Healthcare payments startup Turquoise Health Corp. said today it has raised $40 million in a new round of funding to try to fix the systemic inefficiencies that lead to denied payments, surprise bills and excessive costs for all parties.

The Series C round was led by Oak HC/FT and saw participation from Andreessen Horowitz, Adams Street Partners and Yosemite. It brings the company’s total amount raised to $95.3 million.

The central problem with healthcare payments is that contracts are scattered across so many different computer systems, which means that providers and insurers struggle to keep track of everything, leading to delays and other issues. It also costs an awful lot of money. According to Turquoise, the industry wastes a staggering $1 trillion on administrative spending every year. The startup wants to fix these inefficiencies by bringing pricing data, contract details and clinical rules into a single platform that supports real-time transactions and provides clear, auditable rates on healthcare services.

In an interview with TechFunding News, Turquoise co-founder and Chief Executive Chris Severn said he founded the company in 2021 after a firsthand experience with the challenges of healthcare pricing. Due to his previous experience in the healthcare technology industry, where he worked on products and strategy, he has a solid understanding of how disconnected contracts, claims and payments lead to frustration for providers and patients alike.

The solution, he said, is to replace the confusing manual processes that characterize healthcare payments with a transparent platform that ensures accurate pricing. He sees Turquoise becoming the core platform for real-time healthcare transactions, and wants to put an end to surprise bills. “Turquoise Health is a multi-sided healthcare pricing and payment platform that brings together the most complete pricing data, contract intelligence, transaction rails, and AI-powered workflows,” he explained.

Turquoise offers three core products within its software suite. They include Clear Rates, which merges machine-readable files, claims data and Medicare benchmarks into clear, auditable rates for each payer and provider pair, Severn said. There’s also an artificial intelligence-powered tool called Contracts, which enables users to quickly search for important terms and conditions buried in contracts. Meanwhile, AskTQ is an AI chatbot that responds to natural language enquiries about contracts and pricing for healthcare services, eliminating the hours it would take for humans to surface the answers by manually combing through documents.

Because of its extensive healthcare contract library and its deep industry expertise, Turquoise has a strong advantage over rival systems. That’s reflected in the platform’s adoption – it’s used by 10 of the top 25 health systems in the U.S., four of its five biggest payers and nine of the country’s top ten pharmaceutical giants. “Our goal has always been to move the industry toward clear, accurate and actionable healthcare pricing,” Severn said. “By evolving from a data vendor to a full workflow and transaction platform, we are building the infrastructure for transparent, real-time payments.”

The cash from today’s round will help Turquoise to expand its market reach and speed up product development as it strives to add more AI features and transaction tools. It will also grow its team beyond its current 200 employees. While its immediate goal is to make transparent pricing the standard for U.S. healthcare payments, it also wants to enable fully automated, same-day payments for all market participants.

Oak HC/FT partner Vig Chadramouli said Turquoise sits in a unique position at the center of the healthcare industry. “Its platform doesn’t just provide data,” he stressed. “It embeds transparency directly into the negotiation and payment workflows of the industry’s largest stakeholders.”

Image: Turquoise Health