healthaxis

The healthcare industry faces a constant challenge: balancing rising costs with the imperative to deliver high-quality care. Prior authorization has become a crucial tool for payers, helping to ensure medical necessity and control spending. However, the current process is often bogged down by administrative complexities, creating a burden for both providers and patients.

Member retention is paramount in a competitive healthcare landscape. A classic Harvard Business Review study revealed that a mere 5% increase in customer retention can boost profits by 25% to 95%. This statistic underscores the critical role satisfied members play in the financial stability and success of healthcare payers and third-party administrators (TPAs).

In Part One of this series, we examined the initiatives Gartner identified as key areas for acceleration,¹ following their extensive evaluation through research surveys and interactions with U.S. healthcare payer business and technology executives.

U.S. healthcare payers and third-party administrators (TPAs) face a complex array of business and technology initiatives driven by evolving market conditions and increasing consumer demands. Successfully navigating this dynamic landscape requires a clear understanding of how to manage these challenges effectively.

In the age of big data, healthcare payers and third-party administrators (TPAs) are overwhelmed by vast amounts of information, underscoring the importance of data quality. A robust data quality strategy is essential, as it guarantees the accuracy and relevance of the collected data, thereby informing decision-making and strategic planning processes. This approach not only enhances operational efficiency but also supports the delivery of high-quality member care.

In January 2024, the Center for Medicare and Medicaid Services (CMS) issued the Interoperability and Prior Authorization Final Rule CMS-0057-F, heralding a transformative phase for U.S. healthcare payers effective January 1, 2026. This pivotal rule revises the landscape of prior authorization (PA) processes, especially for Medicare Advantage (MA), Medicaid, Children’s Health Insurance Program (CHIP), and Marketplace plans, signifying a major operational shift for healthcare payers.

In today’s competitive healthcare landscape, member retention is paramount for all health plan types. Retaining existing members is significantly more cost-effective than acquiring new ones. However, achieving high retention rates requires a delicate balancing act between member satisfaction, operational efficiency, and cost control.

In an era of paramount digital transformation, the Trusted Exchange Framework and Common Agreement (TEFCA) emerges as a pivotal beacon for healthcare payers. Established by the 21st Century Cures Act, TEFCA aims to create a standardized methodology for health information exchange across disparate networks.

The healthcare landscape is constantly evolving, and the Centers for Medicare & Medicaid Services (CMS) Interoperability and Prior Authorization Final Rule (CMS-0057-F) introduces significant changes, particularly in streamlining prior authorization (PA) processes for medical services. This rule primarily impacts Medicare, Medicaid, and certain health insurance issuers under the Affordable Care Act, and commercial health plans are excluded from these mandates.

In an era where technological advancement shapes the landscape of industries, healthcare remains at the forefront of significant transformation. The findings from the 2024 Gartner CIO and Technology Executive Survey provide a clear directive for healthcare payers: invest in technology to enhance operational efficiency, improve stakeholder experiences, and ensure sustainability in an ever-evolving market.