Charta Health Chose to Scale Instead of Just Sustaining Profits

Breaking into healthcare as outsiders is no small feat. For Charta Health’s co-founders, Justin Liu and Scott Morris, transitioning from AI infrastructure at Rockset to tackling medical billing inefficiencies required not only technical expertise but also a deep understanding of an industry known for its regulatory complexity and resistance to change.

“One of the biggest challenges was learning an entirely new industry from the ground up,” Liu shared in an exclusive interview with AIM Research. “Healthcare is deeply complex, highly regulated, and resistant to change. But coming in as outsiders meant we weren’t weighed down by ‘how things have always been done,’ which allowed us to spot inefficiencies and rethink solutions from first principles.”

Rather than relying solely on their AI backgrounds, Liu and Morris took a rigorous approach to learning the field. They spent a year earning medical coding credentials and speaking with over 100 healthcare professionals to deeply understand the pain points. This foundational research shaped Charta’s core mission which was streamlining outpatient medical chart reviews with AI to alleviate the administrative burden on providers.

Why Not Stay in AI Infrastructure?

Before launching Charta, Liu and Morris were at the forefront of AI innovation at Rockset, an analytics database company that was later acquired by OpenAI. Given their expertise, staying in AI infrastructure seemed like an obvious choice. But they wanted to apply AI where it could drive tangible, real-world impact.

“AI infrastructure is an exciting field, but we wanted to build something where AI didn’t just optimize processes—it fundamentally improved outcomes,” Morris explained.

The inefficiencies in healthcare, particularly in administrative workflows, stood out to them. Patient charts are the data foundation of the entire healthcare system, yet reviewing them remains a tedious, manual process. Errors in documentation and coding lead to denied claims, lost revenue, and increased workloads for providers. Instead of optimizing AI for AI’s sake, Liu and Morris saw an opportunity to redesign these workflows from the ground up.

“The more we explored healthcare, the clearer it became that this wasn’t just an interesting technical challenge—it was an opportunity to rethink critical workflows,” Liu said.

Charta’s Differentiation in a Competitive AI Landscape

The AI-driven medical coding space is already competitive, with companies like CodaMetrix and SmarterDx automating different aspects of documentation and billing. However, Charta takes a distinct approach by focusing specifically on outpatient providers—particularly those in high-volume, low-reimbursement specialties such as primary care, urgent care, and behavioral health.

“SmarterDx primarily serves inpatient settings, helping hospitals with second-level chart reviews,” Morris noted. “CodaMetrix operates across inpatient and outpatient but focuses purely on medical coding. Charta, on the other hand, provides an end-to-end chart review platform designed specifically for outpatient workflows.”

By reviewing 100% of patient charts in real time, Charta not only ensures accurate coding but also prevents claim denials and improves documentation compliance. Unlike one-size-fits-all solutions, its AI platform adapts to each provider’s needs, offering personalized workflow integration that reduces administrative workload while maximizing revenue capture.

How Much Can AI Automate?

The medical billing industry is ripe for automation. Currently, only about 1% of provider charts are manually reviewed before billing, with most errors only caught in post-billing audits. AI platforms like Charta can now analyze every chart in real time, reducing errors, increasing revenue integrity, and minimizing compliance risks.

However, Liu and Morris emphasize that AI in medical billing isn’t about replacing jobs—it’s about reallocating human effort to higher-value tasks.

“Instead of spending time on repetitive chart reviews, billing teams can focus on complex cases, provider education, and strategic revenue optimization,” Liu explained. “Some traditional roles in manual medical coding and compliance auditing may shift, but the real impact of AI is in expanding human capacity.”

Why Charta Chose to Raise Venture Funding

Charta Health achieved profitability just 60 days after its initial outreach, landing multiple large contracts before officially launching from stealth in June 2024. Despite this, the company made a strategic decision to raise venture funding instead of continuing to bootstrap.

“At first, we figured we’d keep things lean,” Liu admitted. “But as more providers came on board, it became clear that the demand was way bigger than we expected.”

The funding wasn’t about survival—it was about scaling fast enough to meet demand. Charta wanted to expand its sales team, accelerate product development, and reach a wider market.

“We knew we had something special,” Liu said. “Raising capital allowed us to go all-in on growth and deliver our solution at scale.”

Misconceptions About AI in Healthcare

As Charta pitched its vision to investors, the team frequently encountered misconceptions about AI in healthcare. One of the biggest concerns? That AI would replace jobs in medical billing.

“The reality is AI isn’t here to replace people—it’s here to remove the repetitive, time-consuming tasks that slow them down,” Morris explained. “By automating administrative work, AI allows billing teams to focus on higher-value tasks like complex case handling and revenue optimization.”

Another misconception is that AI can instantly take over all administrative functions. In reality, AI is most effective when integrated into existing workflows, enhancing accuracy and efficiency rather than disrupting operations.

“Every provider group, specialty, and payer has unique requirements,” Liu noted. “That’s why Charta is designed to be flexible and personalized, rather than a rigid, one-size-fits-all solution.”

With new regulations emphasizing healthcare price transparency, accurate billing and documentation are under increased scrutiny. Charta’s AI-driven platform helps providers stay compliant by ensuring claims are fully documented and properly coded before submission.

“As regulations evolve, this is a huge opportunity for AI to play a bigger role in revenue cycle management,” Morris said. “By automating compliance checks and improving financial accuracy, providers can maintain transparency without adding more manual work.”

AI is increasingly shaping the future of healthcare administration, providing solutions to long-standing inefficiencies in medical billing and compliance. With its latest funding, Charta Health plans to expand its sales team, secure more contracts, and further develop its AI-powered platform to support additional medical specialties. 

The company remains focused on high-volume, low-reimbursement sectors—areas that are often underserved by existing AI-driven solutions, which tend to prioritize inpatient care.