The Challenges of Implementing and Upgrading Core Claims Systems

Every few years, health plan executives face the same question: stick with their core claims platform they know, or invest in the upgrade that promises better performance, new compliance capabilities, and future-proof scalability.  

On paper, upgrading a core claims systems seem straightforward. In practice, it is anything but. Behind every upgrade lies a tangle of operational disruption, hidden costs, and strategic decisions about whether incremental improvements are enough — or whether the organization needs a bigger rethink of its core system.

For CEOs, the issue is no longer whether their core systems can process claims reliably — it can. The real question is how to navigate the complexity of implementation and upgrades in a way that preserves agility, controls cost and positions the plan for a fast-changing regulatory environment.

The Implementation Challenge

Core claims systems are designed as a flexible, rules-driven platform that can accommodate the diverse needs of Medicaid, Medicare Advantage, and commercial lines of business. That flexibility is its strength — and its weakness.

Each new implementation or upgrade requires an enormous degree of configuration, testing, and integration. Payers must align their latest version of their claims systems with legacy systems (eligibility, prior authorization, provider directories, member portals), and each integration point introduces risk. A single misalignment in provider contracting rules or claims adjudication logic can cascade into payment errors, member dissatisfaction, or regulatory exposure.  

Moreover, because most core systems are often deeply customized during initial deployment, upgrades rarely feel like “plug and play.” They often require re-engineering workflows, re-validating interfaces, and retraining staff. What should be a version change can feel like a mini-implementation.

The Upgrade Bottleneck

Most payer CEOs hear the same refrain from their operations and IT leaders: “The upgrade will pay for itself in efficiency.” In theory, yes. New versions introduce better automation, compliance updates, and reporting tools. However, large-scale payer platforms were not designed in an era of real-time interoperability. Many of their core workflows still rely on batch processing, extensive customization, and legacy integration patterns. As a result, upgrades are rarely simple. Migrations can stretch across months, often introducing new bugs or defects that disrupt daily operations. The bottleneck is in execution.¹

• Downtime risk: Even short disruptions in claims processing create reputational and financial exposure. A day of delays can ripple into member grievances and provider abrasion.

• Testing burden: Because payers often maintain highly customized rule sets, regression testing is complex and resource-intensive. IT teams must simulate thousands of claims scenarios before a go-live.

• Cost creep: What starts as a “standard upgrade” can balloon into a multi-million-dollar initiative once consulting, testing, downtime mitigation, and staff retraining are factored in.

For CEOs, the bottleneck isn’t simply technical. It’s strategic: How many resources should be spent on making the old platform incrementally better, versus rethinking whether a next-generation solution is needed?

Regulatory Pressures

Upgrading a core claims system cannot be deferred indefinitely. Many core claims, enrollment, and utilization management systems remain siloed, limiting real-time insights and slowing operations. Regulatory requirements—like CMS’s interoperability and prior authorization rules (CMS-0057-F), network adequacy reporting, and transparency mandates—further raise the stakes, demanding standardized APIs, automated reporting, and faster turnaround.² Without modernization, payers risk inefficiency, compliance gaps, and the inability to respond rapidly to operational pressures.

The compliance bar is also moving faster than typical upgrade cycles. A system refreshed every three to five years may not keep pace with annual regulatory changes. This creates a structural tension: the need for compliance agility versus the slow, heavy cadence of traditional upgrades.

The Organizational Strain

When implementations succeed, they can streamline claims workflows significantly. But these gains are not automatic, upgrades also test organizational resilience. Claims staff must learn new interfaces. Clinical teams relying on UM and PA modules must adapt workflows. The transition phase often requires running parallel systems, and custom integration work with provider portals, EHRs, and third-party vendors. Finance leaders face budget overruns. And executives must explain to boards why a platform upgrade is consuming so much capital and time.

For many plans, this strain is amplified by workforce realities. IT and operations teams are already lean. Pulling them into months of testing and implementation work diverts attention from member experience, provider relations, and innovation. The opportunity cost is real.

