TL;DR
Medicare’s ACCESS program has begun testing a new payment model that incentivizes health outcomes over activities, allowing AI tools to be reimbursed for patient care. This marks a significant shift in healthcare funding and AI adoption, though many in tech remain unaware.
Medicare’s new pilot program, ACCESS, began on July 5, 2024, introducing a payment system that rewards health outcomes rather than traditional activities, enabling AI tools to be reimbursed for patient management for the first time at a federal level.
The ACCESS program, managed by the Centers for Medicare & Medicaid Services (CMS), selected 150 organizations—including startups, virtual care providers, and device companies—to test a decade-long model focused on outcome-based payments. Unlike traditional Medicare, which reimburses based on time spent with clinicians, ACCESS creates mechanisms to pay for AI-driven monitoring, check-ins, and care coordination, provided patients meet specific health goals such as blood pressure reduction or pain management.
Neil Batlivala, CEO of Pair Team, a participant in the program, explained that this represents a ‘payment model transformation,’ making AI-enabled care financially viable at scale. Pair Team, which serves chronically ill and socially vulnerable populations, has developed a community-integrated model combining medical, behavioral, and social care, supported by a voice AI agent named Flora that handles patient engagement 24/7. The company has raised approximately $30 million and employs around 850 professionals.
Why It Matters
This development could fundamentally change healthcare reimbursement, allowing AI tools to be integrated into standard care pathways and potentially reducing hospital visits and emergency care for high-risk populations. For the tech industry, it signals a rare opportunity to participate in federally funded healthcare innovation, though many remain unaware of this shift. For patients, especially vulnerable groups, it offers new avenues for continuous, personalized support, but raises concerns about data security and the sustainability of outcome-based payment models.
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Background
The CMS Innovation Center has historically experimented with new payment models, but many have fallen short of cost savings, with a 2023 Congressional Budget Office report noting a $5.4 billion increase in federal spending over a decade. The ACCESS program, designed by former startup founders within CMS, aims to push outcome-based reimbursement further, specifically incentivizing AI and digital health tools. Pair Team’s prior success with community health and evidence of reduced hospital utilization underpin its participation in this pilot.
Neil Batlivala’s company has been building its model since 2019, focusing on populations with complex social needs, and has deployed AI tools like Flora to extend care beyond traditional visits. The program’s design reflects a deliberate effort to foster competition and innovation in healthcare delivery, with outcome metrics at its core.
“The government is creating swim lanes for AI innovation in traditionally regulated industries. The best solution wins, which, in regulated industries like healthcare — that’s not been the case.”
— Neil Batlivala
“The program is designed to test whether outcome-based payments can accelerate innovation and improve care for high-risk populations.”
— Abe Sutton, CMS Innovation Center director
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What Remains Unclear
It remains unclear how widely this payment model will be adopted beyond the initial cohort or how sustainable the outcome-based payments will be long-term. Data security concerns and the actual impact on healthcare costs and quality are still under evaluation, with many details about implementation and scalability still emerging.
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What’s Next
Over the coming months, CMS will monitor participant outcomes, data security, and cost-effectiveness. The first results from the pilot are expected within the next year, which could influence wider adoption of outcome-based AI reimbursement models in Medicare and possibly other payers.
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Key Questions
How does the new Medicare payment model differ from traditional reimbursement?
It rewards health outcomes rather than activities, enabling AI tools to be reimbursed for patient monitoring, engagement, and care coordination based on measurable health improvements.
Why is this development significant for AI in healthcare?
It creates a federally supported financial pathway for AI-enabled care, potentially accelerating adoption and innovation in digital health tools at scale.
What are the risks associated with this new model?
Data security is a concern due to sensitive patient information being integrated into federal infrastructure. There are also questions about the long-term sustainability and actual cost savings of outcome-based payments.
Who is participating in this pilot program?
Participants include AI startups, virtual care providers, connected device companies, and community health organizations, with a focus on high-risk, socially vulnerable populations.
