Red Sky Health Launches Outcome-as-a-Service to Fix Health Insurance Claim Denials at Scale
HealthTech / Clinical Intelligence | 4 min read
Red Sky Health, provider of an AI-driven platform that remediates denied health insurance claims, has announced a pivotal shift in how it delivers its solution — moving from a traditional SaaS model to an Outcome-as-a-Service (OaaS) approach. Under this model, Red Sky Health is only paid when it successfully recovers revenue for its customers — directly aligning the company's financial compensation with the actual outcomes it delivers. The announcement, made on 30 March 2026, follows Gartner's identification of OaaS as a major emerging paradigm shifting enterprise purchasing from software access to guaranteed, AI-driven business results.
"Unlike other software offerings that focus on surfacing problems, this solution fixes claims denials that are costing hospitals billions of dollars a year. With our new OaaS delivery method, our financial compensation is based on the direct revenue impact recovered by customers, not activity metrics. Because Daniel is not another analytics tool, we don't just identify problems, we fix them and drive measurable financial results for providers."
— Dean Margolis, CEO, Red Sky Health
The Problem: A Billion-Dollar Drain on Healthcare Providers
Healthcare billing teams across the US are drowning in denied claims, delayed reimbursements, and manual workflows that do not scale. Denied health insurance claims cost hospitals and providers an estimated US$262 billion in lost revenue annually, draining resources and limiting patient access to care. With more than US$4.5 trillion in insurance claims processed each year, denial rates have reached historic highs — and 84% of healthcare organisations have identified reducing denied claims as a top operational priority. The US healthcare revenue cycle, built around 10,000+ CPT codes and constantly shifting payer rules, was never designed for precision — making claim denials one of the most invisible sources of revenue leakage in the sector.
Meet Daniel: The AI Platform That Fixes, Not Just Finds
At the heart of Red Sky Health's OaaS offering is Daniel — its proprietary AI platform that uses advanced machine learning and generative AI algorithms to analyse historical claims data, identify and correct errors, and automatically resubmit corrected claims to payers in real time. Unlike analytics dashboards that surface problems and leave remediation to billing teams, Daniel executes correction end to end — identifying root causes at the procedure level and generating precise corrective actions including codes, modifiers, and payer-specific changes, then preparing and resubmitting the claim without manual rework. The three core capabilities that differentiate the platform are:
- • AI-Driven Denial Remediation — root causes identified at the procedure level, precise corrective actions generated (codes, modifiers, payer changes), and the model continuously improves based on outcomes from resubmitted claims
- • Automated Claim Transformation — fixes applied programmatically and claims prepared for resubmission without manual rework, eliminating repetitive billing tasks and accelerating turnaround time
- • Flexible Deployment via PMS Integration — connects directly to the healthcare provider's Practice Management System and integrates with clearinghouses, payers, and electronic health records to identify, fix, and resubmit denied claims within existing workflows
The OaaS Shift: Incentives Aligned With Outcomes
The move to Outcome-as-a-Service represents a structural realignment of how healthcare technology is sold and measured. By shifting away from subscription access to performance-based compensation, Red Sky Health ensures its success is inseparable from its customers'. This helps providers recover revenue faster and allows recovery professionals to concentrate on the most complex cases — while Daniel handles the high-volume, repeatable remediation work at scale. Red Sky Health plans to continue expanding Daniel's capabilities and onboarding new healthcare provider customers to the OaaS model.
Key Takeaways
- • Red Sky Health has pivoted from SaaS to an Outcome-as-a-Service (OaaS) model — its compensation is now directly tied to the revenue it successfully recovers for customers, aligning incentives with financial outcomes rather than software access or activity metrics.
- • Denied health insurance claims cost US hospitals and providers an estimated US$262 billion in lost revenue annually — out of US$4.5 trillion in annual insurance claims — making denial remediation one of the most valuable and underserved problems in healthcare finance.
- • Daniel — Red Sky Health's proprietary AI platform — uses ML and generative AI to identify root causes at the procedure level, generate precise corrective actions (codes, modifiers, payer changes), and automatically resubmit corrected claims without manual intervention.
- • Three core platform capabilities: AI-Driven Denial Remediation (corrections, not just insights), Automated Claim Transformation (programmatic fixes + resubmission), and Flexible PMS Integration (connects to existing billing software, clearinghouses, payers, and EHRs).
- • The OaaS model frees recovery professionals to focus on the most complex cases — while Daniel handles high-volume, repeatable denial remediation at scale. Red Sky Health is expanding Daniel's capabilities and onboarding new provider customers under the OaaS framework.