TEFCA Unlocks Interoperability: How Healthcare Software Can Use TEFCA to Connect to Customers

Joe Tuan

Founder, Topflight Apps

December 16, 2024

“We need to integrate with Epic.” Five words that make every healthcare startup founder wince. You’ve been there – watching your sales cycle stretch as integration discussions drag on, your engineering team getting pulled into yet another custom implementation, your costs mounting while innovation takes a back seat.

The traditional point-to-point integration model isn’t just inefficient; it’s actively strangling healthcare innovation. But what if there was a way to build that connection once and never worry about it again? TEFCA promises exactly that, and while it’s not a silver bullet, it’s reshaping how healthcare software connects to customers. Let’s talk about what you need to know before making your move.

Key Takeaways:

• Early TEFCA adoption could be a competitive advantage: While widespread adoption isn’t expected until late 2025 or 2026, organizations that build expertise now will have a significant head start in scaling their solutions and could see lower customer acquisition costs through standardized implementations.
• The Healthcare Operations Purpose of Use pathway is emerging as an unexpected game-changer: It offers broader access than Treatment-based approaches and could become the preferred route for many healthcare applications, especially those serving both providers and payers.
• Success with TEFCA requires a three-horizon strategy: Immediate hybrid connectivity approach, mid-term flexible architecture development, and long-term technical alignment with TEFCA’s evolving standards like the SSRAA Implementation Guide.

Table of Contents:

1. The Integration Cost Issue
2. TEFCA as a Strategic Solution
3. Implementation Pathways and Access Models
4. Challenges and Strategic Considerations
5. Action Plan for Leaders

The Integration Cost Issue

Healthcare software’s point-to-point integration model is draining resources and stifling innovation. While this might not be obvious during sales calls, the actual cost of traditional EHR integrations is staggering. Consider the toll of:

• implementation timelines
• maintenance
• lost opportunities
• customer resourcing and competing priorities

The Strain on Vendors and Health Systems

Every new customer means building and maintaining custom connections—like constructing a unique bridge for every city. This process can take months, require specialized teams, and demand constant upkeep. For health systems, the challenges are just as daunting:

• IT teams juggle dozens—or hundreds—of unique connections.
• Each new tool requires:
  • Bespoke contracting
  • Lengthy integration projects.
  • Exhaustive security reviews.
  • Ongoing maintenance efforts.

The Business Impact

The result? Stalled sales cycles, growing implementation backlogs, and stifled innovation. Health systems are forced to limit tech adoption simply because they can’t handle more integration projects.

This isn’t just an inefficiency—it’s a strategic bottleneck. And as healthcare data grows more complex, the problem is only getting worse.

TEFCA as a Strategic Solution

TEFCA is like healthcare’s version of the internet protocol—transforming “build a new connection for every partner” into “connect once, reach everyone.” Instead of hundreds of individual connections, TEFCA enables software vendors and health systems to establish one connection to access a nationwide network.

Beyond Basic Connectivity

TEFCA simplifies connections while solving long-standing challenges like Record Location, helping organizations locate patient data across the ecosystem. It also standardizes previously chaotic processes like data exchange for quality measurements or prior authorization, making workflows faster and less costly.

A critical component of TEFCA is the Qualified Health Information Network (QHIN). Think of a QHIN as the “onramp” to TEFCA—a trusted, certified organization that facilitates access to the nationwide network. For healthcare software vendors, partnering with a QHIN eliminates the need for custom integrations with every individual health system.

The Business Case for TEFCA

The business implications are significant:

• Shrink implementation timelines from months to weeks.
• Free up engineering teams to focus on product innovation.
• Accelerate sales cycles by eliminating technical barriers.
• Help health systems adopt new solutions more quickly.
• Slash operational costs for everyone involved.

The Power of Network Effects

The more organizations that join TEFCA, the more valuable the network becomes. Early adopters are already reaping rewards like reduced implementation costs and faster time-to-value. Moving quickly positions organizations to scale efficiently as the network grows.

Implementation Pathways and Access Models

Let’s cut through the complexity of TEFCA access models and focus on what actually matters for your organization. There are four main ways to tap into this network, and your choice has major strategic implications.

BAA-Based Access: The Familiar Path

BAA-based access is the most familiar path – it’s for organizations that already have Business Associate Agreements with health systems. If you’re already operating in healthcare, this is likely your starting point. It works within existing contractual relationships but moves them onto a more efficient network.

• Key advantage: Retain existing business relationships with simplified technical implementations.
• Ideal for organizations already embedded in healthcare, looking for a low-risk transition.
• No constraints for how data flows across the network. Organizations with an external agreement can trade data via TEFCA almost any way they’d like.

Purpose of Use-Based Access: The E-ZPass for Data

Purpose of Use-based access is where things get interesting. It enables almost immediate data access without pre-existing contracts, but comes with strict requirements. Think of it as an E-ZPass for health data – you can move fast, but you need to follow the rules and pay the tolls.

