Four Ways Interoperability Empowers Health Plans

Updated on August 16, 2022

By Chris Ingersoll, Principal Architect, Innovaccer

Interoperability isn’t just a healthcare IT buzzword—for payers, it’s the only path to improved provider collaboration and improved member experiences. It’s 2022—you can order almost anything on Amazon, buy a car and have it delivered to you, and visit your doctor virtually on your smartphone. Why can’t you find out if a medical procedure is covered and how much your health plan will pay the same way? Payers are behind in terms of interoperability and the question is, what’s the risk?

The risk is dissatisfied members and providers as well as higher costs due to antiquated manual processes. Imagine a world where health plans are able to seamlessly interoperate with their provider networks across all stages of the member journey as well as with members digitally for a completely virtual experience?  Members shouldn’t need to guess what a statement means or send their health plan more information. It shouldn’t be hard to imagine—the experience both providers and members want today is achievable. 

When we talk about interoperability, what types of data from what types of systems are material?  Where this gets interesting, but also complicated for payers and providers, is that data sharing has traditionally been limited by business model considerations and trust issues—not just the technology. It could be argued that the technology is the easy part, but aligning the data and business issues is where the gaps, traps, and bumps on the road have been holding payers back.

1. Interoperability empowers health plans to focus on members

Meaningful interoperability goes beyond allowing independent systems to communicate with each other, it should add actionable insights to a member’s healthcare journey. The CMS and the ONC laid the groundwork for the exchange of data between providers and payers. But the  mandate for the use of Fast Healthcare Interoperability Resources (FHIR) is not the end game, it’s only one piece of the puzzle. 

Interoperability should be more than a government mandate. We understand the challenges large health plans have changing processes to work cohesively, but the FHIR mandate is the kickstart, not the end goal. It should be a strategic imperative for health plans to remove barriers that can improve member satisfaction, enable value-based care, improve the provider-payer relationship, lower costs, and enhance the members’ health.

The growth of consumerism in healthcare has changed patients’ and members’ expectations. We saw how the pandemic had a transformative effect on providers who quickly adapted to engage with patients virtually and digitally. Health plans are still using manual methods for pre-authorizations, leaving members frustrated with the time it takes for time-consuming processes that ultimately delay care.

Why is interoperability important from the member perspective and how can payers leverage it to improve the member experience? Let’s look at common health plan/member pain points:

  • Manual and time-consuming processes delaying care, resolving bills, and eligibility
  • Lack of transparency in coverage and cost
  • Lack of engagement between payers and members 
  • Poor brand image—health plans are perceived as a necessary evil

With real-time access to member data, payers can automate historically manual and time-consuming processes. In addition to increasing Stars Ratings scores and Healthcare Effectiveness Data and Information Sets (HEDIS®1) measures—which CMS will place higher value on starting in 2023—with the ability to view the same data providers have, the time spent on key revenue cycle management, such as claims adjudication and reimbursements, can also be improved.  It’s no secret that a better member experience leads to better clinical decision making which ultimately leads to better outcomes for a health plan. 

2. Digital first is now a reality 

The pandemic accelerated the need for a digital front door strategy to engage members across touchpoints throughout the care journey and to unify it with payers and providers. But the digital experience isn’t the same across the care continuum. The technologies providers implemented as a result of the pandemic—such as the availability of telehealth—have quickly outpaced that of payers. 

Moreover, we know that payers lack the personal connection and engagement with their members that patients have with their providers.  While health plans are working on making these connections, the breakdown between payers and members is now at a point where a health plan cannot adequately influence or provide guidance for a member’s healthcare journey.  Without the ability to access data, members don’t look to their health plans for advice when it comes to seeking care.

But, payers who have leveraged data with a digital first strategy have been able to reorient the member expectation. With incentives like virtual care coverage to avoid urgent care visits, easy-to-use apps and member portals that connect to a care team in real-time, they’ve broken down trust issues with transparency and engagement, ultimately leading to better outcomes and a perception of value to their members. 

The CMS has been working to improve digital quality measures, through Meaningful Measures 2.0,  with an emphasis on health information captured and transmitted electronically via interoperable systems. CMS continues to improve its digital strategy by using FHIR-based standards to exchange clinical information through APIs; working across CMS using AI to identify quality problems; developing APIs for quality measure data submission and interoperability; and accelerating the transition to fully electronic measures.

HEDIS® measures continue to become increasingly important for health plans and consumers and the National Committee for Quality Assurance (NCQA) has the goal of making all HEDIS®  digital quality measures (dQMs) digital within five years. These include: easier transfer of human-readable, narrative descriptions of HEDIS® measures into health systems’ IT systems; less interpretation, recoding and human error; and harmonization with industry standards, all of which cannot be achieved without interoperability. According to the NCQA, their “dQMs are closely aligned with interoperability and data exchange standards so the measures are much easier to deploy, enabling knowledge to be readily shared across the entire continuum of care.”

