By Michael N. Brown, Fellow Health Partners
“Interoperability was meant to simplify healthcare. Instead, it further exposes the conflict between payers and providers.”
A Promise That’s Become a Pressure Point
The promise of interoperability has always been clear: faster care, fewer delays, better outcomes. Yet as the healthcare industry approaches the 2026 CMS Interoperability and Prior Authorization Rule (CMS-0057-F), a harder truth is emerging—what was designed to streamline care is now straining the system.
Administrative costs are climbing, payers remain unevenly prepared, and the dream of seamless data exchange is tangled in new layers of red tape. What began as a technological bridge is quickly becoming an operational burden.
The Rising Cost of Administration
Healthcare providers already spend more on administration than any other developed system in the world, and interoperability is adding to that load.
Each new API, reporting mandate, and certification requirement brings hidden costs1: IT upgrades, staff retraining, process redesign, and constant monitoring to stay compliant.
Hospitals and medical groups are dedicating more hours—and more dollars—to authorization tracking, data submissions, and payer-portal management.
Are Payers Ready—or Just Protected?
The 2026 rule calls for faster turnarounds—seven days for standard authorizations, 72 hours for expedited requests2—and clear public reporting of approval rates.
But many payers appear more focused on protecting themselves than preparing for true transparency. Compliance frameworks are being built around defensibility rather than usability—checklists that satisfy regulators but do little to improve provider workflows or patient access.
Worse, some insurers still operate on undermining the very interoperability they are supposed to enable. Providers are expected to move in real time while payers continue to process through outdated systems.
Authorizations: From Safeguard to Roadblock
Prior authorization was once a safeguard against unnecessary care. Today, it’s an obstacle to necessary care. The percentage of services requiring prior authorization has skyrocketed, especially in high-volume specialties like imaging, orthopedics, and pain management.
Automation was meant to help—but without payer alignment, most providers are simply automating multiple processes as opposed to one. Digital paperwork moves between incompatible systems, creating friction, delays, and rising costs.
Every additional authorization represents another opportunity for delay, denial, or data failure—and added administrative expense.
The Red Tape of Reform
Regulatory enthusiasm for interoperability has outpaced operational readiness.
Each new rule, certification, audit trail, and technology solution adds a new dimension of bureaucracy. The result is a digital paradox: the more we standardize, the harder it becomes to stay compliant.
We’re witnessing the rise of a paperless bureaucracy that still behaves like the old one—only now it’s more expensive to maintain.
A Conflict of Interoperability
Interoperability was supposed to unite healthcare. Instead, it has revealed deep structural divides: Regulators want open data exchange, vendors guard proprietary platforms, payers restrict access, and providers fight for clarity.
This conflict of interoperability—between intent and execution—threatens to stall progress just when healthcare can least afford more inefficiency. Real interoperability demands shared accountability, not just shared standards.
- Quantify the Administrative Load
Measure the time, staffing, and technology costs tied to interoperability. - Hold Payers Accountable
Demand certified APIs, transparent denial data, consistency in the prior authorization process, and readiness benchmarks that match regulatory intent—not just minimal compliance. - Automate Intelligently
Use AI and analytics to streamline authorizations, detect bottlenecks, and predict denials before they occur. - Invest in Real Partnerships
Align with vendors and payers committed to interoperability certification and shared outcomes. Collaboration—not compliance—is where value lives. - Advocate Collectively
Healthcare leaders should push for pragmatic timelines and funding support to offset the growing administrative cost of compliance.
The FHP Perspective: Real Interoperability Starts with Accountability
At Fellow Health Partners, we see interoperability as more than a regulatory milestone—it’s a test of industry leadership. Through our SAVi™ Technologies, we’re helping clients automate authorizations, monitor payer responsiveness, and pinpoint where administrative friction erodes financial performance.
Because real interoperability isn’t just about connecting systems—it’s about connecting accountability across payers, providers, and patients.
Until that alignment exists, healthcare will continue to overspend on administrative tasks versus delivering care.
1 McKinsey & Company’s report “Administrative simplification: How to save a quarter-trillion dollars in US healthcare estimates” that U.S. healthcare administrative spending is about $950 billion, and that roughly $265 billion (≈28 %) of those costs could be reduced via simplification—highlighting the magnitude of administrative burden linked to mandates and process complexity. McKinsey & Company+2The Hamilton Project+2
2Federal Register of the CMS 0057 F rule that includes the 72-hour standard for expedited prior-authorization decisions. Within the rule’s text, it states that beginning Jan. 1, 2026 (for certain payers) impacted payers must issue prior authorization decisions: “no later than 72 hours for expedited requests” and “no later than 7 calendar days for standard requests.”