Making the Strategic Choice

Here is where CEOs must step back and ask the bigger question: Is the goal to modernize your core claims system, or to modernize the enterprise?

• Incremental approach: Continue upgrading, absorb the disruption, and bolt on compliance tools as needed. This preserves continuity but risks technical debt and operational fatigue.

• Transformational approach: Use the upgrade decision as a pivot point to evaluate alternative platforms, cloud-native solutions, or modular architectures that align with where the industry is headed.

Neither path is inherently right or wrong. What matters is clarity: knowing the true costs of incrementalism versus transformation and aligning the decision with the payer’s broader strategy.

Toward a Smarter Upgrade Strategy

So how should CEOs approach the next round of implementation or upgrade? A few guiding principles stand out:

1. Treat upgrades as enterprise projects, not IT projects. The impact crosses claims, UM, provider relations, finance, and compliance. Governance must reflect that.

2. Model total cost of ownership. Factor in not just licensing and consulting, but also downtime, retraining, and opportunity cost.

3. Benchmark against regulatory timelines. Ask whether the upgrade cycle will keep pace with CMS mandates, or whether external modules will still be needed.

4. Invest in interoperability first. Whether sticking with your current claims system or moving beyond it, APIs, FHIR compliance, and real-time data exchange should be the non-negotiable foundation.

5. Build for flexibility. The real risk is not just being behind today but being unable to adapt tomorrow.

The Bottom Line

For payer CEOs, the question is not whether the platform can do the job. It can — and does, for millions of members nationwide. The real issue is whether the cost, complexity, and cadence of implementation and upgrades align with the demands of a regulatory environment that moves faster than traditional IT cycles.

Compliance is non-negotiable. Execution at speed and scale is existential.

At Mizzeto, we help health plans navigate the challenges of implementing and upgrading their core claims systems, turning complex technology transitions into smooth, high-impact changes. Our services streamline operations, modernize claims, and promote connectivity between disparate systems. By breaking down silos, automating data exchange, and delivering real-time operational insights, we help plans turn upgrades into a foundation for resilience, compliance, and measurable ROI.

Upgrading a claims system is more than a technical project—it’s a test of whether a health plan can translate technology into agility, compliance, and measurable impact.

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SOURCES

1. Payer Claims & Administration Platforms 2023 Vendor Performance in a Segmented Market
2. CMS Interoperability & Prior Authorization Final Rule

For years, prior authorization (PA) has been a symbol of healthcare’s administrative drag. Providers fax requests, chase approvals, and wait days—or weeks—for decisions. Patients, meanwhile, bear the cost of delay: disrupted treatment plans, postponed surgeries, and in some cases, preventable harm.

That status quo will not survive 2026.

Under CMS’s Interoperability and Prior Authorization Final Rule (CMS-0057-F), payers must meet strict turnaround standards: urgent requests decided within 72 hours, and standard ones within seven calendar days. For an industry accustomed to workflows that stretch far beyond those timelines, this represents a fundamental shift. The countdown has begun.

What’s Really at Stake

At its core, the new mandate is about more than speed. It’s about rebalancing the relationship between patients, providers, and payers. Physicians have long argued that PA undermines clinical autonomy and delays necessary care. Nearly 90% of physicians say prior authorization leads to care delays, and more than one in four report that it has led to serious adverse events—including hospitalizations.¹

By imposing the 72/7 standard, CMS is forcing payers to move from reactive, paperwork-heavy systems to real-time, digital workflows. Failure to adapt is not just a compliance risk—it’s a reputational one. Every denial, every delay, and every approval rate will soon be publicly visible. Members and providers will know which plans meet expectations and which fall short.

The Operational Challenge

For payers, the challenge is not theoretical — it’s operational. Prior authorization remains one of the most resource-intensive processes in healthcare, requiring armies of staff and expensive workflows to manage intake, clinical review, documentation, and appeals. Large national plans process millions of requests annually, with even modest inefficiencies magnified at scale into significant costs and compliance risks.

