Medicare’s New Payment Model Quietly Paves the Way for AI-Driven Care

The Centers for Medicare & Medicaid Services (CMS) has launched a 10-year program called ACCESS that fundamentally changes how the government pays for chronic disease management — and it is designed, for the first time, to make AI-driven care financially viable at federal scale. The program, which goes live July 5, shifts reimbursement from billable hours to measurable health outcomes, opening the door for technology companies to take on tasks previously handled only by human clinicians.

What ACCESS Changes

Traditional Medicare pays for time spent with a doctor. There is no mechanism to reimburse an AI agent that monitors a patient between visits, coordinates a housing referral, or ensures medication adherence. ACCESS creates that mechanism. Participating organizations receive predictable monthly payments for managing conditions like diabetes, hypertension, chronic kidney disease, obesity, depression, and anxiety — but they earn the full amount only when patients hit measurable goals such as lower blood pressure or reduced pain.

Neil Batlivala, CEO of Pair Team, one of 150 organizations selected for the first cohort, described the shift bluntly: “The government is creating swim lanes for AI innovation in traditionally regulated industries. The best solution wins, which in healthcare has not been the case.” Pair Team, a company most of Silicon Valley has never heard of, has spent seven years building a model that blends medical, behavioral, and social care for patients dealing with unstable housing, food insecurity, or lack of transportation — roughly a third of Americans.

Flora: The Voice AI That Changed Everything

About nine months ago, Pair Team deployed a voice AI agent named Flora as its primary patient-facing interface. Flora handles intake, coordinates referrals, and performs check-ins 24 hours a day. Batlivala recalled the first call that shifted his perspective: a 67-year-old woman living out of her car, managing PTSD and congestive heart failure, spoke with Flora for over an hour. “It was both incredible and depressing,” he said. “Flora was probably the only ‘person’ she’d talked to in weeks about her situation.” Now, hour-long conversations with Flora are routine. “That’s the companionship piece,” Batlivala added. “And it turns out that is truly an intervention.”

Pair Team now employs roughly 850 clinical professionals, runs what it describes as the largest community health workforce in California, and generates revenue above nine figures. A peer-reviewed study in the Journal of General Internal Medicine found that its model significantly reduced avoidable emergency and inpatient utilization. Batlivala says one in four hospital visits and one in two ER visits do not happen when a patient is in the company’s care.

Why This Matters for the Tech Industry

ACCESS was designed by former startup operators. Abe Sutton, Director of the CMS Innovation Center, was previously a venture capitalist at Rubicon Founders. Jacob Shiff, Chief AI and Technology Officer of the Innovation Center, is a former healthcare founder. Their startup backgrounds are reflected in the program’s design: outcome-based payments, direct-to-consumer enrollment, and a deliberate push for competition. The first cohort includes AI doctor startups, virtual nutrition therapy providers, connected device companies, and wearable makers like Whoop.

Batlivala is skeptical of some participants. “I’m a big fan of wearables, but for a senior who’s struggling with food insecurity, I don’t know how much Whoop is going to be able to do,” he said. His company’s focus on the social determinants of health — housing, food, transportation — is backed by evidence that those factors drive outcomes more than any single medical intervention.

The Risks Are Real

The program feeds extraordinarily sensitive patient data — intimate conversations about housing, disease, and mental illness — into a federal infrastructure with a documented history of breaches, including exposed Social Security numbers. For the vulnerable populations ACCESS is designed to serve, that is not an abstract concern. The track record of CMS innovation programs is also mixed. A 2023 Congressional Budget Office analysis found that the CMS Innovation Center increased federal spending by $5.4 billion during its first decade rather than producing projected savings.

CMS is paying less per patient per month than many participants anticipated, which means the math only works for organizations that have fully automated most of their patient interactions. Batlivala sees that as a feature, not a bug. “If you want to build a model that truly incentivizes the use of AI, the reimbursement rates have to be low,” he said. “The economics only work if you’re running a lean, AI-first operation.” Pair Team has partnerships in place giving it access to roughly 500,000 potential patients and aims to reach a million within three years.

Conclusion

ACCESS represents a quiet but significant shift in how the federal government approaches healthcare payment reform. By creating a financial structure that rewards outcomes over activities, CMS has effectively built a sandbox for AI companies to prove their value in managing chronic disease. Whether the program delivers on its promise — or repeats the cost overruns of previous CMS experiments — will depend on execution, data security, and the ability of participants like Pair Team to scale their models without losing the human touch that makes them effective.

FAQs

Q1: What is the Medicare ACCESS program?
ACCESS (Advancing Chronic Care with Effective, Scalable Solutions) is a 10-year CMS pilot program that pays organizations a fixed monthly fee for managing chronic conditions, with full payment tied to measurable health outcomes rather than billable hours.

Q2: How does Pair Team use AI in patient care?
Pair Team deployed a voice AI agent called Flora that handles intake, referrals, and 24/7 patient check-ins. Flora engages patients between clinical visits, addressing social needs like housing and food insecurity that directly affect health outcomes.

Q3: What are the risks of the ACCESS program?
Risks include potential data breaches of sensitive patient information, the possibility that CMS may not achieve cost savings (previous CMS innovation programs increased spending), and the challenge of making the economics work with lower-than-expected reimbursement rates.