Medicare’s New Payment Model Puts AI at the Forefront in Healthcare

Imagine a future where your healthcare is managed by an AI agent, available around the clock to check in on you and ensure you're following treatment plans. That's exactly what Neil Batlivala has been working towards with his company Pair Team. After seven years of building a unique healthcare solution that most tech giants have overlooked, Batlivala’s work is now at the center of something much bigger.

On April 30, Pair Team was accepted into ACCESS, a Medicare program designed to test AI-driven medical care on a federal scale. As one of only 150 participants chosen by the Centers for Medicare & Medicaid Services (CMS), Pair Team is part of an exciting new payment model that rewards health outcomes rather than required activities.

ACCESS stands for Advancing Chronic Care with Effective, Scalable Solutions and goes live on July 5. It’s a 10-year program that aims to transform traditional Medicare reimbursement models by focusing on patient outcomes instead of time-based services. Participating organizations like Pair Team receive predictable payments for managing qualifying conditions and earn the full amount only when patients meet measurable health goals.

The program covers diabetes, hypertension, chronic kidney disease, obesity, depression, and anxiety. This payment structure is groundbreaking because 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 or coordinates housing referrals. ACCESS creates this mechanism for the first time.

The first cohort of participants spans a wide range, including AI doctor startups, virtual nutrition therapy providers, connected device companies, and wearable makers like Whoop. Batlivala is skeptical of some of these participants, especially those that may not be as relevant to his target demographic. “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.

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. About a third of Americans fall into this category. The company's premise was that you can't improve health outcomes without addressing the full context of someone's life.

Pair Team now employs roughly 850 clinical professionals and runs what it describes as the largest community health workforce in California. It generates revenue above nine figures and has raised about $30 million, backed by Kleiner Perkins, Kraft Ventures, and Next Ventures. The model has peer-reviewed evidence behind it, with a study showing strong patient engagement and significant reductions in avoidable emergency and inpatient utilization.

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 first call that shifted Batlivala's thinking was with a 67-year-old woman living out of her car, managing PTSD and congestive heart failure. She 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.”

The architects of ACCESS are themselves former startup operators, reflecting their startup backgrounds in the program's design: outcome-based payments, direct-to-consumer enrollment, and a deliberate push for competition.

There are real risks. Participants are feeding extraordinarily sensitive patient data 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's not an impractical concern. There are financial risks too. The track record of CMS innovation programs is mixed, and Pair Team’s reimbursement concerns are addressed by Batlivala himself: “If you want to build a model that truly incentivizes the use of AI, the reimbursement rates have to be low.”

Pair Team has partnerships in place that give it access to roughly 500,000 potential patients and aims to reach one million within three years. Healthcare investors have been watching this closely, with digital health funding hitting its highest Q1 total since the pandemic, with AI companies capturing the bulk of it.