• Best for organizations who have use-cases that fit within the pre-defined “SOPs” created for TEFCA

Treatment Purpose of Use: Not for Everyone

The Treatment Purpose of Use pathway deserves special attention. If you’re building tools for direct patient care, this seems like the obvious choice. But here’s the catch: TEFCA defines “treatment relationship” very specifically. The recent Particle Health and Epic dispute has made everyone extremely cautious about who can claim treatment relationships. Unless you’re absolutely certain you qualify, consider other options.

• Best suited for healthcare providers directly involved in patient treatment.
• Not recommended for organizations that do not directly treat patients, as they may not qualify under TEFCA’s strict definitions.

Healthcare Operations Purpose of Use: The Dark Horse

Healthcare Operations Purpose of Use is emerging as the dark horse in this race. It’s particularly powerful for applications that need to work with both providers and payers. Yes, you’ll need to implement specific HL7 Da Vinci FHIR standards, but the payoff is worth it – you get standardized access to data for quality measurements, prior authorizations, and similar operations.

Strategic Implications: Choosing the Right Path

The strategic implications here are significant:

• BAA-based access is safe but requires maintaining individual relationships
• Purpose of Use-based access offers speed but demands rigorous compliance
• Treatment Purpose of Use carries high scrutiny and potential risks
• Healthcare Operations pathway offers broad access but requires specific technical implementations

Your choice of access model isn’t just a technical decision – it fundamentally shapes your go-to-market strategy and scaling potential. Choose based on your business model and growth plans, not just your current technical capabilities.

Challenges and Strategic Considerations

Let’s be realistic about where TEFCA stands today and what it means for your strategic planning. This isn’t a plug-and-play solution yet, and understanding the challenges is crucial for making informed decisions.

Network Maturity Gap

First, the adoption challenge: while TEFCA promises universal connectivity, we’re not there yet. Health system adoption is gradually increasing, but we’re looking at 2025 before we see widespread participation. This creates a strategic dilemma – move early to position yourself advantageously, or wait until the network effect kicks in?

The answer depends on your market position and risk tolerance. Early movers are already building expertise and relationships, but they’re also dealing with the inevitable growing pains.

Standards Evolution Risk

The FHIR implementation timeline adds another layer of complexity. Yes, you can exchange FHIR data through TEFCA today, but the standardization is still evolving. The practical implication? You’ll need flexible architecture that can adapt as standards mature. Organizations that build rigid systems around current specifications may face significant refactoring costs.

Future Technical Requirements

Then there’s the technology readiness factor. By 2026, TEFCA FHIR will require specific technologies that aren’t widespread today, like the SSRAA Implementation Guide for client registration. This isn’t just a technical detail – it’s a strategic consideration that should influence your development roadmap and resource allocation.

Strategic Planning Horizons

Here’s what this means for your planning:

• Short-term: You need a hybrid strategy that works with both TEFCA and traditional integrations
• Mid-term: Your architecture needs to be flexible enough to evolve with TEFCA standards
• Long-term: Your technology stack needs to align with TEFCA’s future requirements

The organizations that will navigate these challenges successfully are those that view TEFCA not as a simple integration choice, but as a fundamental shift in how healthcare software connects and scales.

Action Plan for Leaders

Let’s cut through the theory and focus on concrete next steps. Here’s what you need to do now to position your organization for success with TEFCA, regardless of when you plan to implement.

Building Your Business Case

Start with a realistic assessment of your current integration costs. Track not just the direct implementation expenses, but the hidden costs: delayed implementations, maintenance overhead, lost sales due to integration complexity, and engineering resources diverted from product development. This baseline helps justify TEFCA investments and sets realistic ROI expectations.

Next, evaluate your access model options based on your business strategy, not just technical considerations:

• If you’re already established with multiple BAAs, start planning your transition to BAA-based TEFCA access
• If you’re targeting rapid scale, investigate Purpose of Use-based access requirements
• If you’re building operations tools, prioritize understanding the Healthcare Operations pathway

Technical Preparation and Expertise Development

Technology readiness is critical. Audit your current stack against TEFCA’s future requirements, particularly around FHIR implementation and security standards. Build a roadmap that aligns your technology evolution with TEFCA’s timeline. The goal isn’t immediate compliance – it’s ensuring you’re not painted into a technical corner.

Most importantly, start building expertise now. The companies that will maximize TEFCA’s benefits are those that understand its nuances before full-scale adoption hits. Assign someone to own your TEFCA strategy. Have them track adoption trends, monitor standard evolution, and build relationships with key network participants.

Think of TEFCA as the next generation of healthcare connectivity. Those who prepare now will be ready to scale when the network effect kicks in. Those who wait risk playing catch-up in a transformed marketplace.

The question isn’t whether to adopt TEFCA – it’s how to position your organization to thrive in a TEFCA-connected healthcare ecosystem.