Evolving with 2023 Healthcare Payer Technology Trends

Jan 19, 2023

What is on the horizon for healthcare payer technology in 2023? Reviewing the industry’s top trending drivers, restraints, challenges and opportunities so health plans can innovate while minimizing risk.

Inflation. Interest rates. Healthcare affordability. Worker burnout. Growth projections. Last year brought a new set of curveballs for those of us looking forward to some sense of normalcy. But those organizations that kept pace with healthcare payer technology trends and kept focus on mission and long-term strategy continued to weather the uncertainty and even thrive. In fact, 2022 made another strong case for health plans succeeding with technology.

If your health plan is like many others, you may have increased the intensity of your strategic planning efforts to ensure your organization can remain agile in the face of uncertainty. How can you scale back in areas that don’t support strategic growth initiatives while, at the same time, balancing smart investments that drive growth? To that end, let’s explore the industry drivers, restraints, challenges and opportunities impacting these strategies as we take the long view of 2023.

Drivers: Top Motivators for Health Plans in 2023

For three years, the novel coronavirus pandemic dominated healthcare headlines and responses. For good reason. It stands to have an outsized impact on the industry for years to come. And even as the public health emergency is extended for perhaps the last time as we shift to long-term endemic approaches, the need for innovative solutions continues to accelerate.

Because COVID-19 so efficiently highlighted known gaps in the healthcare system – including how far behind many stakeholders are digitally – it serves as the tipping point of the primary drivers for healthcare payer technology. Health plans must take care of these imminently or risk falling even further behind.

Calls for increased transparency

In the past, we predicted that “health organizations will need to make real upgrades in technology if they haven’t already, or face issues meeting government regulations.” Rules and laws, proposed and enacted, have brought this prediction to the forefront. How are they playing out?

First, the rules against information blocking emphasize the need for greater healthcare data interoperability. CMS remains committed to this initiative and published several updates as health plans continue to push for increased data sharing. Improvements in care quality and decision-making and progress on value-based care programs should result.

Second, in the face of providers making very little data available, CMS ramped up enforcement of the price transparency rule. Insurers responded in 2022 by releasing an overwhelming volume of data. And the number of items, medications, procedures and services that must be clearly listed with prices continues to expand in the name of patient safety and quality care. A “shoppable” experience for consumers should follow this year with the release of patient-facing information.

Third, the No Surprises Act, passed in 2021, took effect one year ago. It is aimed at mitigating the effects of surprise medical bills consumers receive when they inadvertently receive care from out-of-network providers. In a five-month period last year, the payer-provider dispute resolution portal was inundated with requests for third-party intervention — largely from ER claims. Indicating work to be done in this area. In fact, revisions by CMS are already underway.

Finally, in December, CMS issued a proposed rule intended to streamline prior authorization requests. It applies to Medicare Advantage organizations, Medicaid and CHIP agencies, Medicaid and CHIP MCOs, and plans on the federal exchanges. Estimates peg its savings at more than $15 billion over a decade. It lays out data exchange standards, expands health data access parameters, and shortens response timeframes. Its comment phase ends early this year, but historically these rules that have broad support have been adopted without significant changes.

The ultimate goal of technology is to break down barriers and allow information to empower a better healthcare system. Health plans have realized advanced technology is only as good as the data that fuels it. With interoperability, data accessibility and transparency as a focus, health plans will naturally evolve to start questioning any process within their organization that inhibits information sharing.

“We’re reaching an inflection point — and if traditional payers want to stay competitive, now’s the time to act. 93% of payers who have made digital investments noted significant membership increases, with 73% indicating a decrease in membership turnover. These investments also boost member engagement and retention, increase employee satisfaction, reduce costs, and deliver better health outcomes.” West Monroe


Tight labor market

Improving data accessibility extends to internal operations at payers as well. The modern work environment is here to stay. The technology that supports it must follow. Health plans have adapted to the “do more with less” credo that pervades most industries, but manual and labor-intensive processes only contribute to the administrative burden.

This gap proves even more costly in a tight labor market where skilled workers demand more seamless workflows and greater overall job satisfaction. In fact, according to the annual PwC CEO survey, 52% of CEOs think that labor/skills shortages will impact their profitability to a large extent over the next 10 years — a top 3 issue.

By adopting integrative technology platforms, health plans can eliminate data silos and improve collaboration and oversight. As payers start to experience the big picture benefits of advanced technology, organizations will be able to work towards becoming more proactive and less reactive.

Changes in membership mix

Long- and short-term shifts in health plans’ lines of business will continue as the “silver tsunami” hits its nadir and the public health emergency ends. This era brought an influx of members into traditional Medicare, Medicare Advantage and Medicaid — now at 156M beneficiaries — and record enrollment in ACA plans. While commercial, employer-sponsored plans remain the norm, how consumers think about healthcare coverage has changed for good.

