Category: Uncategorized

Regulatory change in healthcare rarely arrives all at once—but now, several major policy shifts are coming into effect on January 1, 2027. Health plans that start planning for these changes now will be better positioned to avoid disruption. Payers that choose to wait risk facing compliance gaps, operational friction, and negative member impact. 

During the August meeting of the HealthEdge® Regulatory Compliance User Group, our experts discussed the adjustments to interoperability, obstetric coding, Medicaid work requirements, and the No Surprises Act—some are finalized, some are still proposed, and all of them deserve your attention. 

Key Takeaways 

• Interoperability requirements under CMS-0057-F are driving significant platform development across the industry. 

• Obstetric CPT coding is being restructured by the American Medical Association (AMA), effective January 1, 2027—this change is finalized. A proposed CMS rule could create a dual-track billing system, but it’s not yet final. 

• Federal Medicaid work requirements take effect January 1, 2027, with Nebraska already dis-enrolling members and more states entering enforcement phases. 

• No Surprises Act qualified payment amount (QPA) calculation rules are being revised following recent court decisions, and a proposed rule on Advanced Explanation of Benefits (AEOB) may arrive as early as September 2026. 

• Health plans should monitor multiple regulatory tracks simultaneously, as finalization timelines differ and some states are moving independently of federal outcomes. 

Interoperability: Where Do Health Plans Stand on CMS-0057-F? 

The Centers for Medicare and Medicaid Services (CMS) interoperability final rule—known as CMS-0057-F—requires health plans to build out a set of application programming interfaces (APIs) covering provider directory access, patient access, provider access, and payer-to-payer data sharing. These aren’t new requirements, but the compliance deadlines are real and approaching. 

HealthEdge is actively working to support HealthRules® Payer customers in meeting these requirements. Progress is underway across the required API capabilities, with work continuing toward full compliance. Health plans should be reviewing their own readiness now—not just vendor readiness, but internal data governance, provider outreach, and testing timelines. 

The broader industry implication here is significant. Interoperability isn’t just a compliance checkbox. Done well, it improves care coordination, reduces administrative burden on providers, and gives members better access to their own health information. 

Obstetric Coding Changes: What’s Finalized and What’s Still Proposed? 

The AMA’s Decision Is Final 

Starting January 1, 2027, the American Medical Association (AMA) will eliminate global maternity CPT codes—the longstanding billing model that bundled antepartum care, delivery, and postpartum care into a single code. In their place, the AMA has introduced phase-based billing codes that separately capture each stage of obstetric care: antepartum, labor and delivery, and postpartum. 

This change is finalized. It will happen regardless of what CMS does or doesn’t do at the federal level. 

What CMS Is Still Deciding 

CMS’s proposed 2027 Physician Fee Schedule introduces 15 new G codes (a specialized set of HCPCS Level II billing codes) designed to let health plans continue using a global billing model as an alternative to the new phase-based approach. If finalized, this would create a dual-track system—one using the AMA’s new codes, one using the CMS G codes—that could introduce significant complexity for health plans, providers, and billing departments alike. 

The comment period on this proposed rule closes September 14, 2026, with a final rule expected in early November 2026. 

Adding another layer of complexity: some states aren’t waiting for the federal outcome. New York, for example, is moving forward with adopting the new AMA obstetric codes on its own timeline. Health plans operating in multiple states should prepare for a fragmented implementation landscape, at least in the near term. 

Medicaid Work Requirements: What’s Live, and What’s Coming? 

Federal Requirements Take Effect January 1, 2027 

Federal Medicaid work requirements—formally called “community engagement requirements“—are set to take effect nationally on January 1, 2027. These rules require certain Medicaid beneficiaries to meet minimum work, volunteering, or educational activity thresholds to maintain eligibility. 

Some states are getting ahead of this deadline with their own guidelines. 

Where States Stand Right Now 

• Nebraska is the first state to enforce work requirements and currently the only state actively dis-enrolling members. Approximately 200 members were dis-enrolled in the first enforcement round, with that number expected to grow as more members reach renewal periods. 

• Montana and Arkansas are live with their programs but remain in soft-launch, notice-only phases—no dis-enrollments have occurred yet. 

The Medical Frailty Exemption Dispute 

CMS narrowed the medical frailty exemption to a stricter, case-by-case standard, limiting the number of beneficiaries who qualify for an automatic carve-out from work requirements. Several states filed legal challenges seeking to pause enforcement. An emergency injunction request was denied in July 2026, though the underlying legal case remains open. Health plans operating in affected states should continue monitoring litigation developments closely, as a court ruling could alter exemption criteria with limited notice. 

No Surprises Act: Court Decisions and What Comes Next 

QPA Rules Are Shifting 

The No Surprises Act established a process for determining the qualified payment amount (QPA)—the benchmark used to calculate out-of-network payments. Several rules governing QPA calculations have been struck down by the courts in recent months, including: 

• A prohibition on using so-called “ghost rates”—low-volume or atypical rates—in median in-network rate calculations 

• A requirement to incorporate bonus and incentive payments into QPA calculations 

These court decisions create immediate operational questions for health plans managing out-of-network payment disputes. The Departments of Health and Human Services (HHS) issued a statement confirming that they are coordinating with other authoritative agencies on guidance in response to the August 2026 Texas Medical Association decision.   

