FHIR, TEFCA & UDS+: How Enterprise-Scale Health Systems Are Gearing Up
The U.S. healthcare industry is at an inflection point in terms of interoperability. Disconnected systems and manual data exchanges “slow you down—they put patients at risk”. To fix this, national initiatives like FHIR, TEFCA, and UDS+ are creating common standards and networks for health data exchange. Backed by federal mandates and industry support, these efforts promise a “single, unified playbook” for sharing electronic health information.
For enterprise health systems, understanding and adopting these initiatives is critical. In this article, we explain each program, its significance to large health systems, how organizations are preparing to comply, the challenges they face, and the strategic opportunities that a more interoperable future unlocks.
What Is FHIR?
Fast Healthcare Interoperability Resources is HL7’s modern standard for health data exchange. It uses web-friendly technologies to represent clinical and administrative information in modular “resources.”
In practice, this means health apps and EHRs can query specific data elements (like medications or lab results) in real time, rather than exchanging bulky text documents.
- In the words of the ONC, FHIR is a “next-generation interoperability standard” that lets data be “quickly and efficiently exchanged” at the data-element level.
- Because of its modern design, FHIR supports a wide range of applications, from patient smartphone apps to analytics platforms, allowing developers to build interoperable solutions faster than with legacy HL7 v2 or CCD formats.
For example, Epic notes that it is “a strong supporter” of FHIR as the future of REST-based interoperability: any health system using Epic can connect with any app that speaks FHIR to exchange health information. In short, FHIR is the foundational data format that makes modern, API-driven integration possible.
What Is TEFCA?
The Trusted Exchange Framework and Common Agreement is a nationwide governance model for health data exchange. Mandated by the 2016 21st Century Cures Act, TEFCA defines common rules and a legal framework so that diverse health information networks can interconnect as a “network of networks”.
- In practical terms, TEFCA establishes standardized technical specifications and a binding “Common Agreement” that Qualified Health Information Networks must sign.
- This agreement includes common privacy/security rules and data sharing policies for purposes like treatment, quality, payment, and public health.
- The goal is to make data accessible “when and where it is needed” nationwide without health systems having to negotiate dozens of bilateral interfaces.
As one summary notes, TEFCA’s Common Agreement creates “the same ‘rules of the road’ when engaging in data exchange through a TEFCA-enabled network”.
- In its latest version (v2.0), TEFCA explicitly builds in FHIR-based exchange, so that participating networks and providers will use modern APIs to share records.
- Over time, TEFCA aims to connect thousands of hospitals, clinics, payers, and public health agencies under a common trust framework.
What Is UDS+?
The Uniform Data System Plus is HRSA’s new FHIR-based reporting framework for federally funded community health centers. By contrast, UDS has long referred to the aggregate annual report these centers submit on patient volumes and services.
Starting with 2024 data, HRSA plans to collect de-identified patient-level data via FHIR APIs under UDS+. Health centers will use a published UDS+ FHIR Implementation Guide to submit this detailed information to HRSA.
In effect, UDS+ leverages FHIR R4 to modernize public health reporting. The UDS Manual explains that FHIR R4 “is designed to enable health data, including clinical and administrative data, to be quickly and efficiently exchanged,” which makes it ideal for the bulk uploads that UDS+ requires.
By aligning UDS reporting with ONC and CMS standards, HRSA intends to reduce paperwork and improve data quality. While UDS+ is specific to HRSA health centers, it exemplifies the broader trend of government programs moving toward FHIR for more granular, patient-centered data collection.
Related: UDS and UDS Plus: The Ultimate Guide to Healthcare Compliance and Data Reporting
Why These Initiatives Matter for Large Health Systems
For enterprise health systems, FHIR, TEFCA, and UDS+ are not abstract concepts – they’re turning into real business and clinical imperatives. Key drivers include:
1. Regulatory Mandates
Federal laws and rules now require API-based data sharing. The 21st Century Cures Act and ONC’s final interoperability rule mandate that certified EHRs support standardized FHIR APIs for patient data access.
