Today’s payers are increasingly invested in improving their collaboration with providers. While government regulations around healthcare data exchange certainly play a role, this partnership is about more than simply checking regulatory boxes. Improving collaboration between payers and providers creates trust among stakeholders, enhancing efficiency, improving member outcomes, and achieving a more holistic view of members that improves services and reduces costs.

92% of providers want more effective collaboration with payers.^*

We are better positioned than ever to realize what once seemed like an unattainable goal in healthcare: meaningful collaboration between payers and providers. So what does it mean to foster effective payer-provider collaboration? Effectively exchanging healthcare data is an end goal, but building trust and partnership is a process. True collaboration involves more than sharing data: it entails working as a team to address barriers and implement best practices. This article helps payers understand and approach payer-provider collaboration while avoiding common pitfalls.

The Evolution of Interoperability

Interoperability is not a new term, so why are we still talking about it? And why has it been so difficult to achieve? A primary challenge payers face is leveraging their own internal data, which is often compartmentalized across systems with varying levels of connectivity. In addition to internal data, payers work with an entire network of provider partners that house important clinical data in a variety of EHRs. Receiving clinical data from provider partners can be challenging, but ingesting and operationalizing the data across their disparate systems presents an even bigger challenge because these systems were not designed with clinical data structure in mind. Until recently, a lack of regulation over standards to normalize data for easier exchange made data difficult to combine.  

Healthcare generates nearly one-third of the world's data.^*

Payers and providers have traditionally had siloed, transactional relationships based on a fee-for-service model, with providers reimbursed by payers for each service provided, regardless of the outcome. Although straightforward, this model often leads to fragmented care and escalating healthcare costs. Emerging interoperability requirements and evolving payment models require a more collaborative approach to healthcare data, emphasizing quality, outcomes, and cost-effectiveness. Payment models like value-based care are intended to incentivize providers to improve quality and efficiency. Achieving value-based care requires payers and providers to work cohesively, aligning incentives and sharing responsibilities.  

Although more than half of healthcare organizations have implemented some form of value-based care as of 2024, many struggle to make progress. Approximately 50% of these organizations report lacking the necessary protocols to confidently assess new opportunities. For healthcare to continue its shift toward more efficient, outcome-driven payment models, payers must continue to support providers with advancements in data transparency, collaboration, and equitable rewards.   

50% of practices participating in some form of value-based care lack the right protocols to confidently assess new opportunities.^*

As healthcare organizations develop more tools and systems to manage ever-growing data, sharing data between systems and organizations becomes more complex. Interoperability breaks through data siloes to promote the exchange of healthcare data between all parties involved in a person’s care. Payers that can digest, normalize, and manage the data obtained through interoperability unlock an opportunity to incorporate valuable insights into core operations. This enables payers to leverage data to improve care management, provide more efficient approvals and authorizations, and reduce waste. Improving interoperability and collaboration is so vital to the future of care that Centers for Medicaid & Medicare Services (CMS) now requires payers to meet interoperability requirements. 

Key Challenges Faced by Payer Organizations  

Improving interoperability could reduce healthcare costs by $30 billion. For example, interoperability can cut costs by reducing administrative burden, redundant tests and procedures, and by minimizing medication and other clinical errors. The real-time exchange of member data also streamlines workflows and clinical care for better outcomes and more engaged members. However, the expression “no pain, no gain” comes to mind, as healthcare data transparency has proven to be elusive. Payers and providers have traditionally stood on opposite sides of the fence, but true partnership is essential for meaningful collaboration.  

Payers rely on providers to do a lot of the work necessary for the payer to be successful. They need providers to deliver care and complete certain documentation for things like payment, regulatory reporting, and others. It’s so important for a payer to really partner and collaborate with a provider to ensure they get these things done in the least abrasive way possible.