AEOB Rule on the Horizon 

A proposed rule addressing Advanced Explanation of Benefits (AEOB)—a long-pending piece of the No Surprises Act—may be released as early as September 2026. AEOB requirements would obligate health plans to provide members with cost estimates before they receive certain services. This has significant implications for plan systems, provider data infrastructure, and member communications workflows. 

Stay Ahead of What’s Coming 

The regulatory calendar heading into 2027 is one of the most complex in recent memory. Health plans are managing finalized changes, proposed rules still in comment or forthcoming, active litigation, and court decisions that will likely result in revised calculations. 

The plans that navigate this successfully will be the ones that invest in monitoring, preparation, and flexible operational infrastructure now. 

For continued updates as these rules finalize and take effect, explore HealthEdge’s regulatory compliance resources—including webinars, blog posts, and expert analysis designed to help your health plan stay ready for whatever comes next. 

Key Takeaways

• As the January 1, 2027, Application Programming Interface (API) deadline approaches, many health plans are finding that testing is surfacing additional considerations they hadn’t anticipated ahead of implementation.

• Phased engagement, strategic collaboration, and testing are essential building blocks. Without these elements in place, a successful transition to full interoperability is difficult to achieve.

• Provider buy-in is critical. Without it, the potential of APIs to transform healthcare operations remains largely untapped.

• Health plans that invest in education and change management now will be better positioned. Those that act early will meet the 2027 deadline with greater confidence and fewer disruptions.

• Interoperability isn’t just a compliance requirement—it’s an opportunity. Health plans that embrace it can reduce administrative burden and improve data accuracy across the healthcare ecosystem.

Health plans are under growing pressure to meet the upcoming API requirements outlined by the Centers for Medicare and Medicaid Services (CMS). The 2027 deadline for full interoperability aims to streamline data exchange and reduce administrative burdens, but technical compliance alone won’t deliver the intended benefits.

This was a key focus during the HealthEdge^® July Regulatory Compliance User Group discussion. Participants highlighted that the real roadblock to progress lies in driving provider buy-in and adapting workflows to support these new requirements. Without these pieces in place, the potential of APIs to transform healthcare operations remains largely untapped.

Overcoming Barriers to Adoption

APIs hold significant potential to enhance interoperability across the healthcare ecosystem, enabling smoother and more accurate data exchanges between health plans, providers, and other stakeholders. Yet, for many organizations, the path to implementation remains fraught with challenges. Instead of acting as transformative tools, APIs often become just another layer of submission methods. This limits their ability to reduce administrative burdens and achieve broader operational efficiency.

Key Issues Health Plans Are Facing:

1. Provider Resistance: Many providers hesitate to adopt APIs, citing concerns about how they might disrupt established workflows or fail to deliver clear advantages.

1. Misaligned Expectations: Health plans anticipating immediate compliance often face resistance, as providers need time to adjust their systems and processes.

1. Expanding Scope: While the 2024 CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) applies specifically to government lines of business, many health plans are extending their compliance efforts to commercial lines as well—adding additional scope to an already complex implementation.

The gap between technical readiness and actual adoption underscores the importance of addressing these challenges early in the planning process. Without provider engagement, the full potential of APIs to reduce administrative burdens and enable better care coordination remains unrealized.

Strategies to Drive Success

Experts agree that organizations should not view API compliance as a purely technical task. Instead, health plans must adopt a proactive, collaborative approach to overcome adoption barriers. This requires engaging providers, building strategic partnerships with technology vendors, and ensuring workflows are fully aligned with the new requirements.

Actionable Steps:

1. Early Provider Engagement: Start outreach efforts as soon as possible. Providers need time to understand how APIs will impact their day-to-day operations and to see the direct benefits of adoption.

1. Phased Implementation: Gradual rollout targets allow providers to adjust to new workflows while maintaining compliance with deadlines. This approach also gives health plans the flexibility to refine processes based on real-world feedback.

1. Collaborate with Vendors: Strong partnerships with technology vendors are critical for success. Vendors can help health plans test integrations, optimize API functionality, and ensure that new workflows are seamlessly incorporated into existing systems.

These strategies emphasize the need for a balanced, methodical approach. By involving providers early and working closely with vendors, health plans can ease the transition while laying the groundwork for long-term benefits.

The Importance of Testing and Planning

Testing API readiness is not just a procedural requirement—it’s a vital step to ensure a smooth transition. Advanced planning and phased rollouts minimize risks while maintaining momentum toward compliance goals. Communication with providers and vendors throughout the process is also essential to address any potential issues proactively.

Why Testing Matters:

• Ensures APIs integrate seamlessly with existing workflows, minimizing disruption.

• Identifies potential issues early, avoiding costly delays and setbacks.

• Builds provider trust by proving the system’s reliability and readiness.

Health plans that prioritize detailed testing and careful planning will be better positioned to meet compliance requirements while maintaining operational stability.

