial plans. Nema’s model is virtual care for PTSD from evaluation and virtual therapy sessions, starting with intensive sessions 3-5 times per week for 2-4 weeks, through support from a designated peer mentor plus messaging and interactive exercises. Based in NYC, Nema is in-network with UnitedHealthcare/Optum, Oxford, Oscar, and Connecticare in the states of New York, New Jersey, and Connecticut. Horizon is New Jersey’s largest insurer. Nema claims that 76% of their patients no longer meet PTSD criteria after completing Nema therapy. Nema is at seed stage funding of $4.1 million from .406 Ventures and Optum Ventures, raised last November. FierceHealthcare, Nema release

Why this matters:

Since 2020, telemental health got a black eye (and then some) from ADHD and opioid medication-assisted treatment (MAT) providers such as Cerebral, Done Health, Truepill, and others. Thriving during the pandemic, many of them are now facing various Federal charges. Others, like Calm, are basically meditation and sleep apps. The real need, and provider shortage, remains.

The need for psychiatric care and support for Medicare and Medicaid covered populations is high, but clinical supply is low.

  • According to the Center for Medicare and Medicaid Services (CMS) in announcing the state-based Innovation in Behavioral Health (IBH) eight-year, eight-state integrated care model last month, among the 65 million Americans currently enrolled in Medicare, 25% have at least one mental illness, with 40% of Medicaid members experiencing mental illness or substance use disorders (SUDs).
  • Yet provider shortages have worsened over time–as of 2020, The Commonwealth Fund estimated that an additional 7,400 providers (not necessarily psychiatric MDs) were needed to meet demand. Studies cited in Psychiatric Times (2022) estimate that the current shortage of psychiatrists, running at 6%, is expected to be between 14,280 and 31,109 psychiatrists by 2024. Distribution is concentrated in urban areas and their suburbs as well. It doesn’t help that physicians entering psychiatry in 2003-13 decreased by 0.2% and their average age is 55. Even in well-covered geographic areas, retiring doctors with no replacements have created coverage shortages.
  • For child psychiatry, the American Academy of Child and Adolescent Psychiatry (AACAP) reports that there are just 14 psychiatric specialists for every 100,000 children in America. 

Funding/new business roundup: General Catalyst’s HATco ‘health assurance’ venture and $6B portfolio merger, Brightside Health expands, Diana Health’s $34M, Headway’s $125M, Main Street Health’s $315M

With HLTH 2023 this week in Las Vegas, there’s the usual deluge of investment and ‘big news’ announcements, both before and during the conference.

HLTH’s Biggest and Somewhat Mystifying News (so far) is that Big Investor General Catalyst now is getting directly into the healthcare transformation business with HATco. The Health Assurance Transformation Corporation is a fully-owned company that will be in the business of “health assurance”, defined as “a more affordable, accessible and proactive system of care” which is a very broad brush indeed that sounds like the promise of value-based care and the Triple Aim (remember?). HATco already claims  20+ health system partners plus a large payer that accounts for about 15% of healthcare revenue and is in 43 states and four countries. They will be building an interoperability model with technology solutions that include a subset of their healthcare portfolio companies to drive this transformation. Their next big step will be actually acquiring and operating a health system to show how this health assurance can work. The new venture will be headed by Dr. Marc Harrison, former CEO of Intermountain Health, with a big assist from managing director Hemant Taneja, who previously founded data OS/EHR/workplace asset tracker and staff safety system Commure. Release, Mobihealthnews, FierceHealthcare 

Speaking of Commure, it is merging with another General Catalyst-funded company, Athelas. It seems like a skillful rationalization of two portfolio companies in health data and workflow data systems, including Commure’s PatientKeeper EHR, with Athela’s addition of revenue cycle management and sensor-based software for remote patient monitoring. The combined entity under the Commure name will be led by Athelas’ CEO and founder Tanay Tandon, with Commure’s CEO Ashwini Zenooz, MD moving into a non-executive director role on Commure’s board. Taneja will retain his executive chairman title. General Catalyst is investing additional funds, valuing it at $6 billion, oddly fanciful given the current environment and their revenue; the current Commure expects to finish the year with $100 million in contracted annual recurring revenue with the combined companies achieving a $125-150 million run rate by end of year. The transaction is expected to close at the end of October. Commure release, Athelas release

Telemental health’s Brightside Health doubles covered lives with additional Medicare and Medicaid beneficiaries. These are from Optum–UnitedHealthcare Medicare Advantage members–plus new and expanded partnerships with Centene, Lucet (to serve Florida Blue members), and Blue Cross and Blue Shield of Texas. This drives up in-network covered lives by 50 million to over 100 million (not actual users). Brightside offers personalized psychiatry, clinically proven therapy and Crisis Care (a program for those with elevated suicide risk) through these plans. Fun fact: based on a Brightside study published in Frontiers in Psychiatry, telemental health is effective for people with reported incomes under $30,000 per year. Healthcare Finance

Diana Health’s $34M Series B to nationally expand women’s health/OB-GYN digital health platform and care teams. Diana partners with health systems to offer women their tech-enabled services in maternity care–preconception and family planning, annual well woman visits, wellness coaching, and virtual and in-person classes and events. Their focus is on improvement of outcomes and women’s satisfaction with maternity care. Diana also has an in-person practice in Smyrna, Tennessee as well as arrangements with health system clinics in Springfield and Cookeville. The funding round was led by Norwest Venture Partners with existing investors .406 Ventures, LRVHealth, and AlleyCorp for a total of $46 million to date. Release, Mobihealthnews, MedCityNews

