Buyer’s remorse: How a Medicare Advantage business is strangling one of its first funders

When NaviHealth began building a business around using algorithms to scrutinize the care of older patients a decade ago, one of the country’s largest chains of inpatient rehab and long-term care hospitals was among the first to invest.

Select Medical cut a check of about $5 million — a rounding error for a conglomerate that generates more than $6 billion of revenue every year. But it was a substantial sum to put into NaviHealth, a startup that would be working directly against Select Medical’s financial interests. Health insurance companies hire NaviHealth to mine medical data and predict the post-acute care a patient will need. A STAT investigation found Medicare Advantage insurers are routinely using that unregulated technology to deny care, unbeknownst to patients and regardless of whether they need the treatment.

Now, years after exiting its investment, Select Medical is publicly bashing the company it once backed. 

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