Turning Compliance Into Opportunity

While regulatory deadlines are critical, they also represent an opportunity for health plans to drive innovation and improve operations. APIs, when implemented thoughtfully, can strengthen relationships with providers, streamline administrative processes, and enhance member outcomes.

For example, APIs can enable real-time data sharing between providers and health plans, leading to faster, more accurate decisions about patient care. They also create a foundation for broader digital transformation initiatives, such as predictive analytics, population health management, and personalized member engagement.

By prioritizing collaboration, flexibility, and forward-thinking strategies, health plans can turn regulatory compliance into a strategic advantage. This not only ensures they meet the 2027 deadline but also positions them for sustained success in an increasingly digital healthcare landscape.

Ready to Get Ahead of 2027?

With multiple deadlines converging at once, prioritization and cross-functional coordination aren’t optional—they’re essential. Health plans that start structured planning now, rather than waiting for final rules, will be better positioned to meet these deadlines without operational disruption.

HealthEdge customers: Join our Regulatory and Compliance User Group—a forum where regulatory professionals collaborate and share best practices.

Not a HealthEdge customer? Read our guide on how to future-proof your health plan against ongoing regulatory shifts: “Six Regulatory Developments Health Plans Can’t Afford to Miss Before January 1, 2027”

Frequently Asked Questions

How Do Advanced Technologies Like APIs Enhance Provider Collaboration?

Application Programming Interfaces (APIs) simplify the exchange of data between health plans and providers, ensuring accurate and up-to-date information flow. This improves provider relationships, facilitates better care coordination, and enhances member experiences. HealthEdge solutions ensure seamless data sharing, enabling timely decisions and stronger member engagement.

How Can Health Plans Improve Cost Management Without Compromising Member Care?

Health plans can harness data-driven insights to uncover inefficiencies and identify savings opportunities. HealthEdge solutions provide advanced analytics and pre-built integrations to streamline operations, reduce unnecessary expenses, and maintain high-quality care for members.

What Are the Biggest Compliance Challenges Facing Health Plans Today?

Regulatory complexity isn’t a new problem for health plans—but it’s getting harder to manage. Legacy systems struggle to keep pace with the update frequency and data sharing requirements that modern regulations demand, leaving organizations vulnerable to compliance gaps and rising administrative costs.

HealthEdge ranked #1 among 20 firms in Black Book Research’s Q3 2026 Payer IT Consulting report—learning the highest overall satisfaction score of 9.40 out of 10 across 558 executives at 118 organizations and leading 10 of 18 payer-specific KPIs including regulatory execution and readiness, core administration modernization and interoperability.

 

Key Takeaways 

• Operational readiness now matters more than policy interpretation. One year in, health plans understand what the One Big Beautiful Bill Act (OBBBA) requires. The real test is executing those requirements consistently across millions of member interactions. 

• Member engagement has become a compliance strategy. Many eligible members lose coverage because of missed deadlines, incomplete documentation, and confusion, not because they don’t qualify. Proactive outreach helps prevent avoidable disenrollment. 

• Care management plays a central role in eligibility support. Care managers often spot members who may qualify for exemptions or need extra help. Pairing clinical insight with eligibility monitoring lets plans intervene before coverage gaps appear. 

• Connected workflows are essential to success. Manual tracking and periodic campaigns won’t keep up. Plans that integrate engagement, administrative, and compliance activities can reduce coverage disruptions and adapt as state guidance evolves. 

 Why operational readiness (not regulatory interpretation) will determine success 

When the OBBBA became law in July 2025, health plans immediately focused on understanding what the legislation would require. Much of the early discussion centered on policy questions:  

• How would Medicaid work requirements be implemented?  

• Which member populations would be affected?  

• How would eligibility and enrollment processes change?  

• What would this mean for health plan operations and financial performance? 

One year later, many of those questions have clearer answers. With the Centers for Medicare and Medicaid Services (CMS) issuing its Interim Final Rule on Medicaid Community Engagement Requirements and states shifting from planning to implementation, health plans are gaining a much better understanding of what operational readiness will require. 

What’s becoming increasingly clear is that OBBBA is not simply introducing new compliance obligations. It is fundamentally changing how health plans identify, engage, and support Medicaid members throughout the eligibility lifecycle. 

The challenge isn’t just understanding the new policy but executing it effectively. 

For many organizations, that means building capabilities that didn’t previously exist at this scale. Member identification, eligibility monitoring, exemption tracking, documentation management, digital outreach, care coordination, and workforce capacity are becoming tightly connected. Historically segmented departments must now work together to help eligible members maintain coverage while meeting new federal and state requirements. 

Compliance Is Giving Way to Operational Complexity 

When OBBBA was enacted, health plans anticipated additional reporting requirements, tighter eligibility oversight, and significant administrative work to support state Medicaid programs. Those expectations were well-founded. 

What many organizations didn’t anticipate was how quickly those policy changes would reshape day-to-day operations. 

The June 2026 CMS Interim Final Rule makes that operational reality much clearer. Beyond defining eligibility requirements, the rule outlines expectations for member outreach, exemption processes, documentation, reporting, and coordination before new requirements take effect. In many cases, outreach to affected members must begin months before implementation, creating entirely new operational responsibilities for health plans and their state partners. 

