Where are we now? – Part 1 of the Healthcare Interoperability blog series

  • July 12, 2023

The Center for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator (ONC) value interoperability. They want to get the same data into the hands of patients, providers and payers to present a complete and common understanding of patient health and treatments. To achieve this, CMS issued a series of rules that'll dramatically impact IT and Business Operations for Medicaid agencies and payer systems.

This first blog post in our healthcare interoperability series shows how these rules relate and highlights the significant additional IT processing and business operations that Medicaid agencies and covered health plans must support.

Key impacts of these rules include:

  • The system focus for interoperability processing moves from the back end to the front end. The regulation requires incorporating Fast Healthcare Interoperability Resources (FHIR) data in existing business processes and not simply in retrospective reporting.
  • Business operations must accept new data formats, work with new terminology and reduce authorization review processing time by half.
  • The Electronic Data Interchange (EDI) gateway becomes the key FHIR translation service for the state.
  • Health and Human Services (HHS) has written three new and proposed rules that impact interoperability for payer systems.


  • Requires patient access to their own claim, administrative and clinical (if maintained) data through specified Application Programming Interfaces (APIs) via smart phones or other devices.
  • Must include the U.S. Core Data for Interoperability (USCDI) clinical data if available.


  • Applies to all HIPAA entities.
  • Makes X12 275 6020 a mandatory HIPAA transaction for attachments.
  • Requires provider and payer support for HL7 Consolidated Clinical Document Architecture (C-CDA) Release 2 payloads in attachments.
  • Includes Logical Observation Identifiers, Names and Codes (LOINC) and Systemized Nomenclature of Medicine – Clinical Terms (SNOMED-CT) code sets.
  • Updates Prior Authorization and Request for Additional Information EDI transactions to 6020.


  • Must make Prior Authorization Requirements, Documentation and Decision (PARDD) rules discoverable.
  • Must include up-to-date Prior Authorization data within Patient Access FHIR data.
  • Must include the clinical data (USCDI from the 275) used in the Prior Authorization decision in the Patient Access API.
  • Must share Patient Access FHIR and Prior Authorization data with patients, providers and other health plans.

The following graphic highlights the relationship between the three major interoperability rules.

Moves FHIR processing to the EDI gateway

Together, these three rules dramatically transform interoperability, changing FHIR processing from a back-end warehousing and Application Programming Interface API concern into a front-end daily business operations activity.

The biggest impacts for health plans entail support for HL7 messages and FHIR processing in the EDI flow. They also require HL7 payloads in the Prior Authorization and attachment review process. Finally, both Prior Authorization and clinical attachment data must be available to patients, providers and plans through the Patient Access API processes. This change requires new EDI processing, rule-driven Prior Authorization requirements and documentation discovery support and new terminology services to support electronic and manual PA reviews.

To meet this need, the EDI gateway will become a primary FHIR translator for the payer system. This involves:

  • accepting and translating new HL7 messages from providers into data used by the Medical Necessity Review and Claim Resolution teams.
  • generating the appropriate USCDI resources from the attachment data
  • interpreting and correctly responding to FHIR-based PARDD requests based on business rules maintained by the policy unit.

New legislation requirements

The initial patient access legislation simplified access to existing health data for patients. The new rules extend that data access to providers and other payers. This new legislation requires a focus on core architectural updates to payer systems and supporting systems to enable the mandated changes. They push interoperability from a back-end reporting capability to a front-end business process to improve health outcomes and reduce the burden of delivering healthcare. Medical review staff will need to become familiar with new healthcare nomenclature and new data formats. Data warehouses will need to accept and access new clinical data.

The increased focus on Prior Authorization processing requires the ability to electronically share the PA Requirements, Documentation and Decision (PARDD) and support processing of a mandatory HIPAA transaction for Attachments. The Prior Authorization rules are designed to reduce the delays and barriers in authorizing medically necessary treatment. The FHIR data extract used to populate the patient access APIs must include Prior Authorization and Attachment data.

States and health plans must start planning for these changes now and budget for the technical and operational changes needed to meet these rules.

Stay tuned for the next post, “How We Got Here,” which connects the past 15 years of legislation and industry activities that collectively led us to this point.


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Jeff Strand

As a Senior Business Architect, Jeff interprets changing federal and state legislation and evolving standards into full-featured solutions with an emphasis on user touch points. Jeff has more than 37 years of experience designing, developing, and implementing healthcare processing systems. Recent experience includes implementing the Fast Healthcare Interoperability Resource (FHIR) Application Programming Interface solution in numerous states. Jeff actively participates in Industry Standards Development Organizations and is highly engaged in industry organizations to both contribute to — and learn about — successful 21st century healthcare management.


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