Telemental health is still simmering with Headway’s $125 million Series C and new unicorn status. Headway, which works exclusively with health plans to provide members with therapy and psychiatry, is now officially a $1 billion+ valued unicorn. This round was led by Spark Capital with Andreessen Horowitz, Accel, and Thrive. GV, which had participated earlier in the $70 million Series B round in May 2021 plus the late 2020 Series A of $26 million, was absent. Funds will be used to go national and equip their providers with new technology and tools. FierceHealthcare, Mobihealthnews

Topping it off, rural health service provider Main Street Health scored a jumbo investment of $315M in new capital. Investors include Oak HC/FT as well as five of the largest national Medicare Advantage plans. Main Street equips rural partner clinics with Health Navigators who assist the clinic’s providers with patient care coordination, such as med pickup reminders, scheduling visits post-hospital discharge, scheduling preventative screenings, and assisting with social determinants of health (SDOH) services. They plan to expand to 26 states from the current 18. A typical clinic is located in a town of 3,000 to 5,000 people and has 2.5 providers, making this additional outsourced service valuable indeed. Release, FierceHealthcare

Friday roundup: LetsGetChecked buys Veritas Genetics, Everly Health adds CMO, Babylon sends chatbot to Higi, ConcertAI’s $150M Series C, AmplifyMD’s $23M, and two ‘Brights’ raise $155M

Home health testing company LetsGetChecked is buying Veritas Genetics and Madrid-based Veritas Intercontinental for an undisclosed sum. Veritas specializes in whole genome sequencing. For LetsGetChecked, they can now build out genomic testing as part of their broad range of at-home test kits and app reporting for a wide variety of wellness, sexual health, and men’s/women’s health. It also opens up targeted panels and tests such as Pharmacogenomics (PGx), cancer screening, carrier screening, and maternal-fetal testing.

LetsGetChecked, based in Dublin and NYC, has raised $263 million to date through a 2021 Series D from investors such as Casdin Capital, HLM Venture Partners, and Optum Ventures. Veritas Genetics and Veritas Intercontinental are very early stage companies HQ’d near Boston with $61 million in funding through several venture rounds. Veritas was founded by Harvard and MIT genomics experts to make genetic testing more available and affordable. The release implied that Veritas principals would be joining LetsGetChecked. The acquisition is expected to close shortly. Release, Mobihealthnews

New CMO at Everly Health.  Liz Kwo, MD will lead their clinical strategy as chief medical officer. A competitor of LetsGetChecked, Everly Health is the parent of direct-to-home testing Everlywell, enterprise-focused Everly Health Solutions, and recently acquired Natalist in the fertility and pregnancy testing area. Comparing the two, LetsGetChecked occupies a more clinical and condition-specific space (e.g. thyroid antibodies, hormones), while Everlywell is positioned in the general wellness testing area, e.g. allergies. Dr. Kwo previously was with Anthem as Deputy Chief Clinical Officer and is an interesting combination of clinician and digital solutions/advanced data analyst. Release, FierceHealthcare

Babylon Health’s recently acquired Higi mobile app now has Babylon’s well-known AI-enabled symptom checking chatbot. Higi’s main business are in-store health ‘stations’ that measure blood pressure, pulse and weight, plus diabetes and heart disease risk through symptom checkers. The integration with the Babylon app also demonstrates for other Babylon partners how their chatbot can be used. Mobihealthnews

ConcertAI, the former Concerto HealthAI, raised $150 million in Series C funding from Sixth Street for a total $300 million and boosting its valuation to $1.9 billion. ConcertAI specializes in life sciences and healthcare enterprise AI and RWD SaaS solutions for use in precision medicine. It has partnered with Pfizer, Bristol-Myers Squibb, and has begun a collaboration with lab-testing giant Labcorp to launch precision oncology studies. Its parent is SymphonyAI, a larger AI company in other areas such as retail. Release, Mobihealthnews

AmplifyMD, a telemedicine platform for medical facilities to connect to specialist doctors, raised a $23 million combination Series A/seed round from F-Prime Capital, with the seed co-led by Forerunner Ventures and Greylock. Their target market? Over 3,300 medical institutions with a lack of specialty access, which are often in rural or small regions of the US. Their specialties are cardiology, neurology, psychiatry, pulmonology/critical care, infectious disease, nephrology, and hematology/oncology. Release 

Two mental health ‘Brights’ raise a total of $155 million. Brightline Health, a pediatric mental health company for at-home therapy targeted to kids and teens, raised a $105 million Series C for a valuation of $705 million. The round was led by KKR with current investors GV, Optum Ventures, Oak HC/FT Partners, Threshold Ventures and Blue Cross Blue Shield of Massachusetts. It was co-founded by Livongo veteran Naomi Allen who left Livongo shortly before the Teladoc acquisition. The funding will be used for staffing and to broaden its offerings. Mobihealthnews, Bizjournals, Bloomberg

The other ‘Bright’ spot in mental health company funding is Brightside Health, which raised a $50 million Series B financing round led by ACME Capital and Mousse Partners, for a total of $81 million. Brightside is for adults combining an app-driven mental health assessment, therapist match and connectivity, and automated matching to medication if needed. They market membership to payers, providers, and employers as a benefit. Mobihealthnews, FinsMes