For health plans operating across multiple states, implementation becomes even more complex. State timelines, operational approaches, and reporting requirements continue to evolve, requiring organizations to adapt while maintaining consistent member experiences. The Kaiser Family Foundation Medicaid Work Requirements Tracker illustrates how implementation strategies continue to differ from state to state, creating additional complexity for regional and national Medicaid organizations. 

Success depends on whether they can consistently coordinate eligibility support, documentation, member communications, and compliance activities across thousands—or even millions—of member interactions. 

 Member Engagement Is Becoming a Compliance Strategy 

Perhaps the biggest lesson from OBBBA’s first year is that member engagement is no longer simply a customer experience initiative. It is becoming a core component of regulatory execution. 

Much of the discussion surrounding Medicaid work requirements focused on eligibility verification and reporting. Equally important, however, is helping members successfully navigate the process. 

Many eligible beneficiaries lost coverage because of procedural barriers rather than lack of qualification. Missed deadlines, incomplete documentation, unanswered notices, and confusion about eligibility requirements all contributed to avoidable coverage loss. The Urban Institute’s analysis of Medicaid enrollment under OBBBA suggests these administrative challenges could continue as new requirements are implemented. 

For health plans, the implications are significant. Supporting members may now require identifying individuals who are subject to work requirements, educating them about available exemptions, reminding them to complete required activities, monitoring documentation, and intervening before procedural issues result in unnecessary disenrollment. 

Helping members successfully complete administrative requirements is increasingly becoming as important as helping them access care.  

Care Management Is Becoming Part of the Eligibility Strategy 

As health plans prepare for the next phase of OBBBA implementation, they’re recognizing that eligibility support extends well beyond enrollment operations.  

Organizations that can identify members needing assistance, personalize outreach, and coordinate communications across areas like member services, compliance, and care management will be better positioned to preserve coverage continuity while meeting new regulatory expectations. 

Care managers aren’t responsible for determining eligibility, but they are often the first to recognize members whose medical, behavioral, or social circumstances may qualify them for exemptions or who need additional support navigating new requirements. By combining clinical insight with eligibility monitoring and proactive outreach, health plans can intervene earlier, before coverage gaps appear. 

That matters because the consequences of coverage gaps extend well beyond enrollment numbers. 

When eligible members lose Medicaid coverage for procedural reasons, interruptions in care often follow. Members may delay treatment, miss preventive services, discontinue medications, or lose access to care management programs that support chronic conditions and complex health needs. For health plans, unnecessary disenrollment also increases administrative workload, creates avoidable member churn, and often requires significant effort to restore coverage once eligibility issues have been resolved. 

Successfully supporting members under OBBBA will require more than periodic outreach campaigns or manual tracking spreadsheets. Health plans need connected workflows that bring together engagement, administrative, and compliance activities so every team is working from the same, up-to-date information. 

Looking Beyond Compliance 

One year after OBBBA became law, health plans have a much clearer understanding of what the legislation requires. The greater challenge now is building the operational capabilities needed to execute those requirements consistently across millions of member interactions. 

Organizations that connect eligibility support, member engagement, care management, and compliance through integrated workflows will be better positioned to reduce unnecessary coverage disruptions, improve member outcomes, and adapt as federal and state guidance continues to evolve. 

HealthEdge® Care Solutions help health plans bring these capabilities together through integrated care management, digital member engagement, and connected workflows that improve visibility, coordination, and operational efficiency across Medicaid programs. As implementation continues, organizations that invest in these capabilities will be better prepared not only to meet evolving regulatory requirements but also to deliver a more seamless experience for the members they serve. 

Discover how a modern, integrated ecosystem can help your health plan navigate the complexities of OBBBA with confidence and future-proof your strategy. Download our eBook, “Decoding the One Big Beautiful Bill Act: A strategic Guide for Health Plans.” 

For Medicare Advantage plans, Star Ratings have always been a critical measure of quality and performance. But maintaining high ratings has become increasingly difficult. 

The numbers tell the story. The percentage of beneficiaries enrolled in 4+ Star Medicare Advantage Prescription Drug (MA-PD) plans dropped from 75% in 2024 to 62% in 2025. Meanwhile, average MA-PD Star Ratings have declined for four consecutive years, falling from 4.37 in 2022 to 3.92 in 2025.  

Much of this is attributed to the Centers for Medicare and Medicaid Services (CMS) introducing methodological and measure-level changes, including: 

• Continued phase-in of Tukey outlier deletion 

• Removal of COVID-era flexibilities 

• Measure-weighting adjustments 

• Return to more normalized cut-point calculations, which have made year-over-year performance increasingly difficult to predict and sustain 

The stakes are high. Plans that fall below 4 Stars lose access to the 5% Quality Bonus Payment (QBP) and face lower rebate percentages, creating financial pressure at a time when medical costs continue to rise, and margins remain under strain. Yet many organizations focus their efforts on the back end of the quality process—like reporting, submissions, audits, and gap closure—after the underlying data has already been created. 

This raises an important question: Are health plans trying to improve Star Ratings too late in the process? 

