Alaffia Health Secures $55M Series B to Expand AI Claims Processing Platform

Healthcare AI specialist Alaffia Health has secured $55 million in Series B funding led by Transformation Capital, accelerating its mission to transform health plan claims processing through automation. The investment comes amid growing pressure on insurers to reduce administrative expenses, which account for 15-30% of healthcare spending according to CMS data.

Alaffia's platform uses machine learning to analyze medical claims in real-time, flagging billing errors, potential fraud, and unnecessary treatments. Current systems process claims within 48 hours at 98% accuracy, reducing manual review workload by 70% according to company metrics. The solution integrates directly with major payer systems like Epic and Cerner through API connections.

The timing aligns with rising industry pain points: US healthcare fraud costs exceed $100 billion annually, while manual claims processing averages $10-15 per transaction. With Medicare Advantage enrollment projected to reach 33 million by 2027, payers face mounting pressure to optimize operations. Competitors like Olive AI and Cotiviti have seen similar investor interest, with healthcare administration AI startups collectively raising $2.1 billion in 2025.

This funding enables Alaffia to expand its engineering team by 40% and develop new modules for prior authorization automation and provider contract analytics. The company plans integration with emerging large language models to interpret complex clinical notes, potentially cutting determination times from days to minutes. With Transformation Capital's healthcare fintech expertise, Alaffia is positioned to capture market share in the $15 billion claims management sector as payers accelerate digital transformation initiatives.