Likewise, CMS’s Interoperability and Patient Access rule requires payers and providers to exchange data via FHIR-based APIs. Large health systems must comply or face penalties and lose incentive payments. TEFCA itself was mandated by Congress as part of the Cures Act, so health systems need to be ready for its launch and reporting requirements.
2. Scalability and Efficiency
Without a common framework, large systems risk an explosion of point-to-point interfaces. As TEFCA notes, joining numerous local HIEs or building custom connections is inefficient. TEFCA “decreases costs and improves efficiency by reducing or eliminating the need to join multiple HINs and multiple legal agreements”.
FHIR likewise simplifies integration by providing one API standard instead of custom formats. In short, a unified approach is the only sustainable way for a big system to share data with many partners.
3. Data-Driven Care
Enterprise systems manage millions of records. Patients often receive care at multiple facilities or from outside partners. To deliver coordinated, high-quality care, providers need timely access to comprehensive records. FHIR’s real-time APIs can deliver query results on demand, and TEFCA’s network lets systems find and pull records nationwide. This is essential for population health and value-based care, which rely on aggregating and analyzing data across the continuum.
As one industry expert observes, hospitals are under “increasing pressure to modernize, improve patient care, and meet strict regulatory requirements” – and fragmented EHR integration has been a huge roadblock. SMART on FHIR and related tech are “beginning to change this landscape,” enabling data to flow more freely.
4. Patient Engagement and Access
Patients increasingly demand access to their data through apps. Using FHIR and TEFCA, systems can connect patients’ apps to their centralized records. For example, the TEFCA FHIR roadmap explicitly highlights that patients will soon be able to connect apps and services to get a holistic view of their medical history from any provider on the network.
Meeting these expectations is not only mandated by law, but it also improves consumer satisfaction and can reduce duplicate testing and errors.
5. Competitive & Strategic Advantage
Finally, leading systems recognize that interoperability is becoming table stakes. Joining national frameworks like TEFCA and adopting FHIR puts a health system ahead of competitors still siloed. It opens up opportunities for collaboration with research organizations, public health agencies, and tech innovators.
Long-standing HIEs like Carequality report they connect 4,200+ hospitals and 600,000+ providers, exchanging nearly a billion documents a month. By aligning with these trends, large systems position themselves at the forefront of healthcare’s digital future.
How Enterprises Are Preparing
Large health systems are treating FHIR and TEFCA compliance as enterprise-wide programs, not just IT projects. Key actions include:
1. EHR Modernization
Many organizations are upgrading to the latest EHR versions (Epic, Cerner, etc.) that include built-in FHIR support. They enable and test the certified FHIR endpoints and Bulk Data APIs for analytics.
- Some are also deploying integration engines (Mirth, Rhapsody, Cloverleaf, etc.) that act as FHIR intermediaries.
- By standardizing on FHIR, hospitals can streamline connections to internal and external systems.
For example, Epic’s own “FHIR on FHIR” initiative and participation in projects like Da Vinci and Argonaut ensure any Epic customer can interoperate via FHIR.
Related: The 2025 Blueprint for Modernizing Healthcare IT Infrastructure
2. Data Governance and Identity
With vast data comes responsibility. Enterprises are bolstering data governance programs to ensure patient records are clean, de-duplicated, and meet privacy standards.
Master Patient Index and record-matching initiatives are critical so that when a TEFCA query returns results, the data truly belongs to the patient in question.
- Dedicated governance teams oversee US Core Data for Interoperability elements to guarantee consistent data definitions.
- Many organizations have also created directories of their own FHIR endpoints and are preparing to register them in TEFCA’s future directory service.
3. API Management & Security
CIOs are building API layers to securely manage FHIR traffic. This often involves deploying API gateways with OAuth 2.0 and OpenID Connect. Notably, industry groups are developing security profiles tailored for TEFCA. The HL7 FHIR At Scale task force, for example, is teaching CISOs and developers about the “FAST Security” IG that will be required by TEFCA’s launch.