Performance Measurement is Just the Beginning 

When Star Ratings decline, most organizations respond by focusing solely on quality programs. They invest in HEDIS® reporting, member outreach campaigns, provider engagement initiatives, and gap closure efforts. Those activities are essential for success. But they don’t always capture the entire picture. 

By the time a measure appears on a dashboard, or a member is identified for outreach, the underlying data has already been generated. If that data is incomplete, incorrect, or delayed, every subsequent quality activity becomes more difficult. 

Predictive models become less reliable. Provider performance reporting may be misrepresented. Gap closure efforts can target the wrong members at the wrong time. Teams can spend valuable time reconciling data instead of acting on it in ways that improve results. 

The challenge isn’t measuring quality but ensuring that the information used to measure quality is accurate. 

Better Star Ratings Start Upstream 

This is where many health plans have an opportunity to rethink their approach. 

Traditionally, payment integrity has been viewed as a cost-containment function focused on recovering overpayments and reducing waste. But prospective payment integrity can play a much larger role in quality performance. 

HealthEdge Source™, the industry’s leading prospective payment integrity solution, helps health plans improve data accuracy before claims are paid. By validating claims against millions of payment and reimbursement rules in real time, HealthEdge Source helps ensure that the data flowing through the organization is more accurate, complete, and actionable from the start. 

That matters because many of the activities that influence Star Ratings depend on claims data. 

Accurate claims data supports more reliable HEDIS measurement and regulatory reporting. Real-time visibility into admissions can help identify members who may benefit from earlier interventions. Fewer billing errors and surprise denials can contribute to better member experience and improved CAHPS® performance.  

And by reducing the administrative burden associated with correcting payment errors after the fact, organizations can redirect resources toward initiatives that improve quality outcomes and member engagement. 

Clean Data Alone Doesn’t Improve Star Ratings 

Clean claims data doesn’t close care gaps. It doesn’t engage members. It doesn’t improve medication adherence. And it doesn’t submit HEDIS measures. 

What it does do is create the conditions for those activities to be more effective. 

This is where many organizations miss an important connection. Payment integrity and quality programs are often managed as separate functions, even though they rely on the same underlying information. One team focuses on data accuracy. Another focuses on quality outcomes. 

The plans that consistently outperform their peers increasingly recognize that those efforts are interconnected. 

Turning Trusted Data into Measurable Outcomes 

Once health plans have confidence in the integrity of their data, they can focus on improving performance. 

HealthEdge Quality Solutions help organizations transform accurate data into measurable quality outcomes through Stars program management, HEDIS administration, predictive analytics, quality reporting, gap closure initiatives, and member engagement programs. 

For example, Quality360® supports HEDIS measurement and submission through an NCQA-certified measure engine, configurable data ingestion, audit-readiness capabilities, sample-and-chase management, and year-round quality monitoring. Complementary analytics and reporting tools provide executive dashboards, measure-level reporting, provider scorecards, real-time performance tracking, and predictive modeling that help plans identify opportunities before they affect Star Ratings. 

HealthEdge Stars programs extend these capabilities through consulting services, forecasting, competitive benchmarking, “Path to 4 Star” modeling, and initiative execution designed to help organizations prioritize the actions most likely to improve performance. Rather than waiting until reporting season to assess results, plans can continuously monitor performance, identify emerging risks, and intervene earlier. 

The result is a connected approach to quality improvement: 

Accurate Data → Better Insights → Targeted Action → Improved Outcomes → Higher Star Ratings 

Connecting Payment Integrity and Quality Performance 

As Star Ratings become more difficult to achieve, health plans can no longer afford to think about payment integrity and quality improvement as separate initiatives. 

One ensures the data is accurate. The other ensures that data is transformed into action. 

When these functions operate together, organizations can identify opportunities earlier, improve the effectiveness of quality initiatives, and create a more reliable path to better outcomes. 

The results demonstrate the impact of this approach.  

• HealthEdge Quality360® clients have achieved a 95%+ retrieval rate, a 100% medical record review validation pass rate, 77%+ year-over-year hybrid measure improvement, zero audit issues on retro submissions, and up to 28% Stars improvement.  

• HealthEdge’s Stars programs have also helped plans achieve 4-Star and 4.5-Star ratings while delivering highly accurate forecasting and an average 3% increase in HEDIS ratings across clients. 

In today’s Medicare Advantage environment, the most successful organizations won’t be the ones that simply measure quality more effectively. They’ll be the ones that connect data integrity, quality measurement, analytics, and member engagement into a single strategy. 

See how HealthEdge Risk & Quality solutions can enable your health plan to achieve double-digit improvements in risk score accuracy. Read the case study, “From Underperformance to a 4+ Star Rating: How HealthEdge Propelled a Health Plan to Quality Excellence and Revenue Growth.” 

 

HEDIS® is a registered trademark of the National Committee for Quality Assurance (NCQA). 

CAHPS® is a registered trademark of the Agency for Healthcare Research and Quality (AHRQ). 

Why Health Plans Need More Than Capacity to Compete in an Era of Growth, Complexity, and AI

For years, scalability was largely viewed as a technology concern. As long as claims were processing, members were enrolling, and systems stayed online, scalability rarely made its way into executive discussions.

