Inside India’s medical-coding army and Carlyle’s USD 400M bet on AI

Every time a patient in Ohio or Texas is discharged from a hospital, their diagnosis, procedures, and treatments have to be translated into a five- or seven-digit code before an insurer will pay the bill. Get the code wrong, and a claim bounces back denied, unpaid, or under-reimbursed. Increasingly, the people doing that translation work sit not in Ohio or Texas, but in Chennai, Coimbatore, and Gurugram.

Over the past two decades, India has quietly become the back office for American healthcare billing. Tens of thousands of graduates, many holding bachelor’s degrees in life sciences, microbiology, nursing, physiotherapy, or Ayurveda, are trained and certified as medical coders and revenue-cycle specialists, then put to work reading US clinical notes and assigning the correct ICD-10, CPT, and HCPCS codes that determine whether a hospital gets paid in full, partially, or not at all. It’s a trade that barely existed a generation ago and now underpins a multi-billion-dollar outsourcing industry.

That industry just became the subject of one of the more interesting private equity bets of the year.

Two companies, one platform, one IPO
In May 2026, global investment firm Carlyle Group acquired majority stakes in two US-based healthcare revenue-cycle-management (RCM) firms, Knack RCM and EqualizeRCM, and merged them into a single platform. Knack, headquartered in Woodbridge, New Jersey, brought scale: more than 8,000 employees spread across roughly ten delivery centers in the US, India, and the Philippines, run through its “Workmate” orchestration software. EqualizeRCM added depth, serving physician groups, hospitals, ambulatory surgery centers, labs, and rural providers, along with a proprietary payer-enrollment system and an AI tool called Bill Smart, built to predict and head off insurance claim denials before they happen. Carlyle funded the deal through its Carlyle Asia Partners VI and Carlyle Asia Partners Growth II funds.

Barely two months later, Carlyle moved again, this time hiring Goldman Sachs and JM Financial to explore listing the combined entity on Indian stock exchanges, seeking to raise up to $400 million in what would be one of the largest India-linked healthcare IPOs of the cycle. The offering’s size and timing are still being worked out, with a listing possible in late 2026 or early 2027, but the logic is already clear: Carlyle wants public markets to pay a premium for a company that sells American hospitals and doctors’ offices an unglamorous but indispensable service, getting them paid.

Why the industry is booming
US healthcare providers are under mounting financial pressure. Margins are being squeezed by rising labor costs, an aging population, and a structural shortage of billing and coding staff domestically. At the same time, the US health system’s ongoing shift toward value-based care, where reimbursement depends on documented outcomes rather than simple fee-for-service billing, has made the coding and claims process more complex, not less. Every layer of

complexity is a reason for a hospital finance chief to outsource the headache rather than staff up in-house.

That has made India, with its large pool of English-speaking science and paramedical graduates, the default place to send this work. A BSc in life sciences or a diploma in a clinical field doesn’t lead to many high-paying jobs in India’s domestic market, entry-level lab and sales roles typically pay Rs 15,000–20,000 a month. Medical coding offers a better-defined ladder: after several months of training in anatomy, physiology, and the coding manuals used by US insurers, candidates sit for certification exams administered by bodies like the American Academy of Professional Coders (AAPC) to become Certified Professional Coders. Entry-level certified coders in India typically earn in the range of Rs 2.5–4 lakh a year, rising to Rs 7–12 lakh or more for senior coders, auditors, and trainers, a meaningful step up, and one with a visible career path into revenue-cycle management roles overseeing entire client accounts.

The AI question
The obvious threat looming over this entire business model is artificial intelligence. Large language models are already reasonably good at reading clinical documentation and suggesting billing codes, and every major RCM vendor, including Knack and EqualizeRCM, now markets itself as “AI-native,” using automation to flag high-confidence, routine claims for straight-through processing.

But the emerging consensus in the industry, echoed by coding-practice groups and RCM executives, is that full automation remains risky. Clinical documentation is often ambiguous, inconsistent, or incomplete, and an AI model that misreads intent can just as easily cause an expensive wave of claim denials or compliance violations as it can prevent one. The more durable model so far is a hybrid one: AI systems triage the easy, well-documented cases automatically, while trained human coders handle the ambiguous, complex, or high-dollar claims that require judgment, and increasingly, humans are also needed to audit and correct the AI’s own output. Coders who can validate machine-generated codes, resolve unclear documentation, and defend coding decisions to auditors and payers are, if anything, becoming more valuable, not less.

This is the wager embedded in Carlyle’s IPO plan: that for the foreseeable future, American healthcare billing will need scaled human workforces working alongside AI tools rather than being replaced by them, and that a company combining both, cheap, certified, English-speaking coding talent in India and the Philippines, plus proprietary AI software layered on top, deserves a premium valuation on the public market.

What could go wrong
It’s not a risk-free bet. If AI coding accuracy improves faster than expected, the economics of large offshore coding teams could erode quickly, denting the very growth story Carlyle is trying to sell to IPO investors. Competing RCM platforms, many of them also India-heavy and also racing to bolt on AI, could compress margins through price competition. And any US regulatory or political backlash against offshoring sensitive patient billing data could complicate the picture further.

For now, though, the thousands of BSc, BPT, and BAMS graduates who found in medical coding a career their home job market didn’t otherwise offer them are, in effect, part of the asset being taken public. Carlyle is betting that Wall Street, or in this case, Dalal Street, will agree that they’re worth $400 million.
MB Bureau