Medicare's New AI-Driven Payment Model
Introduction to Medicare's New Payment Model
Medicare has introduced a new payment model, ACCESS, which rewards health outcomes rather than required activities. This model is built for AI innovation and has the potential to transform the healthcare industry.
What is ACCESS?
ACCESS, which stands for Advancing Chronic Care with Effective, Scalable Solutions, is a 10-year program testing a payment model that rewards health outcomes rather than required activities. Participating organizations like Pair Team receive predictable payments for managing qualifying conditions and earn the full amount only when patients meet measurable health goals, such as lower blood pressure or reduced pain.
How Does it Work?
The payment structure is the real news. Traditional Medicare reimburses based on time spent with a clinician. There's no mechanism to pay for an AI agent that monitors a patient between visits, calls to check in, coordinates a housing referral, or makes sure someone picks up their medication. ACCESS creates that mechanism for the first time.
The First Cohort
The first cohort spans a wide range of participants — AI doctor startups, virtual nutrition therapy providers, connected device companies, and wearable makers like Whoop. Pair Team's founder, Neil Batlivala, is skeptical of some of them, stating that for a senior who's struggling with food insecurity, wearables like Whoop may not be of much help.
Pair Team's Approach
Pair Team launched in 2019 with a specific kind of patient in mind: people managing chronic conditions who were also dealing with unstable housing, too little food, or lack of transportation. The company's premise was that you can't improve health outcomes without addressing the full context of someone's life. It now employs roughly 850 clinical professionals, runs what it describes as the largest community health workforce in California, and generates revenue above nine figures.
The Role of AI
About nine months ago, Pair Team deployed a voice AI agent called Flora as its primary patient-facing interface. Flora is available 24 hours a day, handles intake, coordinates referrals, and does the check-ins that keep patients engaged between clinical visits. The results have been impressive, with hour-long conversations with Flora becoming routine and showing that companionship can be a valuable intervention.
Risks and Challenges
There are real risks associated with the ACCESS program, including the risk of data breaches and financial risks. Participants are feeding extraordinarily sensitive patient data into a federal infrastructure with a documented history of breaches. The track record of CMS innovation programs is also mixed, with a 2023 Congressional Budget Office analysis finding that the CMS Innovation Center increased federal spending by $5.4 billion during its first decade rather than producing the projected savings.
Conclusion
Medicare's new payment model has the potential to transform the healthcare industry by incentivizing the use of AI and rewarding health outcomes rather than required activities. While there are risks and challenges associated with the program, the potential benefits make it an exciting development in the field of healthcare technology.