That is changing.

Today, health plans face a convergence of pressures unlike anything the industry has experienced before. Costs continue to rise. Regulatory requirements are becoming more complex. Medicare Advantage enrollment continues to grow. New interoperability mandates require real-time access to information.

At the same time, organizations are expected to modernize operations, improve member and provider experiences, and prepare for an AI-driven future. According to the HealthEdge® 2026 Healthcare Payer Survey, managing costs remains the industry’s top challenge, while modernization, regulatory compliance, and growth pressures continue to climb on executive priority lists.

The challenge is that every one of these priorities depends on a common foundation: the ability of core administrative systems to perform at scale. Scalability is important not only for handling the growing volumes and complexities of claims processing but also during peak periods, such as open enrollment, effective dates, and end-of-year claims.

Growth Typically Means More Complexity

Growth remains a strategic priority for many health plans, whether through expanded enrollment, new lines of business, acquisitions, or geographic expansion. But growth brings operational complexity.

Medicare Advantage illustrates why scalability matters now. More than 35 million beneficiaries are enrolled in Medicare Advantage plans, an increase of approximately 1.1 million members in a single year. Medicare Advantage populations also generate significantly more claims activity than commercial populations, creating greater processing demands across enrollment, claims, prior authorization, billing, and provider interactions.

At the same time, health plans are being asked to support increasingly sophisticated benefit structures, value-based arrangements, interoperability requirements, and digital experiences. As organizations grow, a critical question emerges:

Can the platform at the center of your operations keep up?

A New Definition of Scalability

When many organizations think about scalability, they focus on processing higher transaction volumes.

But for the most innovative health plans, the real question is not whether a platform can handle more claims. It’s whether the platform can support the organization’s long-term strategy.

A scalable platform enables growth by giving health plans the confidence to expand into new markets, support rising enrollment, launch new products, and pursue acquisition opportunities without worrying that legacy operational systems will become a bottleneck. It transforms growth from an operational risk into a strategic opportunity.

Scalability also improves responsiveness. As transaction volumes increase, health plans must continue delivering fast, reliable interactions across claims processing, eligibility verification, prior authorization, enrollment, and provider-facing services. Higher throughput and lower latency help organizations maintain service levels during periods of peak demand while supporting increasingly complex operations.

Reliability matters just as much. Open enrollment periods, year-end claims activity, regulatory deadlines, and seasonal utilization surges all place extraordinary demands on administrative systems. Platforms that can maintain stable performance under concurrent workloads give leaders greater confidence that business objectives can be achieved without sacrificing service quality or operational performance.

There are financial implications as well. According to the HealthEdge payer survey, 27% of health plan leaders identified modernization or consolidation of core administrative systems as a primary strategy for reducing costs and improving efficiency. A scalable, cloud-optimized platform reduces administrative friction, the risk of system downtime, and enables organizations to achieve greater economies of scale as volume grows.

Why the Cloud Changes the Equation

Health plans expectations for core administrative platforms have shifted dramatically in response to modern cloud architecture.

Cloud-based platforms like AWS provide the flexibility, performance, and resiliency needed to support rapid growth and ongoing innovation. They also create the foundation for real-time data exchange, advanced analytics, automation, and AI-enabled operations.

HealthEdge recently demonstrated what a shared AI platform can achieve. In partnership with AWS, enhancements to the HealthRules® Payer platform delivered a fourfold increase in demonstrated scalability while reducing key transaction latencies by more than 50 percent. Performance testing demonstrated the ability to support claims volumes equivalent to a health plan with more than 40 million members on a single instance while maintaining strong performance across critical operational functions.

The significance of these findings extends well beyond benchmark results. It demonstrates how modern cloud architecture can help health plans prepare for future growth without compromising speed, reliability, or responsiveness.

The Connection Between Scalability and AI

According to the most recent HealthEdge payer survey, 94% of health plans are either actively using or adopting AI across administrative or clinical functions. Nearly half report widespread or departmental adoption. AI is rapidly becoming a core strategy for improving efficiency, reducing costs, enhancing decision-making, and modernizing operations.

But AI success depends on more than algorithms.

Organizations need platforms capable of supporting greater data volumes, real-time information exchange, automation workflows, and increasingly sophisticated operational processes. Without a scalable foundation, AI initiatives risk becoming constrained by the very systems they are intended to improve.

This is yet another reason HealthEdge has invested heavily in cloud modernization and AI infrastructure.

The Cost of Waiting

Many organizations still view scalability as something to address only after performance challenges begin to emerge. The problem with that approach is that scalability issues rarely surface at convenient times. They tend to appear during periods of growth, acquisitions, open enrollment, regulatory change, product launches, or other business-critical initiatives.

Organizations that invest in scalable platforms before they need them are often better positioned to adapt to market changes, support innovation, pursue growth opportunities, and respond to evolving regulatory requirements with confidence.

Looking Beyond Today’s Demands

The most successful health plans are not building for today’s transaction volumes. They are increasingly prioritizing modernization, automation, interoperability, and connected operations as they navigate mounting industry pressures. Scalability sits at the center of all of those priorities.