Recent analysis underscores the stakes. According to The Costly Lever of Prior Authorization, the average manual PA transaction costs payers $3.52 each; however, a fully electronic PA transaction costs a payer $0.05.² Multiplied across tens or hundreds of thousands of PAs per year, that difference becomes millions in needless administrative spend. Meanwhile, a Milliman study in Massachusetts estimated that reducing or eliminating PA for certain services could meaningfully reduce allowed costs for payers in commercial and Medicaid markets.³

The interlocking challenges can be summed up as:

1. Volume at scale — Processing millions of requests annually means even small workflow delays or manual-intensive steps can push plans past CMS’s 72-hour and 7-day limits, or inflate admin costs significantly.

2. Complexity of cases — Many requests require extensive documentation across multiple systems; manual routing, appeals, and follow-ups add both time and cost.

3. Transparency pressures — Starting in 2026, plans must not only meet deadlines but also publish performance data. Missed timelines or unclear denials will quickly erode trust with regulators, providers, and members. Public reporting would also expose costs and inefficiencies to scrutiny.

In other words: compliance with the rule is table stakes. Execution — at speed, at scale, and under public scrutiny — is existential.

Technology Is Necessary, but Not Sufficient

The 72/7 mandate is often framed as a technology problem: build APIs, adopt FHIR standards, automate intake. And while these are critical, technology alone won’t close the gap. The deeper challenge is aligning people, processes, and policy around new ways of working.

Consider intake. Optical character recognition (OCR) can digitize clinical documents, and natural language processing (NLP) can extract relevant details. But unless review workflows are redesigned to integrate those insights—triaging straightforward cases for auto-approval, surfacing complex ones for clinical review—the gains will be marginal.

Similarly, APIs enable real-time data exchange, but if provider portals remain clunky or staff training is neglected, friction will persist. As with most transformations, the bottleneck is rarely the tool. It’s the adoption.

The Strategic Imperative

The countdown to 72/7 is more than a compliance deadline; it’s a strategic forcing function. Plans that embrace it can reposition themselves as faster, more transparent, and more provider-friendly. Those that resist risk being labelled as laggards in a market where provider trust is already fragile.

The logic is straightforward:

• Faster approvals reduce provider friction, leading to stronger networks and fewer out-of-network escalations.

• Clear, consistent denials minimize appeal rates and litigation risk.

• Transparent performance reporting builds member confidence at a time when health plan trust lags behind most other industries.

Seen through this lens, the rule is not just a regulatory burden. It’s an opportunity to differentiate.

Turning Deadline into Advantage

So how can payers get from here to 2026 without stumbling? The path forward involves four priorities:

• Automate intake at scale – Replace manual data entry and faxes with OCR, NLP, and API-driven submissions. Free staff to focus on clinical judgment rather than paperwork.

• Embed clinical intelligence – Use AI/ML models to summarize records, flag missing information, and suggest next steps. Ensure final decisions remain clinician-led but accelerated.

• Redesign workflows – Build parallel processing models that can handle both high-volume routine cases and complex exceptions without bottlenecks.

• Invest in transparency tools – Create dashboards to track turnaround times, denial reasons, and approval rates in real time—before CMS and the public do.

Plans that integrate these capabilities will not only meet CMS deadlines but also reduce administrative waste, strengthen provider relations, and improve member experience.

The Bottom Line

The 72/7 mandate is coming fast. By January 2026, every payer will be judged not just by regulators but by the providers and patients who experience the impact of their decisions. Compliance will be visible. Delays will be public. And excuses will no longer be tolerated.

The question for payer CEOs is not whether they can meet the letter of the rule. It’s whether they can seize the spirit of it—to turn regulatory pressure into strategic advantage.

At Mizzeto, we help payers do exactly that. Our platform combines intelligent intake automation that cuts manual review times with clinical AI integration that surfaces the right insights for faster, more accurate decisions. We also build real-time dashboards that track turnaround performance against CMS benchmarks, ensuring plans don’t just meet the 72/7 mandate but prove it with data. From streamlining utilization management workflows to enabling secure, scalable data exchange, our solution OS designed to move payers beyond compliance into true operational advantage. The 72/7 clock is ticking. The time to act is now.

