Medicare’s new payment model reimburses AI-driven chronic care

The Centers for Medicare & Medicaid Services is preparing to launch a decade-long experiment that could fundamentally alter how the federal government pays for chronic disease management, creating for the first time a direct reimbursement mechanism for artificial intelligence-driven care. The program, called ACCESS, represents one of the most significant structural changes to Medicare's payment architecture in years, and it arrives with a cohort of 150 participants that includes AI startups, connected device manufacturers, and wearable companies — all competing to prove that technology can replace expensive, time-based clinical labor with outcomes-based, automated patient management. The initiative goes live on July 5. For Neil Batlivala, the founder of a relatively unknown healthcare company called Pair Team, ACCESS validates a bet he placed seven years ago on a patient population that most of Silicon Valley has systematically overlooked: low-income seniors managing multiple chronic conditions while simultaneously struggling with housing instability, food insecurity, or lack of transportation. Pair Team was accepted into the program on April 30, and Batlivala sees the moment as a watershed. The government, he argues, is deliberately creating room for artificial intelligence to compete in a sector that has long been insulated from technological disruption by regulation and arcane billing codes. ACCESS — which stands for Advancing Chronic Care with Effective, Scalable Solutions — is not merely a new pilot project. It is a payment model transformation that discards the traditional fee-for-service logic that has governed Medicare reimbursements for decades. Under conventional Medicare, a provider gets paid based on the time spent face-to-face with a patient. There is no billing code for an AI agent that monitors a patient between clinical visits, calls to check on medication adherence, coordinates a referral to a housing assistance program, or simply talks to someone who is lonely and isolated. ACCESS changes that. Participating organizations receive predictable monthly payments for managing qualifying chronic conditions — diabetes, hypertension, chronic kidney disease, obesity, depression, and anxiety — but they earn the full amount only when patients hit measurable health targets such as lower blood pressure, reduced pain levels, or improved glycemic control. The payment structure rewards outcomes, not activities. That distinction, Batlivala says, makes all the difference. You simply could not do this before, he explained over a video call shortly after the announcement. The government is creating swim lanes for AI innovation in industries that have been heavily regulated and resistant to change, and the best solution wins — which has not historically been the case in healthcare. Pair Team launched in 2019 with a specific mission: improve health outcomes for people managing chronic conditions while also dealing with the social determinants of health that clinical medicine alone cannot fix. Roughly one-third of Americans fall into this category at some point in their lives, struggling with unstable housing, insufficient food, or lack of reliable transportation. The company's premise is straightforward — you cannot improve health outcomes without addressing the full context of a person's life — and it has built an organization around that idea. Pair Team now employs approximately 850 clinical professionals, operates what it describes as the largest community health workforce in California, and generates revenue above nine figures, according to Batlivala. The company has raised about $30 million from investors including Kleiner Perkins, Kraft Ventures, and Next Ventures. The model has accumulated peer-reviewed evidence. A study co-authored by Pair Team researchers and published in the Journal of General Internal Medicine evaluated the company's community-integrated approach, which blends medical care, behavioral health support, and social services for Medicaid members with high rates of homelessness, serious mental illness, and chronic disease. The results showed strong patient engagement and significant reductions in avoidable emergency department visits and inpatient hospitalizations. Batlivala estimates that one in four hospital admissions and one in two emergency room visits are prevented when a patient is under Pair Team's care. For years, however, delivering that level of care at scale required large human teams. That constraint limited how quickly the model could grow and how cost-effective it could become. About nine months ago, Pair Team deployed a voice AI agent named Flora as its primary patient-facing interface. Flora is available 24 hours a day, seven days a week. She handles intake, coordinates referrals, performs routine check-ins, and keeps patients engaged between clinical visits. The call that fundamentally shifted Batlivala's thinking about AI came from a 67-year-old woman living out of her car while managing PTSD and congestive heart failure. She spoke with Flora for more than an hour. Batlivala described the experience as both incredible and depressing — Flora was probably the only person she had talked to in weeks about her situation. Hour-long conversations with Flora have since become routine for many patients. Batlivala now views that companionship as a genuine medical intervention in its own right. The architects of ACCESS bring backgrounds that are unusual for federal health program designers. Abe Sutton, Director of the CMS Innovation Center, previously worked as a venture capitalist at Rubicon Founders, a healthcare-focused fund. Jacob Shiff, the center's Chief AI and Technology Officer, is a former healthcare founder. Both joined CMS under the Trump administration, and their startup experience is evident in the program's structure: outcome-based payments, direct-to-consumer enrollment, and an explicit emphasis on competition among participants. The first cohort includes a wide array of organizations — AI doctor startups, virtual nutrition therapy providers, connected device companies, and wearable makers such as Whoop. Batlivala is openly skeptical about some of his fellow participants. He says he is a fan of wearables in general, but he questions how much a device like Whoop can meaningfully help a senior who is struggling with food insecurity. The conditions that drive health outcomes for the populations ACCESS is designed to serve are often social and economic, not technological. Pair Team has been building toward this specific opportunity for more than five years. Despite the promise of the program, there are significant risks. Participants are feeding extraordinarily sensitive patient data — intimate conversations about housing, disease, and mental illness — into a federal infrastructure that has a documented history of security breaches. CMS has previously exposed Social Security numbers through its provider directory, and for the vulnerable populations that ACCESS aims to serve, that is not an abstract concern. The financial risks are equally real. The track record of CMS innovation programs is mixed at best. A 2023 analysis from the Congressional Budget Office found that the CMS Innovation Center actually increased federal spending by $5.4 billion during its first decade, rather than producing the savings that were projected when the center was created. CMS is also paying less per patient per month than many participants initially anticipated, which means the economic math only works for organizations that have fully automated most of their patient interactions. Batlivala sees the lower reimbursement rate not as a bug but as a feature. If the goal is to incentivize the use of AI, he argues, the reimbursement rates have to be low enough that the economics only work for companies running lean, AI-first operations. The model is designed to favor efficiency from the outset. Pair Team currently has partnerships in place that give it access to roughly 500,000 potential patients, and the company aims to reach one million within three years. Healthcare investors have been watching these developments closely. Digital health funding hit its highest first-quarter total since the pandemic this year, with AI companies capturing the majority of investment dollars. ACCESS itself has barely registered outside health tech trade publications, but that is likely to change as the program launches and early results begin emerging. The program represents a genuine structural shift in how Medicare thinks about paying for care, moving away from rewarding volume and toward rewarding value — and explicitly creating room for artificial intelligence to play a central role in that transition. Whether the experiment succeeds or fails will depend on whether the participating organizations can deliver measurable improvements in health outcomes while managing the privacy and financial risks inherent in the model. Pair Team, with its focus on the most complex and underserved patients, may be one of the more instructive cases to watch. Batlivala and his company have spent years operating outside the spotlight of the tech industry, serving a population that most startups ignore. ACCESS has now placed them at the center of a national experiment that could reshape how Medicare approaches chronic care for decades to come. The program launches in July, and the results will be closely watched by policymakers, investors, and the healthcare industry at large.