Medicare is paying companies $30 a month per patient to manage conditions like hypertension, obesity and prediabetes. The only way to make that work is with AI.
CMS, the federal agency that runs Medicare, accepted more than 150 organizations into a new payment model called ACCESS launching this July. It covers chronic conditions including diabetes, hypertension, chronic pain and depression. Most of the accepted organizations have never served Medicare patients before, a sign that tech-forward health companies, not traditional providers, are the ones jumping in.
The payment rates, laid out in CMS's financial documents, are flat annual fees per patient based on condition:
- eCKM (hypertension, obesity, prediabetes): $360/year initially, $180 after that
- CKM (diabetes, chronic kidney disease, heart disease): $420 initial, $210 follow-on
- MSK (chronic pain): $180, no follow-on
- BH (depression, anxiety): $180 initial, $90 follow-on
CMS also withholds half the payment until organizations can prove their patients are actually getting healthier.
Traditional care, with nurses, case managers and follow-up calls, simply cannot operate at those margins. Neil Batlivala, CEO of AI care company Pair Team, told TechCrunch that the economics only work with a lean, AI-driven operation. Patrick Sheehan of Withings Health Solutions described it more simply: ACCESS is creating "a free Medicare app store, essentially, where you can access the program that fits you best."
Not everyone is convinced the rates are workable. Omada Health, a publicly traded digital health company, chose not to apply, arguing the rates aren't high enough to deliver quality care. Brandon Ballinger, co-founder of AI health startup Empirical Health, sees it differently: "I think we should just stop whining about the reimbursement rates and figure out how to deliver care more efficiently."
One of Pair Team's patients, a 67-year-old woman living out of her car, spent over an hour talking to Flora, the company's AI agent. "Flora was probably the only 'person' she'd talked to in weeks about her situation," Batlivala told TechCrunch.
Private insurers representing 165 million members have already committed to aligning with ACCESS's payment approach. If the model works in its initial Medicare run, the commercial insurance market could follow.
One quiet detail from the CMS blog post announcing the model: it was co-authored by the director of CMS's innovation center and CMS's Chief AI and Technology Officer. The fact that CMS even has a Chief AI and Technology Officer co-signing payment policy tells you where the federal government's head is at.
The tech industry talks a lot about AI disrupting healthcare. ACCESS is the federal government actually putting a price tag on it. CMS's innovation center has a roughly one-in-three historical success rate on these experiments, so the skepticism is earned. But 165 million private insurance members have already committed to following its lead. If the model delivers, $30 a month becomes the benchmark for chronic disease management, and that's a number that favors startups with AI agents over health systems with headcount.
