AI-powered Medicaid managed care startup Circulo Inc. is now a licensed insurer in Ohio, but didn’t need that state OK to grow to 220 employees and start operating.
Spun out from Olive AI Inc. and built on its AI automation infrastructure, the Columbus company plans to analyze troves of participant data for the most effective treatment protocols – analytics that become more powerful the more patients are enrolled. The mission has broadened from managed care to improving access to healthcare for underserved populations.
“I’m not aware of another tech company going all in on this space like we are,” said Mike Renn, Circulo director of operations.
The Ohio Department of Insurance approved subsidiary Circulo Health of Ohio Inc.’s state license on Nov. 10, the agency confirmed.
Meanwhile, over the summer Circulo acquired a provider of home and community-based services for Ohioans with developmental disabilities, Renn said. The agency name is not disclosed, but it is operating in five counties and aims to expand statewide.
These service providers are regulated by the Ohio Department of Developmental Disabilities and paid under a different part of the state-federal Medicaid program.
The company employs more than 100 direct caregivers. Circulo replaced paper with digital tools, Renn said, and raised those starting wages to $15 hourly to improve recruitment and retention in a high-turnover job.
About 100 employees are salaried software engineers and varied corporate roles, all joining in the last nine months.
Next year, Circulo Health intends to bid on a Medicaid managed care pilot written into the latest two-year state budget. The law calls for an Ohio startup to use AI and automation to lower costs in a small population of adult enrollees in the Affordable Care Act Medicaid expansion.
The Ohio Department of Medicaid is developing parameters of the program and plans to release an RFP in 2022, a spokeswoman said via email.
“We will bring everything to the table to have it be a successful RFP,” Renn said.
Olive CEO Sean Lane raised $50 million in venture capital in February to found Circulo, where he’s also CEO. He said he chose Medicaid instead of commercial insurance because its population is most in need of improved health access and outcomes.
A pro-forma business plan, submitted to the Insurance Department as part of licensure, estimates an October launch with 1,000 members, staying at that level for the second full year of operations, then tripling membership in year three. Premium revenue is estimated at $24 million when there are 3,000 members for a full year.
Circulo would need to subsidize the insurance subsidiary with a cumulative $6 million to meet statutory capital requirements during that time, according to the document obtained through a public records request.
A 15,000-square-foot office opens this week at 875 N. High St. in the Short North. Called “The Lab,” it’s the “epicenter for collaboration and innovation,” Renn said, and will host staff retreats.
“We believe it will help us in recruiting local talent,” he said.
Like Olive, Circulo allows office employees to work where they are most effective. About one-third live in Central Ohio. The rest are around the country, including Renn in Las Vegas. The Ohio State University accounting graduate most recently was chief of staff to the CEO of MGM Resorts International, where he started in 2017 after three years each at Deloitte and Uber Technologies Inc.
A friend at Olive and Circulo investor Drive Capital LLC made the introduction to Lane, who hired Renn in February to build the team and oversee finance, facilities and legal matters.
Lane dedicates weekly time to each company to lead strategic direction and is available as needed.
“It’s a model that works out really well for us,” Renn said.