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SOURCES

1. 2024 AMA Prior Authorization (PA) Physician Survey
2. The Costly Lever of Prior Authorization
3. Potential Impacts on Costs and Premiums Related to the Elimination of Prior Authorization Requirements in Massachusetts

For decades, prior authorization has been the blunt instrument of utilization management. Every MRI, infusion, or elective surgery required the same gatekeeping, regardless of whether the ordering physician had a spotless track record or a history of questionable requests. The result : clogged pipelines, overworked nurses, and exasperated providers who felt they were being second-guessed at every turn.

Now, momentum is building toward a different model. Under CMS reforms and state-level initiatives like Texas’s gold-card law, payers are experimenting with exemption programs that reduce or eliminate prior authorization requirements for high-performing providers.¹ The idea is straightforward: if a provider’s approval rates are consistently north of 90 percent, why waste administrative energy on rubber-stamping? By shifting clinical oversight to where it’s most needed, payers can cut friction while maintaining safeguards against overuse.

But the simplicity of the pitch belies the complexity of execution. For payer CEOs, the key question is not whether to gold-card providers — it’s how to design programs that are defensible, fair, and scalable in an increasingly transparent regulatory environment.

The Policy Push Behind Gold-Carding

The concept of exempting low-risk providers is not new, but the regulatory winds have shifted. In 2023, CMS’s proposed WISeR (Work to Improve Standardization of Prior Authorization Requirements) framework explicitly encouraged payers to consider differential authorization pathways based on provider performance.² At the same time, several states — led by Texas— passed laws requiring insurers to exempt physicians from prior authorization if they meet high approval thresholds.

CMS has also signaled that “burden reduction” is now a formal policy objective. In fact, in the 2024 Interoperability and Prior Authorization Final Rule, the agency underscored its intent to reduce unnecessary PAs while strengthening transparency and data sharing.³ For payers, this is not just an option — it’s a compliance expectation wrapped in a market imperative.

Redefining Utilization Management as Risk Distribution

At its core, gold-carding reframes UM from a one-size-fits-all process into a system of risk distribution. High-performing providers are effectively “trusted” to order without friction, while oversight is concentrated on outliers. The potential benefits are significant:

• Faster patient access to care.
• Reduced provider abrasion and administrative cost.
• Reallocation of clinical staff time toward complex, high-risk cases.

But with those benefits come risks. Exemptions, if poorly designed, can lead to unchecked overuse, uneven enforcement, and reputational blowback if patients or regulators perceive favoritism.

The Design Challenge: Fairness, Defensibility, Trackability

Building a gold-card program that stands up to scrutiny requires rigor on three fronts:

1. Fairness     → Criteria for exemption must be objective, transparent, and consistently applied. Approval rate thresholds should be clearly defined, risk-adjusted for patient mix, and re-evaluated regularly. Otherwise, payers risk accusations of bias or anticompetitive behavior.
2. Defensibility     → Every exemption policy must be anchored in data that can withstand audit. With CMS now requiring public reporting of prior authorization metrics, payers will need to demonstrate that exempted providers still meet quality and cost benchmarks.
3. Trackability     → Exemptions cannot be “set and forget.” Payers need real-time dashboards to monitor ordering patterns, detect drift in provider behavior, and quickly revoke exemptions if abuse emerges.

This is where technology becomes central. Without robust analytics and interoperable data systems, exemption programs risk becoming unmanageable at scale.

Providers Welcome It — With Caveats

Unsurprisingly, provider groups have pushed hard for gold-carding. The American Medical Association has called excessive prior authorization a leading driver of physician burnout, with 86 percent of physicians reporting that PA delays care.⁴ From the provider’s perspective, exemption is overdue recognition of clinical expertise.

Yet even among clinicians, there are concerns. Some worry that tying exemptions strictly to approval percentages may penalize those who care for complex, high-risk populations, where denials are more common. Others point out that exemption does not reduce documentation burden unless paired with true interoperability — otherwise, the paperwork just shifts downstream.

