R1 launches AI tool to curb denials, Guthrie Clinic signs on
- R1 announced Phare Utilization Management on Sept. 16, 2026.
- Phare UM reviews 100% of cases from admission through discharge.
- The Guthrie Clinic is among the first health systems adopting it.
- One sample assessment flagged about 65% of observation encounters as inpatient.
ILLINOIS, UNITED STATES — R1 has launched an artificial intelligence (AI) utilization management tool that screens every patient encounter for payer denial risk in real time, and The Guthrie Clinic is among the first health systems to adopt it.
Traditional utilization management directs limited resources at a small subset of admissions and reviews them retrospectively.
R1 targets medical necessity denials earlier
The product, called Phare Utilization Management (Phare UM), is built on Phare OS, the company’s pre-bill architecture, according to a company press release.
R1 said Phare UM continuously reviews 100% of cases from admission through discharge, surfacing payer-specific risk and documentation gaps within a team’s existing workflow.
AI agents inside the system apply clinical judgment, assess denial likelihood and generate quantified recommendations using R1’s historical observations of real-world outcomes.
Recommendations are calibrated to each health system’s clinical policies, payer mix and denial tolerance, so utilization management teams see which cases need attention first rather than working a queue in admission order.
“Healthcare organizations have too many critical decisions occurring in disconnected workflows across the patient and financial journey,” said Joe Flanagan, chief executive officer of R1.
Early results point to status errors
The Guthrie Clinic is among the first health systems adopting Phare UM, using it to align utilization decisions with clinical necessity and reduce avoidable denials.
In a sample assessment for one customer, R1 said, Phare UM found that approximately 65% of observation encounters should have been billed as inpatient status.
The company said the finding shows opportunities to reduce revenue leakage and improve status accuracy and reimbursement performance.
Each case history carries forward across review, escalation, care team input and downstream denials, so teams can see the full record in one workflow.
R1 says it works with 1,000 providers, including 95 of the top 100 health systems in the United States.
“By surfacing the right clinical and payer insights at the right time, Phare UM helps clinicians spend less time gathering information and more time making complex statusing decisions,” said Dr. Jennifer Weinberg, vice president of physician advisory solutions at R1.
The tool keeps human judgment at the center of each decision, so status review still depends on clinical and medical billing staff as the work moves earlier in the patient stay.
For hospital finance leaders, that sharpens a sourcing question over which parts of status review, coding, prior authorization and clinical documentation stay in-house and which move to one of the top U.S. healthcare outsourcing companies.
Related news
- R1 to acquire Humata for AI prior-auth automation · 27 Aug
- Staffing, denials top revenue cycle stress in 2026 · 19 Sep
- 6 health systems outsourcing RCM functions · 18 Sep
Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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