R1 to acquire Humata Health for AI-driven prior authorizations

R1 RCM announced today that it will acquire prior-authorization technology provider Humata Health to bolster its Phare Operating System, launched in October 2025.

The Phare OS is healthcare's first AI-powered revenue operating system, according to R1. It is designed to autonomously orchestrate, connect and streamline the entire revenue cycle management process from patient intake to final payment.

Prior authorizations are a major, albeit burdensome, part of revenue cycle management, driving inefficiencies and delays in care. Humata seeks to improve the process through a "touchless" experience that leverages agentic AI.

This is the strategic value of the deal, according to Steve Albert, chief strategy and growth officer at R1, who would not disclose its financial details at this time. The agentic AI enables "connectivity across hundreds of payers," reducing friction across stakeholders from patients and clinicians to health systems and payers, he told RevCycle Management.

Humata's prior authorization technology uses agentic AI to match policies and connect to payers in real time, the announcement explained. It can determine requirement logic, create clinical bundles, deliver evidence for payer attestations and manage requests end-to-end across specialties.

The company recently expanded its reach into the ambulatory space, announcing in June a standalone prior authorization platform for independent practices, as well as regional health centers and specialty clinics.

The emphasis on applying agentic AI to prior authorizations aligns with R1's goal of creating an autonomous revenue cycle through Phare OS, which takes a system-level approach to revenue cycle technology versus deploying point solutions. Agentic AI is critical to this mission, enabling full automation of some revenue cycle functions.

"Upon completion of the acquisition, Humata Health will significantly enhance our coverage of the authorization process, advancing our strategy to have the most intelligent and integrated pre-bill architecture in the industry through Phare OS," Albert stated.

R1 expects to close the deal by the end of the third quarter, upon which Humata would fold into R1's agentic AI development team through its R37 innovation lab.

The company also aims for the acquisition to accelerate the prior authorization process -- a top goal for the healthcare industry writ large.

"Today's announcement marks an important step forward in our journey to automate the revenue cycle and make real-time authorizations a near-term reality," Joe Flanagan, R1's CEO, said in a press release.

The healthcare industry is actively crossing the threshold into real-time prior authorizations, largely driven by upcoming federal interoperability mandates requiring faster turnaround times. These mandates rely on application programming interfaces to facilitate faster prior authorizations at the start of next year by enabling standardized data-exchange pipelines among key stakeholders, including patients.

In fact, the EHR giant Epic announced yesterday that four health systems have piloted a new prior authorization API that has brought them closer to real-time determinations. The API specifically collects prior authorization requirements within the EHR system when a clinician places an order or an appointment is scheduled.

AI is also playing a part in streamlining the process, serving as an operational engine that powers functions such as automated clinical evidence extraction, form-filling and responses, and denial risk intelligence.

For Humata, AI helps to close the gap between payers and providers, Jeremy Friese, founder and CEO told RevCycle Management.

Prior authorizations remain a major friction point for the two sides, according to a recent survey report from Zelis. This has triggered a massive shift in the revenue cycle management technology market, shifting this once back-office problem to the front-end of the technology battleground.

EHR systems are aligning with this shift, but revenue cycle management vendors are going all in on AI -- particularly agentic AI -- to differentiate their products and deliver more value to customers.

Jacqueline LaPointe is an Executive Editor at Xtelligent Healthcare Media, covering revenue cycle management, healthcare payers, health policy and health IT since 2016.