As healthcare continues to transform digitally, it’s clear that interoperability is a strategic imperative for health plans not only to improve the member experience and quality care, but to also meet the rapidly changing requirements and standards within the industry.

3. Enable value-based care 

The value of interoperability reaches beyond member experience and also bridges the provider-payer gap. As healthcare moves from fee-for-service to a value-based care (VBC) model, interoperability is a key component—a shared incentive between payers and providers. But how can providers and payers overcome some of the barriers in data sharing?

Interoperability from the perspective of a free flow of relevant, private, and secure information creates the foundation to expand capabilities to measure value, improve care quality, and drive cost efficiency. It allows payers to be more proactive and prescriptive in enumerating the description of value, and also in being able to get the provider community on board in how they expect value to be delivered and measured. Sharing member data with providers—data from claims, employers, labs, and patient-generated sources—provides a complete view of the patient, which leads to more accurate diagnoses and better treatment decisions. 

Through a health data platform, both health plans and providers can have access to the same data, reports, and recommendations, which builds a foundation for greater collaboration. Collaborators can view a unified member record, use the data to extract insights for meaningful action, align incentives, and enjoy shared savings. Care models are changing to make way for data.

Further, using clean, and normalized data, health plans, providers, and collaborators can align incentives and reap the benefits of shared savings. Moving to a health cloud gives payers the data platform that they need to gain a view of individual members and entire populations. This helps reduce the cost of care while improving care quality and patient and provider experiences, all of which are cornerstones of value-based care.

4. Improve the provider-payer relationship

The inefficiencies in data exchange between payers and providers are time consuming and costly. This is where we see that interoperability isn’t purely a technology issue—it’s also a business model issue. Providers need to obtain patient data to drive their business, but that same data is not always what payers receive.

A recent Morning Consult survey of provider healthcare executives revealed that 97% are pushing for more interoperability, and nearly half say data within their organizations is highly fragmented. While these numbers don’t reflect the number on the payer side, if we put a mirror up to the payer audience, few would disagree that it’s a critical priority across all of healthcare IT.

Providers and payers face many of the same challenges—risk stratification, network management, virtual health management, referral management, and engagement to name a few. While each presents differently for both sides, the goals remain the same—improved clinical, financial, and experiential outcomes. Through shared data and transparent collaboration, interoperability can improve the provider-payer relationship.

Implementing a unified data platform that provides a 360-degree view of member health and other data can be the key to overcoming the data gap between payers and providers. By working together and sharing information, payers and providers can successfully navigate the challenges of care coordination and value-based care to the benefit of everyone.

Data readiness is the key to achieving meaningful interoperability

The baseline for interoperabilityseen in healthcare today is point-to-point document exchange. The challenge, however, is making this data useful for the recipient. This includes interpretation of the semantics of the data, assessment of its quality, and organizing and aggregating data from multiple distinct silos (i.e., EHRs, claims, consumer sources, labs, etc.). This effort of addressing data readiness is the critical step to achieving meaningful interoperability.

Data readiness drives a foundation for consumer engagement initiatives, as it also provides a deeper dive with clinical analytics, and performance and operational analytics, for the entire organization—much more than simply giving members access to a member record. 

By laying the foundation for a seamless exchange of healthcare data and analytics-backed actionable insights among payers, providers, and members through clean data, payers can retrieve clinical data to drive cost and quality outcomes for members.

Data readiness is more than just the exchange of data: it is making data usable and connected to the applications and human experiences of health care. Data must be ingested, cleaned, and standardized from all healthcare data sources, including clinical, claims, labs, and others to integrate into a unified data model. This is done through the following steps:

  • Aggregation provides a clean and curated version of the data, merging multiple sources of information onto a clean and curated “golden” record. This is achieved with sophisticated patient demographic matching, reference coding logic, and rigorous data quality checks. Aggregation establishes a single source of truth across multiple sources. 
  • Hydration ismaking the aggregated data liquid and populating the existing technologies such as population health tools, CRM, and member mobile applications that drive value.
  • Activation is the ability to build insights from aggregated data—such as risk profiles, gaps in care, attribution—and build applications that surface it in workflows, so it’s available to the right provider at the right point in time, allowing health plans to close care gaps and minimize costs.
  • Harmonization is the synchronization dynamically between independent workflows.  For example, being able to discover insights such as gaps in care right in workflow, and actually identify and close gaps within the EHR directly, leads to better provider-payer collaboration and data sharing and lowers physician burnout—the ultimate integrated and intuitive workflow.

Through semantic normalization and data activation, data can be interpreted into a single data model and activated for different uses for payers to collaborate with providers and improve the member experience. 


Payers face unique and evolving challenges with interoperability beyond meeting government regulations. To improve care, better collaborate with providers, increase member satisfaction and financial outcomes, solving the tactical needs of interoperability today through a solid data readiness strategy empowers payers with a foundation for long-term success. 

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.