The Strategic Choice for Payers

For payer executives, the decision is less about whether to gold-card and more about how to do it without destabilizing UM. Key choices include:

• Scope: Which service categories are safe to exempt (e.g., advanced imaging) versus too costly or risky (e.g., oncology drugs)?
• Frequency: How often should exemption eligibility be reassessed — annually, quarterly, or in real time?
• Transparency: How much of the exemption logic should be shared with providers, regulators, or even members?

Handled well, gold-card programs can become a strategic differentiator — improving provider relationships, reducing administrative waste, and aligning with CMS’s burden-reduction agenda. Handled poorly, they risk accusations of lax oversight, cost overruns, and regulatory penalties.

The Bottom Line

Gold-carding is more than a provider-pleasing gesture. It is a rebalancing of clinical risk — away from the blanket suspicion of all orders and toward targeted oversight of outliers. For payers, the opportunity is clear: exemption programs can cut costs, ease provider friction, and demonstrate compliance with CMS’s call for smarter, less burdensome UM.

But success depends on execution. Exemptions must be grounded in transparent criteria, backed by auditable data, and monitored continuously. That requires more than policy — it requires technology.

At Mizzeto, we help payers build precisely these capabilities: advanced analytics for provider performance, interoperable dashboards to monitor exemptions in real time, and UM platforms that align compliance with efficiency. For payer CEOs navigating the shift, the choice is not whether to distribute clinical risk — it’s whether to do so with the infrastructure to make it sustainable.

SOURCES

1. FAQs on Preauthorization Exemptions (“Gold Card” Act)
2. CMS WISER Model
3. CMS Interoperability and Prior Authorization Final Rule
4. AMA Survey Highlights Growing Burden of Prior Authorization on Physicians, Patients

For more than a decade, the Affordable Care Act (ACA)marketplaces have been a proving ground for U.S. health coverage. Enrollment has grown steadily—reaching 21.4 million people in 2024, the highest ever recorded since the ACA’s passage in 2010, according to HHS data.¹ But growth has also drawn scrutiny. Are networks sufficient? Are subsidies sustainable? And are consumers being steered into plans that fit their needs, or into products that maximize broker commissions?

In April 2024, the Centers for Medicare & Medicaid Services (CMS) finalized the 2025 Marketplace Integrity and Affordability Rule, a sweeping regulation designed to tighten oversight of ACA plans. For payers active in this space, the rule is far more than a compliance exercise. It is a stress test of operational discipline, affordability strategy, and long-term reputation.

Understanding the Rule: Guardrails for Growth

At its core, the rule establishes new guardrails to protect members and restore public trust in ACA coverage. Among its most notable provisions:

• Network adequacy requirements are being strengthened, including time-and-distance standards for provider access.
• Agent and broker oversight is expanded, with CMS cracking down on misleading marketing and enrollment practices.
• Premium alignment and subsidy rules are clarified to prevent distortions from “silver loading” and other pricing maneuvers.
• Risk adjustment methodology is refined to limit gaming and improve fairness across plans.
• Special enrollment protections are broadened, particularly for vulnerable populations transitioning between coverage.

Together, these rules reflect a single objective: ensuring that ACA marketplaces are not only growing, but doing so in a way that is affordable, accessible, and trustworthy.

Implications for Payers

The immediate effect of the rule is to raise the baseline expectations for payers. Network adequacy, for instance, is no longer a matter of marketing claims—it will require demonstrable compliance with uniform national standards. That puts pressure on provider contracting, data accuracy, and real-time monitoring systems. Plans that have relied on narrow networks as a lever to control costs may find those models increasingly difficult to sustain.

Risk adjustment is another pressure point. The ACA marketplace has always depended on risk adjustment to stabilize competition and prevent cherry-picking of healthier members. CMS’s refinements signal that aggressive coding strategies—so familiar in Medicare Advantage—will not be tolerated in the same way here. Instead, payers will need to build risk adjustment approaches that are analytically rigorous, transparent, and audit-ready. That will require investment not just in analytics, but in governance and compliance infrastructure.

