How a Former Princeton Researcher Is Helping Hospitals Challenge AI Insurance Denials: Family Dinner with Adi Tantravahi

When Adi Tantravahi left his role at Princeton University studying global conflict to co-found a startup, few would have predicted he’d turn his attention to a very different kind of arms race: one unfolding between American hospitals and insurance company denials.

On Tuesday night at The Garage’s Family Dinner, Residents gathered for a behind-the-scenes look at Tantravahi’s experience building an AI startup Cofactor AI in one of the most regulated industries in the world: healthcare.

“If I could find some way to improve the United States healthcare system, I would be creating positive value for the world. And if I do my job well, the end of the road would be pretty lucrative,” Tantravahi told Residents.

Tantravahi, a graduate of the University of Texas, is now the CEO and co-founder of Cofactor AI. His healthtech company aims to save both money and time for hospitals facing skyrocketing claims denials.

 “We’re building what I like to call the financial intelligence layer for healthcare,” he said, describing the product as a “value capture engine” for hospital revenue teams.

Cofactor AI’s recent $4 million seed round underscores the urgency of the problem they’re solving. A 2024 Experian Health poll found that 73% of healthcare leaders said claims denials are increasing, compared to only 42% in 2022.

Cofactor’s platform helps hospitals identify underpayments, prevent denials, and appeal complex cases faster and more effectively.

The idea for Cofactor AI first came to Tantravahi during a hospital visit in 2023, when he shadowed his aunt, a medical director. After a long day, he watched her sit down for hours to manually strategize over a stack of insurance denials.

“I felt like she was wasting a ton of time, because I watched that play out. I could not stop thinking about it,” Tantravahi said. “I stayed up for like 72 hours because I was determined how I was going to solve this for her.”

When Tantravahi sought out the perspective of hospital executives for his prototype, he recalled receiving mixed feedback: many praised his idea but doubted if he was the right person to pull it off. 

“For somebody that gets told ‘don’t push the red button’ and wants to push the red button, that’s a pretty big motivator,” Tantravahi said. 

From there, Tantravahi went all-in. Cofactor was formed in late 2023, and by the end of the year, the team had secured their first customer.

Yet even with early traction, the company remains lean.

“You’re looking at the main customer success person, you’re looking at the main account executive, you’re looking at the product manager,” Tantravahi said, referring to himself.

Tantravahi urged aspiring founders not to shy away from certain industries, even though they may feel impenetrable from the outside. Selling into healthcare, he warned, is “like eating glass,” a line that drew a chorus of chuckles from the room. Long sales cycles, strict compliance requirements like HIPAA, and decision-makers who can all say no but rarely yes all contribute to the difficulties. 

Still, Tantravahi urged founders at The Garage to enter industries that have the potential for meaningful innovation, as long as they have the patience and grit to outcompete others. 

“There’s a difference between hard work problems and hard problems. Hard work problems are things people have already figured out, and you just need to go figure out what they did and replicate it. It might take you a lot of time, but it’s not going to take a bunch of brain power,” Tantravahi said. “Then there are hard problems where you’re figuring out things no one’s ever done – and that’s really where the startup grind is.”

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