R1 to Acquire Phare Health, a Leading AI Platform for Automating Inpatient Coding and Pre-Bill Clinical Documentation Improvement
Acquisition Expands R1’s Agentic AI Capabilities to Help Providers Unlock Clinical and Financial Value
MURRAY, Utah, Oct. 14, 2025 (GLOBE NEWSWIRE) -- R1 (“R1” or the “Company”), an industry leader in managing and intelligently automating healthcare revenue management, today announced that it has entered into an agreement to acquire Phare Health Ltd, a healthcare technology company building AI-native solutions for inpatient coding and clinical documentation improvement (“CDI”). The transaction marks a significant step in advancing R1’s strategy to leverage cutting-edge AI capabilities to comprehensively automate the revenue cycle and move closer to real-time adjudication of medical claims.
Phare Health was founded by a team of healthcare and AI leaders, bringing experience from Google DeepMind and prominent AI research institutions. Phare Health utilizes a transformative approach to tackle the most complex inpatient coding cases. Unlike traditional systems that rely on keyword extraction, the AI engine reads all unstructured and structured data points to build a holistic fingerprint of the patient journey. This data is then cross-referenced with guidelines and coding policies to enable context-aware coding decisions with a full evidence trail. By combining Phare Health’s innovative technology in CDI and autonomous complex coding with R1’s scale and market leading DRG Validation (“DRG-V”) solution, R1 will deliver the most compelling AI native clinical intelligence solution in the market. This will enable faster, more accurate reimbursement in the short term and position R1 to deliver real-time claim adjudication.
Following the close of the transaction, which is expected to occur by the end of October 2025, the Phare Health team will join R1’s R37 innovation lab. Announced earlier in 2025, R1’s R37 AI lab has agentic applications in production with select R1 clients, including in autonomous coding where accuracy rates are already as high as 97% for service lines such as emergency room and physician office visits. The team expects further acceleration of next-generation AI applications by bringing together Phare Health’s team with R1’s engineers in the R37 lab.
“R1 has always been at the forefront of revenue cycle innovation, and our partnership with Phare Health marks a pivotal step in unifying the full spectrum of RCM, from clinical documentation to financial intelligence,” said Joe Flanagan, Chief Executive Officer of R1. “Phare Health’s physician-led, AI-native approach to coding and documentation aligns with our commitment to accuracy, transparency and responsible AI. Together, and through our R37 innovation lab, we are well equipped to bring health systems dependable, compliant solutions that ultimately reduce administrative friction and risk.”
“Our mission has always been to make healthcare reimbursement efficient, transparent and fair,” said Dr. Martin Seneviratne, Co-Founder and Co-CEO of Phare Health. “Our platform reasons over a patient’s full medical record, drawing upon guidelines and clinical knowledge to ‘translate’ between two complex languages: clinical and coding. By joining forces with R1, we can bring our mission of fair and frictionless claims to life on a much larger scale.”
“Rigorous R&D has always been one of our core values at Phare Health, and we’re excited to join R1’s R37 innovation lab, where research is rapidly transformed into impactful products that are deployed to customers,” said Lee Kupferman, Co-Founder and Co-CEO of Phare Health. “Our AI-native approach to CDI and autonomous coding combined with R1’s market-leading DRG-V solution will streamline mid-cycle workflows, improve documentation quality and enhance coding precision. Together, we will continue to help build the future of agentic revenue cycle management and drive better outcomes for patients, providers and health systems across the U.S.”
About R1
R1 is a leading provider of automation solutions that transform financial performance and patient experience for health systems, hospitals, and physician groups. R1’s flexible, proven and scalable partnership models seamlessly complement a healthcare organization’s operations, quickly driving sustainable improvements to net patient revenue and cash flows while driving revenue yield, reducing operating costs, and enhancing the patient experience. To learn more, visit: https://www.r1rcm.com.
About Phare Health
Phare Health was founded in 2023 by a group of healthcare and AI leaders and is funded by General Catalyst, Bertelsmann Healthcare Investments and Meridian Health Ventures. Through rigorous R&D, a commitment to security and compliance, and multidisciplinary excellence across clinicians, AI engineers, payments experts and operational leaders, Phare Health seeks to make healthcare reimbursement fair, transparent and effortless.
Forward-Looking Statements
This press release may contain forward-looking statements regarding future events, plans, or performance. These statements are based on current expectations, assumptions, and information available to R1’s management and are not guarantees of future results. Actual outcomes may differ materially due to uncertainties, risks, and changing circumstances, including but not limited to operational challenges, market dynamics, and other unforeseen events. All forward-looking statements are provided as of the date of this release, and R1 assumes no obligation to update them, except as required by law. Readers are cautioned not to place undue reliance on such forward-looking statements.
Contacts
R1
Eliza Rothstein / Madeline Jones
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
R1RCM-JF@joelefrank.com
Will Reilly
VP, Marketing
media@r1rcm.com
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