Healthcare regulations in the US, aimed at improving quality care, patient safety, and data privacy, have increased the cost, administrative, and audit burden on providers. Compliance is an increasingly complex subject, sometimes with regulations differing even between states, that existing systems and processes cannot tackle seamlessly and efficiently.
In the 2023 Medical Group Management Association’s Annual Regulatory Burden Survey, as many as 90% of respondents reported that the regulatory burden on their medical practice in the past 12 months had increased, and 97% felt a reduced burden would allow them to reallocate resources toward patient care.
One area of significant regulatory activity is patient information sharing, with the mandate on electronic Health Information Exchange (HIE) and interoperability continuing to shape rules and standards around it. For instance, the recently published Trusted Exchange Framework and Common Agreement (TEFCA) establishes a “set of non-binding but foundational principles” for information sharing among healthcare organizations. All these regulations and standards fall under the umbrella legislation, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which sets the standard for sensitive patient data protection.
Healthcare industry challenges – Impact of Regulations and Manual Processes
Addressing compliance comes at a time when the healthcare industry is confronted with rising inflation, higher wages, aging technologies, and narrowing profit margins. Organizations across the ecosystem are looking to adopt new strategies that mitigate these challenges and ease the burden on their already stretched operations.
Healthcare costs in the US continue to spiral upward, putting enormous financial stress on patients and the government. In many cases, the high cost of healthcare makes it difficult for employers to provide comprehensive health insurance to their employees, resulting in many Americans being uninsured or underinsured.
The Affordable Care Act of 2010 aims to address these issues by making health coverage affordable to more people. Another goal of this Act is to support innovative medical care delivery methods to lower healthcare costs. The other primary legislation that aims at healthcare equity is the Emergency Medical Treatment & Labor Act (EMTALA 1986), which prohibits providers from refusing treatment to a patient in an emergency even if the patient cannot pay.
In a survey by HealthEdge, 46% of health plan leaders cited “managing cost” as the top challenge, followed by “driving operational efficiency” stated by 41% of the respondents. The leaders believed two ways to reduce costs are increasing interoperability and improving claims accuracy.
Healthcare digitization that makes virtual visits, remote monitoring, and telehealth reimbursement approvals possible also leads to lower costs for payers and patients.
While hospitals and health systems are committed to ensuring timely patient access to healthcare services, fragmented data and manual processes across the healthcare landscape are significant barriers.
One of the most critical challenges that impacts patient treatment is Prior Authorization (PA). In a manual system, a payer may delay authorization because of a lack of the required information from the patient or because of a misinterpretation of the circumstances. In such scenarios, patient care is affected. But there is legislation coming up to prevent such delays.
PA is being implemented by building on the 2020 CMS Interoperability and Patient Access Rule using the DA Vinci administrative use cases that will proactively ask for information from the provider on behalf of the patient to provide instant PA. Another upcoming rule is the Burden Reduction rule on January 1, 2026, when impacted payers must respond to patients through a patient access API within one business day of receiving an authorization request for items and services. The payer may approve or deny the request along with a justification for the denial. Payers must implement this functionality by December 2024, which again calls for interoperability to ensure compliance.
The HITECH Act enacted in 2009 aims to incentivize the use of Electronic Health Records (EHR) and support secure technology by the healthcare industry. Payers are realizing that they can save billions by automating this process. For instance, Gartner reports that in 2026, 60% of PAs are expected to be processed electronically, up from 26% in 2021, saving $2 billion in administrative costs and more lives.
The costs associated with treatment are not fully disclosed to consumers. An upcoming legislation will change this practice.
Apart from the PA requirement, the Burden Reduction Rule requires the payer to be transparent about the cost of services and treatments to help patients make informed decisions about the overall costs. This can benefit patients with a high deductible or no insurance.
Insurers are also following the No Surprise Act’s Independent Resolution Process to observe how legislators are finalizing rules to penalize payers who do not comply with the law’s price transparency requirement.
These legislations indicate the need for automation and interoperability to ensure seamless data flow among payers and providers.
Investors and healthcare leaders expect a lot of focus on digital health and interoperability to handle the challenges impacting the US healthcare system. This focus will enable new ways to achieve more, quickly and with less investment. At the same time, modernizing healthcare through automation requires a coordinated effort by all parties, including the government.
As a step in this direction, the 21st Century Cures Act (2016) aims to speed up turnaround time for new treatments, improve patient outcomes by modernizing healthcare information technology and support the development of interoperable systems that enable the secure exchange of healthcare data. It mandates the adoption of certified APIs and complying with the Health Level Seven (HL7) Fast Healthcare Interoperability Resources (FHIR®) standard to improve data exchange in line with healthcare regulations. FHIR is central to the success of the US digital health initiative, becoming an optional part of Electronic Health Information (EHI) in 2023 and a mandatory part in 2024. Read more about it in this white paper.
Following this standard is especially important considering that apart from healthcare legislation across the US, certain states have enacted laws, such as California (CCPA), New York (SHIELD), and Massachusetts (201 CMR 17.00). Through these Acts, patients are provided access to their information while holding organizations responsible for data security.
Technology best practices for HIE to ensure EHR interoperability include the implementation of APIs with secure messaging protocols to protect the transmission of patient information, cloud-based EHRs to store and retrieve data, and blockchain for network provider information, among others.
A case study published by the National Coordinator for Health Information Technology shows how the Reliant Medical Group, with more than 260 physicians offering primary care and services in over 30 specialties, brought about a reduction in costs and improved patient care through groundbreaking data analysis and realistic optimization of practice workflows. Reliant developed an HIE on the Massachusetts Health Information Highway infrastructure, speeding up information sharing between EHR systems. It led to efficient workflows, cost reductions by minimizing outside referrals, and better patient care by providers.
Interoperability kit for Healthcare Information Exchange
The fast-evolving regulatory environment necessitates the value of modernizing healthcare through automation using HL7 FHIR-certified APIs to achieve cost reductions, compliance with stringent laws, and, ultimately, patient care transparency. At Torry Harris, we possess a deep understanding of the healthcare imperative. We have extensive experience championing modernization initiatives for healthcare organizations globally, helping them extract maximum value from information exchange and interoperability. We facilitate the modernization of the healthcare industry through IT services and a digital marketplace product to connect to the healthcare ecosystem and expand the service portfolios of healthcare enterprises. By leveraging proprietary frameworks and toolkits, we provide end-to-end API consulting, advisory on API strategy, and streamline API implementation using a cost-effective offshore factory model to accelerate the adoption of FHIR compliance for healthcare providers.