Article

The Great Payer Pivot

Payers are shifting left and that's
good for healthcare

Shrey Sekhar

Vice President – Client Partner,
CitiusTech

Venkatesh Bagal

Senior Healthcare Consultant,
CitiusTech

22-June-2026

In recent months (maybe more), an increasing number of Payers have been working their way into the Provider workflows and doing so in an effort to eliminate friction.

~80% of claim denials are considered preventable, originating in fixable Provider-side errors
$262B estimated annual cost of denials, a burden shared by Payers and Providers alike
41% of Providers in 2025 report more than 10% of claims denied, a systemic problem demanding systemic solutions

To truly understand how Payers are moving to the left, it is important to understand why the ground is now fertile for that shift. There are two major shifts taking place that are changing the economic and regulatory environment in the Payer-Provider relationship; one has to do with how the Providers have united together as a unit; the second is the manner in which the law allows Providers to be funded.

Force #1: Provider Networks

Providers are starting to think like Payers

The last decade has seen a rising consolidation of US Providers into Integrated Delivery Networks (IDNs), Clinically Integrated Networks (CINs), and Accountable Care Organizations (ACOs). As of 2025, 476 ACOs participated in Medicare's Shared Savings Program, covering 11.2 million traditional Medicare beneficiaries, supported by more than 655,000 Providers.

These structures are no longer passive claim-submitter only. Under models like ACO REACH, where Providers can accept full capitation and assume 100% of savings and losses, Provider organizations are directly managing population risk. The incoming LEAD Model (2027), ACO REACH's 10-year successor, deepens this further, extending accountable care to complex, high-needs populations with prospective payments.

A Provider organization managing capitated Medicare risk does not merely want cleaner claims, it needs the same data intelligence, utilization insights, and cost-of-care analytics that Payers have always commanded. The convergence is structural: Providers acting like Payers creates a natural demand for Payer-grade operational tools. And Payers, recognizing this, are supplying them.

Force #2: Stark Law Reform

Regulatory unlock that changed the funding equation

Due to the long-standing Stark Law (federal self-referred physician’s statute), Providers and Payers have historically been cautious in structuring financial arrangements. Any remuneration perceived as an incentive for referrals could trigger significant compliance risk, including denial of payment, civil monetary penalties, and potential liability under the False Claims Act.

Beginning in January 2021, however, the previously relaxed approach to compliance has significantly diminished when CMS made its landmark changes to the Stark Law as part of its Regulatory Sprint to Coordinated Care reforms. Three new exceptions to the Stark Law were developed to be applied to value-based arrangements based on their level of financial risk:

1. No downside risk arrangement

2. At least 10% meaningful downside risk arrangement

3. Full Financial Risk arrangement, including global capitation

A new exception was also created that allows Payers to provide cybersecurity technology and EHR tools to the physician so that the compliance barrier that had previously prevented the type of technology sharing that enables the shift left can no longer be a consideration.

As a result, the financial arrangements between Payers and Providers that have required very expensive legal hoops to cross are now expressly permitted, and therefore, we have the opportunity to witness a new level of Payer investment in Provider infrastructure.

The connection: Integrated Provider networks that accept risk need Payer-grade tools to manage it creating demand for this "shift left". Stark Law reforms removed the legal barriers that had historically prevented Payers from funding or embedding those tools in Provider organizations. Together, these two forces created both the market pull and the regulatory permission for what follows.

The problem Payers have been living with

Before discussing solutions, it's worth naming the problem clearly from a Payer's perspective. Every denied claim represents not just a payment withheld, but a cascade of administrative cost spanning human reviewers, appeals processing, regulatory compliance, and dispute resolution. Payers aren't indifferent to this friction and absorb it too.

The core challenge is that a significant proportion of denials are rooted in entirely avoidable errors on the Provider side like missing prior authorization, unspecified or incorrect diagnosis codes, documentation that doesn't support medical necessity, or claims submitted without required attachments. These aren't bad-faith disputes; instead process failures that can be prevented at source with better-connected, better-informed Provider workflows.

Add to that the complexity Payers manage: thousands of Provider organizations, most with different EHR systems, billing practices, and staff capabilities submitting claims against an ever-evolving grid of Payer-specific coverage rules, CMS mandates, and clinical guidelines. The information asymmetry has always flowed in one direction.

Payers see patterns across millions of claims. Providers often don't know a rule has changed until a claim comes back denied.