Members are tasked with owning their own healthcare experience. They expect the relationship with their health payer to be as frictionless and intuitive as their other daily transactions. Not meeting consumer demand will open payers up to disruption. But if health plans make technology decisions with their eye firmly on the member, they also will find numerous opportunities to improve payment accuracy.

Changing competitive landscape

Increasing consolidation among health systems and payers also is motivating health plans to innovate. They understand that relying on legacy technology and paper-intensive processes minimizes the ability to scale. Health plans are taking steps now to upgrade their position.

And not a moment too soon. The long-predicted disruption to healthcare has arrived as top retailers have become major players in the industry. In an increasingly consumer-driven environment, demonstrating value to members and employers is key. Payers with a tech-first mindset – and the ecosystem to match – will have the strategic advantage in these situations.

At the same time, health plans will see more technology vendors looking to leverage experience with other industries into similar successes in the healthcare sector. Technology can help rapidly improve ROI on the claims overpayment prevention and recovery process. But health plans will need to shrewdly evaluate these solutions to ensure a good fit.

Restraints: Navigating the Roadblocks Health Plans Face

Health plans have long known the advantages of advanced healthcare payer technology. But the usual suspects continue to block progress. Slim margins, data security concerns and outsourcing costs could prevent health plans from making headway on their goals this year.

Uncertain medical loss ratios

The uncertainty around the economic situation and how healthcare costs will affect medical loss ratios has some health plans putting strategic technology investments on hold. Profits and operating margins at insurers go up and down, quarter by quarter, leading to conservative financial outlooks. Combined with the historic struggles to efficiently and effectively transition to digital processes, taking on new technology projects may feel too risky in the short-term. But the status quo may prove even more risky.

Health plans can overcome this perceived risk by seeking out solutions that surface quick wins and set them up for long-term advantages. Look for speed to value. Enterprise healthcare payer technology that emphasizes industry standards, streamlines data sources, builds empathy with stakeholders, improves efficiency and reduces team frustration will pay dividends.

Concerns about data security

Dealing with large amounts of patient data makes health plans a prime target for security breaches. And the entire industry trying to quickly integrate numerous data sources has the potential to create vulnerabilities in the system. As evidenced by the leap in ransomware attacks. But health plans moving too slowly with technology adoption can lead to irreparable harm as well.

Current manual approaches to PHI – locally stored data, desktop applications, paper faxes, etc. – are even more vulnerable than secure digital processes. Modern technology, on the other hand, can grant you more control. It allows you to be more granular when granting access to PHI, for one. It also creates a digital log of access.

Vet prospective solutions carefully as you move to secure your cyber environment quickly. For even greater peace of mind, seek out HIPAA-compliant technology vendors that pursue HITRUST CSF and SOC 2 certifications.

Unexpected costs of outsourcing

Consolidation abounds in the payment integrity services vendor industry as well. For some services, this trend means payers may have only one or two vendor choices available to them. Reduced innovation and rate negotiation capabilities may result. However, health plans already had identified internalization strategies as an area of opportunity to counter unpredictable costs associated with outsourcing. And technology advances make it more practical to conduct complex audits — including IBR, DRG, E/M reviews and more — internally without adding additional skilled staff or reducing effectiveness.

Whether or not your are positioned to fully internalize claims audit programs in the short-term, a strategic combination of insourcing and outsourcing activity based on health plan core competencies will optimize spend. A partner and technology that allows you the flexibility to decide – service by service – whether to outsource or insource based on your cost-benefit analysis will better poise your health plan to scale effectively.

Challenges: Factors for 2023

Internal restraints aren’t the only barrier to success with healthcare payer technology. What are the broader industry factors that could challenge health plans in 2023?

Provider turbulence

With workforce burnout, ongoing staffing issues, and precarious financial situations, the stress on providers has never been greater. Healthcare payer technology strategies will need to support this valuable group. Without a broad network of providers, health plans will find it difficult to advance on engaging members and lowering healthcare costs. Health plans that use technology to focus on this relationship can overcome this challenge. Consider solutions that ease providers’ claims payment administrative burden and support real-time communication.

Barriers to adoption of risk-based models

Those providers participating in alternative payment models navigate industry disruption better than their fee-for-service counterparts. They also are more likely to pursue population health improvements that stand to keep their patients healthier. In today’s environment of increased financial pressures and instances of costly chronic disease, that health systems are increasingly open to risk-based arrangements. But significant partnership, data integrity, reporting and technology barriers persist.

Health plans can support providers in this transition with healthcare payer technology that overcomes trust and abrasion issues. Increase data transparency so both sides of the relationship are working from the same playbook. Come to agreement on interpretations of value and quality. And measure everything: clinical quality, consumer experience, return on investment, and more. Then share those data insights and work together on continuous improvements and innovations.

“Payers and providers alike are feeling the pressure from an increasing prevalence of complex conditions. Financial pressures could drive higher adoption of value-based care in 2023. However, payers’ and providers’ definitions of value-based care will determine the industry’s progress.” Health Payer Intelligence

Changing political landscape

Last year’s political environment set its sights on healthcare at both the state and federal level. And this year promises to bring more of the same.

