Core System Modernization: Innovative Solutions for Cost Management and Member Health

Recently, the HealthEdge® Chief Solutions Officer hosted a discussion with four health plan executives to discuss how they’re using advanced, integrated technology solutions to enhance claims processing, enrollment, payment accuracy, and provider data management at their organizations.

Panelists included:

• Vice President (VP) of a New York City-based plan serving low-income members
• Director of Operations Management of a Utah-based health plan
• Director of Vendor Management of a nonprofit health plan serving Medicaid and CHP+ members
• Senior Vice President (SVP) of Health Plan Information Services of a New York-based payer serving Medicare and Medicaid members

For the past 30 years, conversations about core processing have centered on auto-adjudication rates. While this metric is still important for controlling costs, health plan leaders are now expanding their focus to a broader set of operational goals. The rapid pace of change in healthcare requires a more holistic approach to claims management and processing.

Data Architecture that Supports Interoperability

The SVP of Health Plan Information Services noted that interoperability mandates like the Interoperability and Prior Authorization Final Rule (CMS-0057-F) from The Centers for Medicare and Medicaid Services (CMS) drove his organization to adjust its data architecture so both care providers and customer service teams have the data they need to support health plan members.

“55% of our membership is in an Independent Physician Association (IPA),” said the SVP. “We’re trying to measure and grow that number. Utilizing the HealthEdge Source™ platform to get data and work with those IPAs grow our membership, I think will bring better quality and experience to our members.”

By investing in application programming interface (API) integration tools to connect disparate systems, the plan has already seen significant improvements in its customer service operations. Integrating issue tracking within their CRM with the core system has provided member services teams with greater visibility and created a better call center experience for members.

“We have a number of complicated relationships between entities in our metro area, with complicated risk and financial arrangements,” said the Vice President. “All of that business logic has to exist in a provider data hierarchy that makes sense for us.”

By using APIs and web services to automate inbound information, the plan is successfully reducing turnaround times and lowering costs per transaction. This transition represents a multi-year journey from an inefficient legacy state to a modernized system that is transforming operational efficiency.

Taming the Provider Data Challenge

Provider data management remains a persistent and universal challenge for health plans, according to our panelists. Inaccurate provider data leads to downstream issues like claims and payment errors, which negatively impacts health plan costs as well as provider and member satisfaction.

“Our members experience us the most through our providers,” said the Vice President. “So when we get claims wrong…when we get the check wrong, when we get the directory wrong, our members feel that. Our providers feel it first, our members feel it through them, they see our name on the card and they groan. So it’s really important we improve that experience.”

As a customer of the HealthRules® Payer, HealthEdge Source, and HealthEdge Provider Data Management solutions, the Vice President also emphasized the importance of data transparency.

“Provider data flows through both systems,” he said. “Having that data flow through our ecosystem in a tightly coupled manner is what’s going to drive higher quality—and that’s what we really need at the end of the day.”

The Director of Operations Management also shared his experience navigating regulatory hurdles, as the payer’s state contract requires written approval for any AI application using state data. To address this, the organization established an AI governance committee and internal policies to streamline compliance.

“Now that we have the HealthEdge® Provider Data Management platform, we can do everything we wanted to do,” said the Director of Operations Management. “We can take data from every different source, we can give them APIs that say, ‘this is how you can give us the data we need.’ We can have that data governance to say, ‘this is what we keep, this is what we have to have, this is how we have to have it to make the data auditable.’”

The Strategic Role of AI and Automation

The conversation around AI is evolving from a data-centric view to a focus on automation and efficiency.

“What we’re focusing on right now is turnaround time on issue resolution and data exchange—when we take data in, how quickly can we get it processed?” said the Director of Operations Management. “We had so much manual functionality from enrollment to authorizations, and the question now is ‘How do we automate that?’”

Similarly, another panelist emphasized the abilities of AI-powered tools that give more time back to the humans in charge of payer operations.

“We’re planning to use AI and agentic AI to help bolster our quality overall,” said the Vice President, “and free up our FTEs to focus on more skilled, necessary activities and decision-making to keep things up-to-date. There’s a lot of advancement there, and it’s really exciting.”

But adopting AI solutions can be challenging for many health plans. For the Director of Vendor Management, strict state guidelines hinder the payer’s ability to leverage AI-powered tools. The health plan sought to leverage an AI solution to automate note-taking for conversations between interdisciplinary care teams—but it took six months to get approval, delaying their abilities to hold engaged conversations without breaking focus. Ultimately, this challenge led the payer to form its own AI governance procedures and trainings to try and innovate internally while staying in adherence with state regulations.

Integrating the Digital Health Ecosystem

The forward-thinking strategies shared by these leaders emphasize the importance of innovation and a proactive approach to addressing the evolving landscape of healthcare. By using automation, advanced data management and enhanced architecture, health plans can stay flexible while navigating regulatory demands and industry pressures. These insights show that collaboration and adaptability are key to driving meaningful change in healthcare.

“We’ve got 30 years of legacy systems on an antiquated core platform that had band-aid after band-aid built upon it, and that’s not a sustainable model,” said the Vice President. “So going to the HealthEdge ecosystem is a strategic move for us to bring our data assets closer together.”

Discover how the Public Employees Health Program (PEHP) leveraged the integrated HealthEdge Provider Data Management solution to improve data matching, regulatory compliance, and operation efficiency. Read the case study: Provider Data Management Enhances Value of Data and Employees Alike.