Every year, health plans lose as much as $570 billion due to administrative inefficiencies, including slow claims processing, higher medical costs, and complex regulations. Many still use manual clinical reviews, which take a lot of time, increase compliance risks, and can lead to conflicts with providers.
Alaffia Health addresses these problems by leveraging AI in its claims operations. The company just closed a $55 million Series B funding round led by Transformation Capital, with ongoing support from FirstMark, Tau Ventures, and Twine.
This brings their total funding to more than $72 million.
Transforming claims processing from a cost centre into a dependable part of health plan operations
TJ Ademiluyi and Adun Akanni founded Alaffia to make healthcare more efficient and affordable by combining AI with clinical expertise. Their main goal is to make claims processing more reliable, so health plans can focus more on patient care.
Ademiluyi shares with TFN, ” My co-founder and sister, Adun, and I grew up in a family business focused on provider revenue cycle management, so we saw firsthand how often medical claim payments from payers made without full clinical context, leading to waste, abuse, and inaccurate payments. We started Alaffia to bring greater accuracy, transparency, and clinical rigour to those decisions, so health plans can reduce waste without increasing risk or eroding trust.”
Alaffia uses agentic AI to handle utilisation, payment integrity, and appeals. The system pulls clinical information from patient records with over 97% accuracy and is offered as either a SaaS or a fully managed service.
Ademiluyi adds, “Alaffia pairs experienced clinicians with agentic AI that understands the full breadth of claims and their supporting clinical information (e.g., medical records)—information that is often unstructured, siloed, and overlooked. Our technology extracts key clinical facts from medical records and other supporting documentation, then compares them with what the provider billed to ensure claims are paid in accordance with health plan reimbursement policies and clinical guidelines.”
The platform uses both clinician expertise and AI to review patient records. This approach has led to over 20% savings on expensive facility claims, a fivefold return on investment, and much faster review times. So far, Alaffia has saved health plans more than $100 million.
Alaffia stands out from older payment integrity tools and less transparent AI solutions by delivering clear, measurable results. Unlike Cohere Health, Olive (which closed), and PreFi, Alaffia supports the full claims lifecycle.
“Our approach is different because we combine transparent AI with clinical oversight. That balance allows us to work within complex payer rules, deliver high clinical accuracy, and produce outcomes that health plans, providers, and regulators are comfortable standing behind,” Ademiluyi elaborates.
What about diversity?
On diversity, Ademiluyi notes, “Company-wide, Alaffia’s team is 56% women and 44% men. In terms of racial representation, the whole team is 65% White, 21% Black or African American, and 12% Asian. Women make up 40% of leadership specifically, and racial diversity among leaders is 40% White, 30% Black or African American, and 30% Asian.”
What’s ahead for Alaffia?
The new funding will help Alaffia further develop its AI and expand its agent capabilities across different types of claims. The company is also quickly hiring engineers, product leads, and growth professionals to keep up with growing demand from health plans nationwide.
Ademiluyi concludes, “Our focus is on scaling what’s already working to reduce administrative waste across healthcare. We are investing heavily in research and development to advance our AI and product capabilities, launching new AI agents across additional modalities, and expanding our platform beyond payment integrity to support more of the claims lifecycle.”
