A First Look at CMS Payer Interoperability - Cover

A First Look at CMS Payer Interoperability

In May 2020, CMS announced a new mandate requiring certain health plans to comply with standards related to securely exchanging patient data—including using FHIR APIs and being able to provide lists of provider directories. As of July 2021, CMS began enforcing these requirements for payer organizations. However, meeting these requirements has been a challenge for payers due to the fact that they historically have not had the knowledge or resources needed to build FHIR repositories. Many have scrambled to acquire technology that will help them in this effort.

The new CMS Payer Interoperability market has developed amid this need for technology, featuring both established players within payer markets as well as emerging vendors specifically focused on FHIR. To help payers with their buying decisions, KLAS released a vendor guide earlier in the summer summarizing the available technology options for payers who need to meet CMS’ mandate. More recently, KLAS published a follow-up report providing an early look at purchasing decisions and vendor performances within this new market.

Emerging Patterns in Purchasing Decisions and Performance

Payers’ main desired outcome from these interoperability solutions is to meet the CMS mandate, and they are looking to vendors to provide the FHIR expertise that they lack. As CMS only began enforcing the interoperability mandate last year, there is no trending data for payers’ purchasing decisions within this market, but KLAS’ report highlights some early patterns. Newer FHIR-specific vendors, such as 1upHealth and Smile CDR, tend to see more purchasing traction in the market. While seasoned players like Cognizant and Change Healthcare are being considered, they are less often chosen. It remains to be seen how these vendors will perform long term.

Due to the market’s newness, there is not yet much to report about vendors’ performances. Among vendors who are fully rated according to KLAS’ standards, performance scores are similar across the board. KLAS will continue to gather and report on performance data in this segment.

Early Implementation Difficulties and Use Cases

Regardless of which vendor payers choose, many respondents report experiences with implementation issues, specifically regarding data mapping. Payers who tackle data mapping on their own often struggle, as they don’t have the knowledge or resources to transform their existing data into the required format. Some vendors do offer services to help payer customers with the data mapping process; however, not all payers can take advantage of those services because local regulations prevent them from giving data to outside entities. Although this is not the vendors’ fault, the situation contributes to the implementation difficulties many payers are experiencing.

Despite these difficulties, payer organizations have been able to successfully adopt their interoperability solutions for certain use cases. The most commonly adopted use case is the patient access API; customers of all vendors included in this report either report high adoption of this API or have been validated as using it. Other common use cases include provider directories, payer-to-payer data exchange, and member-facing apps.

Future Considerations in CMS Payer Interoperability Purchases

The CMS Payer Interoperability market is still maturing, but how the market changes will depend both on vendors’ strategies (which vary in focus from CMS regulations, interoperability, and population health) and payer organizations’ needs (such as whether to utilize real-time data exchange). Some vendors are already proposing various use cases to their customers, and expanding outside of payer into the providers’ or HIE markets for interoperability. Ultimately, the market will need a variety of vendor players who can meet different needs. For example, KLAS’ report found that provider-sponsored health plans tend to consider and often select vendors like InterSystems and Epic that can support both payer and clinical data. Additionally, other CMS mandates are expected to go into effect in the future, which may further alter the needs of payer organizations. KLAS will continue to monitor how this market evolves.

Another consideration that may become more important in purchasing decisions is cost. Currently, payers only use their CMS-mandated solutions when members request healthcare data, but not many are requesting this information, so there is not much need from patients to use the solutions. If product utilization continues to be low and no more use cases are being adopted, payers will likely become more cost conscious about the interoperability solutions they choose, or limit the expansion of certain products. The cost of an interoperability solution is already higher than some payers would like, so conversations around product value may continue to become more relevant.


KLAS is still very new to payer market segments, and we will continue to grow our efforts in researching them. In addition to monitoring already-measured markets like CMS Payer Interoperability, KLAS will seek to research new markets and share insights that benefit health plans, provider organizations, and—ultimately—patients.

For deeper insights into the purchasing decisions and early vendor performance data within the CMS Payer Interoperability market, we encourage readers to check out the full report.

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