Download the Full White Paper

To explore the full results of HealthEdge’s scalability testing, including the engineering innovations, AWS collaboration, testing methodology, performance benchmarks, and business implications for health plans, download the white paper: Platform Scalability: The Business Case for Growth, Performance, and Future Readiness.

 

Key Takeaways

• January 1, 2027 is a major regulatory milestone. Multiple regulatory deadlines—including prior authorization API requirements, work requirement mandates, and the AMA obstetrics billing restructure—take effect simultaneously.
• The WCAG 2.1 deadline extension is runway, not a reprieve. Health plans with federal and state contracts should accelerate digital accessibility remediation now to avoid exposure across audits, Star Ratings, and contract reviews.
• The No Surprises Act IDR process has been overhauled. A new final rule introduces standardized remark codes, mandatory payer registration, and a streamlined dispute portal—all requiring immediate workflow assessment.
• Medicaid State Directed Payments face new caps. A proposed rule could significantly limit payment structures, and the comment window closes July 21, 2026.
• OB billing restructure planning can’t wait. The American Medical Association’s (AMA) global maternity code overhaul takes effect January 1, 2027, and the operational implications span contracts, claims configuration, and utilization management.

Across the healthcare industry, operational complexity is mounting, timelines are converging, and January 1, 2027 is shaping up to be one of the most consequential compliance deadlines in recent memory.

In June, the HealthEdge® Regulatory Compliance User Group brought together health plan compliance professionals to examine six major regulatory developments—all of which carry significant operational implications.

Here’s what health plan compliance teams need to know right now to be prepared for January 1.

Prior Authorization and Interoperability APIs: What’s Your Readiness Status?

Deadlines tied to the Centers for Medicare and Medicaid Services (CMS) Interoperability and Prior Authorization Final Rule (CMS-0057-F) remain among the highest-priority items for many health plan leaders. Has your health plan aligned on its implementation strategy?

If not, join the Regulatory Compliance User Group on July 21 at 1pm ET as we address API readiness, the emerging National Provider Directory, and provider data considerations surfacing through ongoing CMS dialogue.

The WCAG 2.1 Extension Isn’t Permission to Wait

In April 2026, the Department of Justice issued an Interim Final Rule extending the compliance deadline for digital accessibility under the ADA Title II rule. Large entities now have until May 2028 to conform to WCAG 2.1 Level A and Level AA standards—a one-year extension from the original deadline. The public comment period closes in early July 2026.

Health plans that contract with federal or state government—including Medicare Advantage organizations, Medicaid managed care organizations (MCOs), and issuers on federal or state-based Exchanges—are bound by additional compliance obligations. These can include specific accessibility, language access, and beneficiary communication standards tied to contract renewal, audit, and oversight cycles.

The extension is an opportunity to accelerate remediation in a way that can withstand scrutiny from multiple regulators and contracting bodies. Delays can negatively impact program audits, state Medicaid contract reviews, Star Ratings and quality oversight, and routine readiness reviews tied to federal and state contracting.

Plans that don’t yet have an accessibility audit or a phased remediation plan in place should start now.

How Does the No Surprises Act IDR Final Rule Change Payer Operations?

Published in early June 2026, the No Surprises Act Independent Dispute Resolution (IDR) Operations Final Rule is the most comprehensive update to the dispute resolution process since the program launched in April 2022. The volume of disputes has dramatically exceeded original projections—5.1 million annual submissions versus an initial estimate of 22,000—and created significant backlogs and administrative strain across the system.

Health plans must prepare for key changes, including:

• Standardized remark codes on all out-of-network remittances
• Mandatory payer registration, including disclosure of legal business name, plan sponsor name, and registration number with each initial payment or denial
• Federal IDR portal as the exclusive channel for dispute initiation, replacing bilateral outreach and response requirement
• Batch disputes capped at 50 line items, subject to defined criteria
• Administrative fee reduced from approximately $115 to $15 per party per dispute
• A phased centralized IDR gateway platform, expected later in 2026

Health plans should assess current remittance and notification workflows against these requirements and prioritize system updates accordingly.

Medicaid State Directed Payments: What’s at Stake in the Proposed Rule?

CMS released a proposed rule on May 20, 2026, targeting Medicaid State Directed Payments (SDPs). The rule suggests significant payment caps and transparency requirements that Medicaid plans will need to evaluate carefully. The comment period closes July 21, 2026—a firm deadline for plans that want to shape the final outcome.

Key proposed provisions include:

• A cap of 100% of Medicare rates for SDPs in Medicaid expansion states, and 110% for non-expansion states, effective for rating periods on or after July 4, 2025
• Where no Medicare rate exists, the limit defaults to 100% of the state plan approved rate, with limited grandfathering exceptions
• Assessment at the individual claim or service level—not in aggregate
• A phased reduction of grandfathered SDPs by 10 percentage points annually beginning with rating periods on or after January 1, 2028

Medicaid plans should evaluate current SDP structures now and engage state partners in the comment process ahead of potential finalization.

