What You Should Know
- The Launch: Procode Inc., an AI-powered revenue cycle management (RCM) company for private practice surgeons, has officially emerged from stealth with $4M in funding.
- The Acquisition: In a bold go-to-market move, the startup has already acquired The Auctus Group, the leading U.S. medical biller for plastic surgeons and a top-three biller in dermatology. The Auctus Group currently serves more than 300 providers.
- The Backers: The $4M investment was led by Story Ventures, with participation from CHAP Health Ventures, Progression Fund, and Dmitry Shevelenko (Chief Business Officer at Perplexity).
- The Technology: Procode’s flagship tool, the Coding Copilot, enables medical coders to code 90% faster and with greater accuracy by automatically translating operative reports into precise billing and diagnostic codes.
- The Traction: The integration of Procode’s AI into The Auctus Group’s existing infrastructure is already paying off; the company added $2 million of Annual Recurring Revenue (ARR) in just five months post-acquisition.
Buying the Distribution Channel: The Auctus Group
Instead of trying to sell a standalone software tool to skeptical, burned-out office managers one clinic at a time, Procode bought the incumbent. Founded in 2012 by John Gwin, The Auctus Group is a massive player in the specialty billing space—ranking as the leading U.S. biller for plastic surgeons and a top-three biller in dermatology, with a client base of over 300 providers.
“Most RCM AI products are vaporware,” admitted Gwin, who will stay on to lead the RCM business under Procode. “I’ve searched for AI technology that can better equip our team to deliver better billing outcomes for clients and, in Procode, we finally found that.”
By acquiring Auctus, Procode gets immediate, massive distribution and a mountain of proprietary workflow data to train its models.
The AI Infrastructure
Procode is deploying a three-pronged technology suite to supercharge the newly acquired Auctus client base:
- Procode AI Coding Copilot: This tool acts as an autonomous translator, reading complex surgical operative reports and instantly mapping them to the correct billing and diagnostic codes. According to the company, it enables medical coders to work 90% faster with significantly higher accuracy.
- AR/Denials Management Engine: An AI-driven system that accelerates decision-making around accounts receivable, payment posting, and charge posting to fight back against coding-related insurance denials.
- Auctus Provider App: A mobile application (available on iOS and Android) that puts real-time financial and claims data directly into the surgeon’s hands, offering unprecedented transparency into their own revenue cycle.
“As a surgeon, choosing a medical biller means trusting all of your insurance-based income to one company,” noted Dr. Rezzadeh, Procode’s co-founder. “We’re building technology that ensures that providers are reimbursed fairly for procedures that they perform, and that they are reimbursed faster than ever before.”