Just released was a proposed rule for 2024, which aims to streamline ACA plan selection, simplify marketplace enrollment, and increase access to care. And with fresh priorities at government healthcare agencies and new leadership on congressional committees, we can expect renewed focus on public health issues, telehealth flexibility, and the consumer cost burden, which most healthcare stakeholders should welcome. At the same time, there are signs CMS is zeroing in on overpayments.

Whether or not additional legislation will pass or market changes will be introduced is currently unknown. But agile, tech-forward health plans will be positioned to succeed no matter what happens on this front.

Opportunities: Chances to Excel with Healthcare Payer Technology

While challenges abound in an uncertain healthcare environment, so does opportunity. Changing member behavior, motivated employer clients, technology advancements and broader industry shifts offer health plans the chance to succeed with their digital transformation goals.

Members open to engagement

The past three years have opened up new and unexpected avenues for member engagement. People want to hear more from those responsible for their care. They have embraced home health and telehealth. And they have welcomed technology overall into their healthcare unlike ever before.

At the same time, the consumer healthcare cost burden is a top financial worry for individuals. And a concern to the broader economy as well with the total set to hit over $491 billion and maintain an annual growth rate of 10% per year for the next five years. How can health plans proactively maneuver through this dynamic?

Payers have caught on to the fact that providing improved member services is a differentiator in a consumer-driven market. In fact, consumers see their health plan as key to positive healthcare experiences. By offering convenience and addressing social determinants of health, plans can offer broader benefits with perceived higher values while lowering costs. CMS has made it easier for health plans to offer supplemental benefits, another incentive for offering them. With health plans expanding coverage in this area, digital health adoption will continue to grow.

“There are a lot of people competing for care delivery and convenience of care, and that’s going to benefit the patient. But folks are going to have to get the digital religion quickly to compete effectively for this consumerization of healthcare. The digital religion is the recognition at the board and C-suite level that they can no longer deliver care as per usual. They need to adopt greater technology, automation, tools and processes to engage their patients.” Fierce Healthcare


Employer clients embrace payment integrity

Though health plans have concerns about headwinds for commercial growth, a record number of employees are covered by self-funded plans — 65% in 2022. Moreover, it’s estimated that self-insured employer groups make up 70-80% of commercial health plan business. With employers across the board reporting elevated healthcare costs, and hesitating to pass on these increases to employees, payers have a significant opportunity to excel.

These customers are increasingly focused on savings opportunities, including payment accuracy programs. They also, thanks to provisions in the Consolidated Appropriations Act (CAA) that goes into effect this year, have more motivation than ever to demand greater insights to ensure their workers get the best coverage for the best price.

Payers that can provide greater visibility into payment integrity value are better positioned to offer uniquely competitive products and programs to this highly desirable client base.

Pursuit of industry-standard enterprise technology

Technology advancements continue, as API standards are enacted and artificial intelligence capabilities improve. Plans can leverage the mountains of data they collect through improved data analytics technology, reducing time to reports and empowering real-time decision making. And these advances have arrived just in time. Through secure integrations, data sharing could be a hurdle that health plans finally surpass.

Health plans will have to overcome learning curves, fear of change and other internal challenges as they select solutions and look for increased returns. The vast majority will look to outside vendors to cover these gaps. And with good reason. Despite payers’ unique differences, savvy organizations are increasingly pursuing industry-standard enterprise technology platforms. With predictable, subscription-based costs, configurable off-the-shelf solutions will prove more cost-effective than custom-built technology.

Strategic shift to payment accuracy

The desire to move most payment integrity operations to overpayment prevention can hardly be called a trend. It’s a perennial goal at most health plans, and one perceived as largely out of reach for average organizations. But there are signs that the balance is shifting to favor strategic payment accuracy.

Payment accuracy is about more than recovering overpayments. It’s a broader strategic relationship between payers and providers to ensure claims are paid accurately in the first place. And it starts with end-to-end payment integrity technology that puts all the data that powers the program in one place. With real-time KPIs at hand, the payers succeeding in this model are engaging key stakeholders, identifying prevention opportunities and realizing impressive ROI in the process.

These collaboration capabilities are available to all health plans if they utilize the right technology solutions. Empowering users to break down barriers within — and without — their organization will drive efficiencies and advancements along the payment integrity continuum.

Partner to Make 2023 the Best Year Yet

Health plans can stay ahead of the curve by making strategic investments in change, particularly surrounding transparency. Enterprise technology and shifts in payment accuracy strategies will allow payers to continue to gain ground and focus on proactive efforts, particularly when it comes to claims recovery and payment integrity.

Extending your competitive advantage transcends trends. Fortunately, a comprehensive technology platform like Pareo allows health plans to scale and improve processes, harness the power of A.I., increase medical savings, and accelerate ROI. Talk to ClarisHealth about how Pareo can keep you a step ahead of healthcare payer technology trends – no matter what the future brings.

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