The new guardrails on agent and broker behaviour strike at the heart of distribution strategy. Complaints about misleading marketing have surged in recent years—more than 90,000 in 2023 alone, according to CMS data.² The new rule makes clear that CMS will not tolerate abusive practices. For payers, this means doubling down on compliance programs, tightening oversight of third-party distribution, and potentially investing in direct-to-consumer channels that reduce reliance on brokers altogether.

And then there is affordability. Subsidies remain the lifeblood of marketplace enrollment—according to Kaiser Family Foundation(KFF), as of 2025, 92% of ACA Marketplace enrollees receive a subsidy (Advanced Premium Tax Credit).³ But CMS’s new scrutiny of premium alignment and silver loading is a signal that creative pricing strategies are reaching their limits. CFOs will need to model subsidy flows with greater precision, ensuring that premiums are sustainable while remaining compliant with evolving federal rules.

Strategic Connections: More Than Compliance

Stepping back, the through line of this regulation is trust. CMS is asking payers to run their ACA business with the same operational rigor already expected in Medicare Advantage and Medicaid managed care. For executives, this has three interrelated consequences.

First, reputation management becomes inseparable from compliance. Marketplace plans are highly visible, and violations—whether inadequate networks or aggressive broker tactics—can quickly draw media and regulatory scrutiny. A lapse here is not just a legal risk; it is a brand risk.

Second, operational scalability is no longer optional. Stricter adequacy standards, enrollment oversight, and risk adjustment rules require infrastructure that can flex with growth. Manual workarounds may suffice for a few thousand members, but they will not withstand enrollment at the scale the marketplaces now represent.

Third, regulatory convergence is accelerating. What happens in ACA will not stay in ACA. CMS is deliberately harmonizing standards across programs, and the lessons learned in marketplace compliance will almost certainly shape the expectations for Medicare Advantage, Medicaid managed care, and even commercial exchange products. In other words, this rule is not just a one-off correction; it is a preview of where payer regulation as a whole is heading.

From Regulation to Strategy

For payer CEOs, the task now is not to build a compliance checklist but to seize the opportunity for long-term advantage. That means investing in provider data infrastructure to ensure that network adequacy can be demonstrated in real time, not after the fact. It means designing risk adjustment programs that can withstand audit without undermining competitive positioning. It means deploying analytics to model premium and subsidy interactions with precision, building pricing strategies that are resilient to regulatory change. And it means rethinking distribution oversight—not simply to police brokers, but to redesign member acquisition in ways that emphasize transparency and trust.

This is not just an operational mandate; it is a strategic one. The payers that embrace these changes will differentiate themselves not only in the ACA marketplace but across all lines of business. They will be seen as organizations that can scale growth while maintaining affordability, access, and compliance—qualities that regulators, providers, and members all increasingly demand.

The Bottom Line

The 2025 Marketplace Integrity and Affordability Final Rule is about more than patching gaps in oversight. It is CMS’s blueprint for a more consumer-centered insurance market—one where affordability, access, and transparency are non-negotiable. For payers, compliance is necessary, but it is not sufficient. The real opportunity lies in treating the rule as a catalyst: to clean up distribution, strengthen networks, and align pricing strategies with sustainable growth.

Payers who approach the rule narrowly, as a burden, will face mounting costs, reputational risk, and potential market exit. But those who meet it with vision will not only pass the integrity test; they will emerge stronger, with the infrastructure, credibility, and agility to lead in a converging regulatory environment.

At Mizzeto, we specialize in helping payers make that leap—from compliance to leadership. Our solutions in provider data management, risk adjustment analytics, and enrollment oversight are designed to help plans not just meet CMS requirements, but reimagine their core operations for resilience and growth.

The test of integrity is here. The question is not whether payers can comply, but whether they can transform.

SOURCES

1.  Nearly 24 million Consumers Have Selected Affordable Health Coverage in ACA Marketplace. With Time Left to Enroll

2. 2025 Marketplace Integrity and Affordability Final Rule | CMS

3. How much and why ACA Marketplace premiums are going up in 2026