Waystar is fighting a lawsuit from an Ohio economic development organization over its purchase of Olive AI, Columbus Business First reported.
The revenue cycle management company bought some of the assets of the now-defunct startup in October. JobsOhio then sued Waystar and another Olive buyer, Humata Health, seeking reimbursement for the $598,000 in training and recruitment funding it gave Olive, which missed the agreed-upon hiring targets, according to the Jan. 17 story.
Olive shut down in October, selling its data clearinghouse and digital insurance determination units to Waystar, a revenue cycle management firm, for $10 million and its prior authorization business to the newly launched Humata for $1.25 million, Business First reported in December. (Olive had previously sold its utilization management arm to Availity, another revenue cycle company, for nearly $35 million).
"JobsOhio can seek to recover from Olive AI the money that Waystar paid," Waystar said in response to the complaint, according to the news outlet. "Waystar was unaware of Olive Al's purported obligation to JobsOhio until it was served with the complaint in this lawsuit. Accordingly, Waystar acquired the assets from Olive Al in good faith and without intent to defraud, harm, or otherwise impact JobsOhio."
In the lawsuit, JobsOhio called the asset sale a "fraudulent conveyance" to get out of paying the private nonprofit back, Business First reported. A judge extended the deadline for Humata to submit its response.
Olive was once valued at $4 billion and raised more than $850 million in venture capital funding. It had more than 900 hospital clients in 2021.