LAFAYETTE, La.--(BUSINESS WIRE)--CirraGroup, the first crowdsourced medical debt settlement solution, announced today that the startup has closed a $500,000 Series B equity investment from the Lafayette General Foundation’s Health Innovation Fund (Lafayette, LA).
“CirraGroup’s novel approach to medical debt resolution addresses an ongoing challenge for all hospitals,” states Cian Robinson, Executive Director for the Lafayette General Foundation. “Our investment will help CirraGroup expand and commercialize its solution, capitalizing on the growing demand for effective patient debt resolution, using their unique crowdsourcing model.”
“Keeping a consumer focus in all our design is essential to tackling the U.S. medical debt crisis,” says Mike Ducote, COO of CirraGroup. “The Health Innovation Fund’s investment in CirraGroup allows us to continue to improve our platform and encourage patients and providers to jointly resolve financial obligations.”
The shift in healthcare costs to patients has been fueled by the introduction of the Affordable Care Act, which is driving medical debt to crisis levels and is expected to eclipse the nation’s consumer debt threefold by reaching $107 billion this year. A report by the Consumer Financial Protection Bureau demonstrated that 42.9 million U.S. residents have outstanding medical debt. Report findings show that an individual with overdue medical debt owes, on average, $1,766. Medical expenses comprise more than half of debt on credit reports, and half of consumers with debt from medical expenses showed no other signs of financial distress.
“Today, medical debt is much more common than people realize,” says Mark Fontenot, CEO of CirraGroup. “With the Affordable Care Act and increased patient out-of-pocket costs, providers are compelled to use complicated legacy billing processes that often lead to uncertainty and confusion about a patient’s responsibility for their portion of the bill. We have developed unique solutions to help providers and their patients increase visibility on unpaid balances while offering avenues for settlement and resolution.”
Lafayette General Foundation’s Healthcare Innovation Fund was capitalized through a $1.5M investment from Lafayette General Health (LGH) and $1M from the Louisiana Seed Capital Program under the Louisiana Economic Development Corporation (LEDC). LEDC allows investment funds such as HIF to leverage the Federal Treasury Department State Small Business Credit Initiative funds with private funds to invest in seed and/or early stage businesses located in Louisiana.
About U.S. Medical Debt
The Affordable Care Act has lowered the uninsured rate in the U.S., however, the number of Americans with a high deductible health plan is increasing. Almost 43 million U.S. residents have outstanding medical debt which is expected to deplete more than 15 million people’s savings to cover medical bills. Hospitals already run on very thin margins and the result of medical debt on hospitals has been staggering, contributing to nearly $50 billion in uncompensated care each year and leaving hospitals historically failing to collect 65 cents of every patient dollar billed.
Located in Louisiana, CirraGroup is the first Fintech medical debt settlement solution to tackle what has become one of the country’s most egregious consumer and industry crises. The Company develops technology that harnesses the power of crowdsourcing to assist patients and providers with resolving financial obligations in a secure, compliant, and dignified environment. Its cloud-based suite of applications provides a convenient and cost-effective solution to the growing medical debt problem. CirraGroup is backed by a strategic investment from Lafayette General Health Innovation Fund.
About Lafayette General Foundation
It is the mission of Lafayette General Foundation to enable investment in innovation that furthers the mission of Lafayette General Health, Acadiana’s only community-owned, non-profit health system. We support innovations that transform how care is delivered to improve outcomes, satisfaction and financials. We empower the people of Acadiana to invest in creating a healthier future for all.
For further information about CirraGroup, please see our website at www.cirragroup.com.