Community Engagement and Work Requirements: Managing Complexity Across 45 States

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, established community engagement and work requirements for Medicaid-eligible adults. The federal implementation deadline is January 1, 2027, applying across all 43 Affordable Care Act (ACA) expansion states, plus Georgia and Wisconsin. The requirement is 80 hours per month for able-bodied adults ages 19 to 64.

CMS published an Interim Final Rule on June 1, 2026, providing guidance on:

• Qualifying activities, including employment, education, and community service
• Self-attestation, permitted through 2027, with documentation required thereafter when reasonably available
• Medical frailty exemptions, now requiring evidence that a condition significantly impairs the ability to meet the 80-hour threshold
• MCO role clarification allows member outreach and navigation support, but eligibility determinations remain exclusively with the state

Nebraska was the first state to enforce work requirements as of May 1, 2026, with approximately 72,000 low-income adults now subject to the program. Arkansas, Montana, and Iowa are implementing their programs in July 2026.

Health plans operating across multiple states face substantial operational challenges. Data matching requirements span payroll records, federal data hub inputs, Supplemental Nutrition Assistance Program (SNAP) participation, school enrollment, VA benefit records, and corrections agency data. Claims accuracy—particularly procedure codes tied to chronic conditions—directly affects exemption determinations.

Plans should assess encounter data completeness and develop member outreach workflows aligned to each state’s verification approach.

The AMA Obstetrics Billing Restructure: Why Planning Has to Start Now

Effective January 1, 2027, the AMA’s existing global bundled CPT codes for maternity care will be retired—17 codes deleted, 12 new codes added, and six revised. Providers will instead bill separately across four phases: antepartum, labor management, delivery, and postpartum.

The American College of Obstetricians and Gynecologists (ACOG) recommends that health plans and providers begin transitioning antepartum visit billing to unbundled evaluation and management (E/M) coding no later than September 1, 2026 to help avoid administrative burden and incorrect billing once the global codes are retired.

Based on historical updates to the Physician Fee Schedule, values for the new maternity codes will likely be proposed mid-2026 and finalized around November 2026 as part of the CY 2027 Physician Fee Schedule, though this timeline has not yet been confirmed by CMS.

6 Key Priorities for Health Plans Compliance Teams Ahead of January 2027

With multiple regulatory deadlines converging on January 1, 2027, health plan compliance teams should prioritize the following actions:

• Activate prior authorization and interoperability API testing now (and send the right stakeholders to the July HealthEdge® Regulatory User Group forum).
• Accelerate WCAG 2.1 remediation across digital and member-facing platforms, using the extended deadline as runway—not a reason to wait.
• Assess remittance and payment workflows against the new IDR Operations Final Rule requirements, including payer registration and standardized remarks.
• Submit comments on the Medicaid State Directed Payments Proposed Rule by July 21, 2026, and evaluate current SDP structures against the proposed caps.
• Map community engagement implementation timelines by state, assess encounter data completeness, and develop member outreach workflows aligned to each state’s verification approach.
• Begin OB billing restructure planning immediately, including provider contract renegotiations, claims configuration timelines, and utilization management workflow updates across all impacted product areas.

With multiple deadlines converging simultaneously, prioritization and cross-functional coordination aren’t optional—they’re essential. Health plans that begin structured planning now, rather than waiting for final rules, will be better positioned to meet these deadlines without operational disruption.

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Frequently Asked Questions

What is the HealthEdge Regulatory Compliance User Group?

It’s a health plan-focused community open to all HealthEdge customers. The group meets monthly to discuss regulatory updates, their implications for HealthEdge products, and best practices among compliance professionals.

Why is January 1, 2027 such a critical compliance deadline?

Multiple major regulatory changes—including the Prior Authorization and Interoperability API requirements, AMA obstetrics billing restructure, and community engagement work requirements—all take effect on January 1, 2027, creating an unusually concentrated set of operational demands.

What does the WCAG 2.1 deadline extension mean for health plans with government contracts?

The extension to May 2028 doesn’t reduce compliance obligations for plans with CMS or state Medicaid contracts. Those plans carry parallel accessibility and communication requirements tied to contract renewal, program audits, and Star Ratings oversight. The extension should be used to accelerate remediation, not defer it.

What are the most important operational changes in the No Surprises Act IDR Operations Final Rule?

Key changes include mandatory payer registration, standardized remark codes on out-of-network remittances, exclusive use of the federal IDR portal for dispute initiation, batch dispute caps of 50 line items, and a reduced administrative fee of $15 per party per dispute.

When is the deadline to comment on the Medicaid State Directed Payments Proposed Rule?

The comment period closes July 21, 2026. Medicaid health plans and their state partners should evaluate current SDP structures and submit comments before that date.

How does the AMA obstetrics billing restructure affect health plan operations beyond claims?

The transition from global bundled CPT codes to phase-specific billing affects provider contract terms, utilization management workflows, case management processes, and claims system configuration—all of which require planning ahead of the January 1, 2027 effective date.

What should health plans do now to prepare for community engagement and work requirement implementation?

Plans should map implementation timelines by state, assess encounter data completeness—particularly procedure codes tied to chronic conditions—and develop member outreach workflows aligned to each state’s specific verification approach.