CirraGroup Secures Funding to Help Cure Growing Medical Debt Crisis
CirraGroup, the first crowdsourced medical debt settlement solution, announced today that the startup has closed a $500,000 Series B equity strategic investment from the Lafayette General Foundation’s Health Innovation Fund (Lafayette, LA).
“CirraGroup’s novel approach to medical debt resolution addresses an on-going 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.”
Medical debt in the U.S has reached crisis levels, expected to eclipse the nation's consumer debt threefold and reach $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 leads 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 business located in Louisiana.