A recent HL7 blog emphasized the Jan 2026 deadline for “FAST Security” to be implemented for all TEFCA FHIR exchanges. Large systems are taking note – they are incorporating these OAuth-based security frameworks into their FHIR services now.
4. Vendor and Partner Collaboration
Enterprises are working closely with EHR vendors, HIEs, and health information exchanges. Many are ensuring their chosen HIE partners become Qualified HINs under TEFCA.
- Designated QHINs include CommonWell, eHealth Exchange, Epic, Cerner, and others – all of which are preparing FHIR-enabled connections.
- Hospitals are also joining networks like Carequality or CommonWell to be part of larger exchange communities.
- On the federal side, some systems coordinate with HRSA (for UDS/UDS+) if they operate community clinics.
5. Pilot Projects and Training
Many systems run pilot FHIR projects to build internal expertise. This includes developing proof-of-concept SMART-on-FHIR apps, using FHIR bulk queries for population health analytics, or simulating a TEFCA exchange.
IT teams attend HL7 Connectathons and ONC webinars to stay current. Clinician champions are engaged early, often embedding demand for interoperability into clinical workflow improvements (e.g., single-click referrals or discharge summaries via FHIR).
Taken together, these steps – upgrades, data cleansing, API deployment, and partnerships – form a broad compliance strategy well underway at most large health systems.
Challenges and How They’re Overcoming Them
Adopting FHIR and TEFCA isn’t without obstacles. Enterprise systems report several common challenges and corresponding solutions:
1. Legacy Systems and Data Gaps
Decades-old interfaces and non-standard data keep getting in the way. Health systems often find their database fields don’t line up neatly with FHIR profiles.
Solution: Phased integration projects and middleware help. For example, some organizations map old HL7 v2 feeds into FHIR resources using translation layers. Others modernize department-specific systems (labs, imaging, pharmacies) to expose FHIR APIs. Over time, this gradually replaces brittle point-to-point interfaces.
2. Complex Governance and Compliance
Understanding TEFCA’s rules (and state privacy laws) is complex.
Solution: Many systems have formed cross-disciplinary compliance teams (IT, legal, privacy officers) dedicated to interoperability. These teams track TEFCA communications, test compliance checklists, and update contracts. They also coordinate with vendors to ensure that any system connecting to TEFCA meets the security and privacy requirements.
3. Security and Trust
Implementing robust identity-proofing and trust for data exchange is non-trivial. As ONC notes, “scaling use of FHIR has been challenging due to issues such as lack of a single directory… and mechanisms to verify who is asking for information”.
Solution: Health systems are planning to use federated identity services and to publish their FHIR endpoints in a directory (such as the future TEFCA Directory).
They’re also adopting the FAST UDAP framework (OAuth-based) and SOC 2-type security standards for any TEFCA participant, ensuring that requests come from authenticated, authorized sources. Some run internal pilot exchanges between hospitals first to validate their security processes before joining a public network.
4. Resource and Budget Constraints
Upgrading systems and hiring interoperability experts costs money.
Solution: Organizations often leverage phased implementations and seek grants or subsidies. Some work through consortia to share resources. Others prioritize “low-hanging fruit” use cases (like patient access APIs) to deliver immediate benefits. Over time, efficiency gains from reduced manual reporting and improved outcomes can help justify further investment.
5. Stakeholder Engagement
Clinicians, administrators, and IT may have differing priorities.
Solution: Successful programs articulate the clinical and financial value of interoperability. For instance, showing how FHIR-based notifications could prevent readmissions or how single sign-on to a FHIR app saves doctors’ time. Demonstrating patient satisfaction with app-driven health records also helps buy-in. Training and communication keep everyone aligned on the roadmap.
No single challenge is fatal, organizations are overcoming them through a combination of technology, process, and collaboration.
For example, adopting API management tools and standardized terminologies addresses data consistency, while federated directory services will address the “no single directory” problem. In short, big systems are tackling these hurdles one piece at a time, often by learning from early adopters and pooling expertise.
Related: 5 Challenges Associated with HL7 FHIR and How CapMinds Helps to Solve
Health Interoperability Solution from CapMinds
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