Health Record Exchange Firm Raises $2.6 Million

MedVirginia Inc. — a patient health record data exchange company — has raised $2.6 million by selling stock to outside investors, according to a notice the company filed recently with the U.S. Securities and Exchange Commission.

The Richmond, Virginia-based company is doing business as Clareto.

The company said, in a separate announcement of the new round of funding, that it wants to use the financing to expand sales of patient health information to life insurance underwriting operations.

Health care providers started the company in 2000. The company launched MedVirginia Solutions, a health information exchange aimed at health care providers, in 2006.

The Social Security Administration began using the company's services in Social Security Disability Insurance claim determinations in 2009.

Clareto has already been offering life insurers access to the kind of electronic health data covered by the Health Insurance Portability and Accountability Act privacy and patient consent rules, the company says.

The company says it wants to use the new funding to turn its health information exchange program into a national data exchange player.

Dave Dorans, the company's chief executive officer, said in a statement that his company sees expanding life insurance underwriters' access to electronic health data as a way to increase Americans' use of life insurance, by simplifying the underwriting process.

Health Catalyst Capital Management LLC, a private equity firm based in Salt Lake City, was the top source of financing in the new round of financing, according to Clareto.

Charles Boorady, the founding managing director of Health Catalyst, said in a statement that his company sees Clareto as "bringing much-needed innovation to one of the most regulated and stationary industries in existence."

Clareto and Health Catalyst did not give details about the size of the new round of financing outside of Clareto's deal announcement. The financing package could have included debt financing or other types of financing beyond what was disclosed in the filing.

Health Catalyst said in a separate SEC filing that it raised $12.2 million by selling stock to investors earlier this month.

Crunchbase reported earlier this month that Health Catalyst has raised about $15 million through a recent stock sale, and borrowed about $85 million.

— Read Sequoia-Backed Health Catalyst Swaps Stake for Hospital's Data, on ThinkAdvisor.

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