Brave Health has landed $40 million in a Series C funding round led by Town Hall Venture’s newly-announced $350 million fund.
The Miami-based, Medicaid-focused virtual behavioral health company has raised a total of $60 million. It will use the new funding to expand into new markets and into more value-based care arrangements with payers.
The company will also put the funding toward building its data and technology infrastructure. This infrastructure will better enable its patient engagement and outcomes tracking systems. Care tracking and engagement are key to Brave Health closing and launching value-based care deals in the 18 states where it operates, a news release states.
This was Town Hall Ventures’ first investment from its third fund. The venture capital firm, founded by former Biden and Obama health care leader Andy Slavitt, joined existing investors Union Square Ventures and City Light Capital in the round.
Brave Health creates partnerships with local health care providers and health plans that focus on getting Medicaid patients referred to mental health services into care as quickly as possible.
While partnerships with local providers are vital to getting patients, Brave Health strikes up financial relationships with payers that operate Medicaid managed care organizations, company CEO and co-founder Anna Lindow told Behavioral Health Business.
The company presently has three value-based care contracts with payers in place; Brave Health struck its first value-based contract with Molina Healthcare of Texas.
Speed to care and activation of care is a common measurement of value through the three value-based care arrangements, Lindow said.
Brave Health employs nearly 200 behavioral health providers — including therapists, psychiatrists, peer support specialists, and nurse practitioners. The company engages with providers as employees rather than contractors, a common practice among digital behavioral health companies.
“Nearly 1-in-4 people get their insurance through Medicaid in the United States. Yet the number of providers who accept Medicaid has actually decreased in certain places,” Lindow said. “It’s an area where we feel like there’s an enormous amount of opportunity for innovation, for progress and for partnership with health plans.”
About 50% of all U.S. counties do not have a psychiatrist or addiction medicine specialist while about 23% of all behavioral health prescribers (including psychiatrists) don’t see any Medicaid beneficiaries, according to research from George Washington University.
Town Hall Ventures made the investment because Brave Health seeks to systematically improve behavioral health delivery in addition to the health of medically vulnerable and underserved populations, Town Hall Ventures Partner Anna Fagin told BHB.
“In the last month Brave Health has helped more than 4,000 people on Medicaid — [at] the most vulnerable point in their life — find a behavioral health resource when almost no one is there to help them,” Fagin said, adding she and Town Hall Ventures expect the company to continue to quickly grow.
Year to date, Brave Health has received 23,000 referrals which represents an exponential growth in its patient count since beginning to work with health plans in 2019, the release states. The company offers outpatient services and covers over 65 million lives through over 200 health plan partnerships.
On top of the growth trajectory, Town Hall Ventures seeks to place investment in health care companies that “can take accountability for the results that they’re delivering and get compensated for it.”
“You have to be able to be confident in your results before you’re ready to take accountability for them,” Fagin said. “And that’s where this infrastructure and upfront investment comes into place. Behavioral health has been an area where we see massive opportunity to take that accountability and it’s what enables massive impact at scale.”
Town Hall Ventures also has placed investments in value-based care-oriented addiction treatment and mental health provider Eleanor Health which landed a $50 million round in April.
While Medicaid is notorious for patients that are more acute and bring with them health plan reimbursement that is lower than average, Lindow said that value-based care arrangements allow for operators to find financial success while impacting health at scale.
“That is exactly what we’ve built and what we are going to continue to build,” she added.
Companies featured in this article:
Brave Health, City Light Capital, Town Hall Ventures, Union Square Ventures