WHERE DENIALS ACTUALLY COME FROM — THE PROVIDER-SIDE REALITY

Common Provider-Originating Causes

Prior authorization not obtained or submitted incorrectly
Unspecified, outdated, or mismatched diagnosis codes
Missing clinical documentation to support medical necessity
Eligibility not verified at point of service
Duplicate claim submissions or billing errors
Services submitted outside contracted coverage rules

What "Shifting Left" Solves

Real-time prior auth checks embedded in the EHR workflow
AI flags coding issues before claim submission
Documentation prompts at point of care, not post-billing
Eligibility and coverage validation at scheduling
Payer-specific edit libraries applied pre-submission
Predictive scoring surfaces high-risk claims for review

The shift left: Fixing problems at source, not in appeals

The strategic logic of the Payer shift left is straightforward and sound: it is cheaper, faster, and better for all parties to prevent a denial than to process one. Each denied claim that leads to repeated appeals increases costs for Payers through staff time, compliance risks, and lower member satisfaction. The denial is not a revenue event for the Payer; it is an administrative failure with a price tag on both sides.

What has changed is the technical feasibility of doing something about it. Advances in AI, machine learning, and interoperability standards, particularly CMS-0057F mandate on prior authorization APIs, have made it possible to push Payer-side intelligence directly into Provider workflows in real time. The claim can now be checked against coverage rules, clinical guidelines, and prior auth requirements before it is submitted, not weeks later when it arrives in a denial queue.

Leading Payers and Payer-adjacent platforms are acting on this opportunity in meaningful ways and the industry should recognize these efforts for what they are: an attempt to make the system work better at the point where it most often breaks down.

Why this can be a win for the whole system

SHARED BENEFITS OF THE SHIFT LEFT

For Payers

Fewer claims require expensive manual review
Lower administrative cost per clean claim processed
Reduced appeals volume and associated legal exposure
Better compliance with CMS-0057 prior auth mandates
Stronger, more trusted provider network relationships
Improved member experience when care isn't delayed

For Providers

Faster, cleaner claims mean faster payment cycles
Less staff time on denials and appeals rework
Payer rules surfaced at the point of care, not post-denial
Predictive tools reduce revenue leakage proactively
Smaller organizations gain access to enterprise-grade intelligence
Clinical staff spend less time on administrative friction

The industry has long operated on a model where Payer and Provider were adversarial by default; each optimizing for their own side of a transaction that neither fully controlled. The shift left disrupts that dynamic in a constructive way. When Payers invest in helping Providers submit cleaner claims, the denial seldom happens (never in an ideal world). There is no overhead cost to process it, no staff time on either side consumed by appeals, and no member caught in the middle of a billing dispute.

The outcomes are also achieved in a timely manner (regulatory check - tick). CMS's prior authorization interoperability rules (CMS-0057F) are requiring Payers to expose their coverage and authorization APIs to providers in real time. Payers who are already building Provider-facing intelligence tools are ahead of a regulatory curve that will eventually make this the standard of care for administrative operations and not an optional value-add.

The honest acknowledgment is that AI-driven denial prediction works best when the data loop between Payer and Provider is tight.

Platforms like Experian Health's AI Advantage which trains on historical claims data and Payer behaviour report that 69% of Providers using AI solutions have seen reduced denials and higher re-submission success. The technology is mature enough to move the needle, and Payers who enable that maturity on the Provider side are investing in a healthier ecosystem, not just a better product portfolio.

Signals for the future of Payer strategy

The Payer shift left is ultimately a signal of strategic maturity. The most forward-thinking health insurers are no longer defining their role as gatekeepers who adjudicate claims after the fact. They are positioning themselves as partners in care delivery efficiency as organizations that add value by making the clinical-administrative interface work better for everyone.

This matters beyond technology. It reflects a recognition that Payers and Providers are not natural adversaries and that they are partners in funding and delivering care to the same member populations. When Providers are drowning in administrative complexity, that complexity eventually surfaces as delayed care, Provider burnout, and member dissatisfaction; outcomes that hit Payer quality scores, star ratings, and ultimately, competitive positioning.

The Payers investing most aggressively in Provider-facing intelligence tools are making a calculated bet: that reducing friction upstream is worth more in cost, in trust, in regulatory goodwill, and in member outcomes than any short-term savings from a denial queue.

For the health system as a whole, that is exactly the right bet to be making.

This shift left is the right direction, hopefully we go further

When Payers invest in solving Provider-side problems before they become denials, everyone wins: members get timely care, Providers get paid faster, and Payers reduce one of their largest administrative cost centers. The technology is ready. The regulatory momentum is real. The question is how fast the industry moves together.

Sources:

GeBBS Healthcare 2025 Strategic Denial Management analysis; Experian Health State of Claims 2025; MDaudit 2025 denial trends report; Becker's Hospital Review / Optum Real and Digital Auth Complete launch (Feb–Mar 2026); Union Healthcare Insight Q2 2025 payer earnings analysis; RevCycleAI Optum and Change Healthcare vendor analyses; Availity Essentials Pro platform documentation; HFMA revenue cycle benchmarking data; Omega Healthcare 2025 payer trends report

All statistics sourced from published industry research.