STEPHANIE NGOManaging Director, Payer and Provider Integration Solutions

Other challenges include: 

Integrating and Securing Diverse Data Sources 

Differences in data formats, standards, and security protocols across diverse data sources pose substantial challenges for payer organizations, particularly for clinical data exchange. This requires robust data integration platforms, interoperable systems, and heightened security measures to ensure data accuracy, consistency, and confidentiality. Navigating regulatory requirements adds additional complexity to this process. In fact, upcoming interoperability regulations require payer action to more effectively share and utilize data among other payers, providers, and members.   

Sharing Useful, Actionable Data 

Payers and providers may share the same industry, but each has its own systems which complicate healthcare data exchange. Many organizations lack the expertise or resources to normalize data for effective data exchange. Cybersecurity remains a large concern, especially with the need for individual connections between each system to share clinical data. However, it is necessary to normalize data for effective data exchange so actionable data can be shared between organizations. 

Often, the biggest challenge payers face is getting data into a usable format and making it available to business units to impact change. We recommend starting small by identifying one provider and determining how to impact things like member onboarding, risk adjustment, and quality.

PHIL HEFFLEYManaging Director, Analytics + Insights

Meeting Utilization Management Requests 

High volumes and a wide range of delivery methods for utilization management (UM) requests, varying clinical guidelines, and complex administrative processes are key payer challenges. The recent Prior Authorization and Interoperability Rule is intended to address these problems by improving health information exchange and standardizing request protocol for greater transparency and speedier response times.  

Ensuring Aligned Incentives and Goals  

Payers encounter several challenges when attempting to align incentives and goals, including:  

• Misaligned financial incentives linked to traditional fee-for-service models that focus more on volume rather than outcomes. 

• Disparate data sources make it challenging to track member outcomes and provider performance. 

• Existing fee-for-service reimbursement models, along with risk associated with value-based care and concerns about its smaller footprint, can discourage providers. 

• Promoting effective communication strategies and incentives to foster education and engagement among members. 

Maintaining Regulatory Compliance  

Ensuring data privacy and security is paramount in healthcare, making regulations particularly complex. These include HIPAA, the CMS interoperability and Patient Access Final Rule, and the ONC Cures Act Final Rule, which mandate standards for clinical data exchange, patient access to health information, and interoperability. Regulation requirements largely fall on payers, and failure to comply can result in fines, legal repercussions, and damage reputations.  

Developing Value-Based Contracts 

Many providers are not yet ready to commit to value-based care because of a low adoption rate and lack of risk-based contracts. How can payers come up with better reimbursement strategies? For starters, they need better contract terms and physician incentives from the health system that encourage providers to engage in risk-based contracts. It’s also essential that providers are involved in the process. Collaborative discussions and educational resources to help providers understand new reimbursement models go a long way towards buy-in. 

Creating Wins for Payer Clients

Trends in Payer-Provider Collaboration 

A few key trends in payer-provider collaboration have taken shape in recent years. Most notable are:  

• CMS rules promoting sharing and collaboration are driving clinical data sharing between payers and providers. This leads to a more holistic view of the member and can help reduce administrative burden. 

• Value-based care metrics such as patient satisfaction, preventative care measures, hospital readmission rates, and total cost of care are used to evaluate performance. This fosters trust by allowing providers and payers to identify areas for improvement and work collaboratively to enhance care delivery and achieve shared goals.  

• A shift toward healthcare consumerism in which members expect faster, more transparent service from their healthcare providers and payers. Improving collaboration eases the member’s healthcare journey by expanding access to their own healthcare information and improving payer response times. This shift towards consumerism has driven more payers to enter the healthcare service space. Many have acquired or partnered with healthcare providers, including hospitals, clinics, physician groups and IDNs. Additionally, payers are increasingly investing in telehealth and other digital health solutions to provide more convenient, accessible care option for their members. 

• The increasing visibility of payviders, healthcare organizations that that both pay for and deliver healthcare services.  This integrated model allows for greater coordination of care and financial alignment. An example is a payer becoming a healthcare provider that also offers insurance, such as Humana in 2019. Alternatively, healthcare providers can create their own insurance plans, or payers and providers form a joint venture.