Medicare and AI: ACCESS Revolutionizes the Healthcare Payment Model

Pair Team and Medicare Innovation

Neil Batlivala, after seven years of hard work, has successfully positioned his company, Pair Team, at the heart of a revolutionary initiative in healthcare. On April 30, Pair Team was selected to participate in ACCESS, an innovative Medicare program. This program, which will begin on July 5, aims to explore how artificial intelligence can transform medical care at the federal level, a major advancement for an industry often perceived as rigid and traditional.

Batlivala's company, although relatively unknown in the tech sector, focuses on a patient population often overlooked by Silicon Valley. Pair Team was founded with the idea that to improve health outcomes, it is essential to consider the full range of patients' living conditions. The company specifically targets those suffering from chronic illnesses while facing social challenges such as housing instability or food insecurity. Approximately one-third of Americans find themselves in this situation.

ACCESS: An Innovative Payment Model

ACCESS, which stands for Advancing Chronic Care with Effective, Scalable Solutions, is a 10-year program established by the Centers for Medicare & Medicaid Services (CMS). This program tests a payment model that rewards health outcomes rather than traditional medical activities. Participating organizations, like Pair Team, receive predictable payments for managing eligible conditions such as diabetes, hypertension, chronic kidney disease, obesity, depression, and anxiety. However, they only receive the full amount if patients achieve measurable health goals, such as lower blood pressure or reduced pain.

This new payment structure marks a break from the traditional Medicare model, which reimburses care based on time spent with a clinician. Until now, there has been no mechanism to compensate an AI agent that monitors a patient between visits, makes follow-up calls, coordinates a housing referral, or ensures that someone picks up their medications. ACCESS creates this mechanism for the first time, paving the way for a transformation of the payment model in the healthcare sector.

A Diversity of Participants and Doubts

The first cohort of ACCESS includes a wide range of participants, from startups specializing in medical AI to providers of virtual nutritional therapy, as well as connected device companies and wearable manufacturers like Whoop. However, Batlivala expresses doubts about the effectiveness of some of these participants. He is skeptical about the impact that devices like those from Whoop could have on seniors facing food insecurity.

Pair Team, on the other hand, was launched in 2019 with a specific type of patient in mind: individuals managing chronic conditions while facing unstable housing, food scarcity, or lack of transportation. The company now employs around 850 clinical professionals, managing what it describes as the largest community health workforce in California. According to Batlivala, Pair Team generates nine-figure revenues and has raised approximately $30 million, backed by investors such as Kleiner Perkins, Kraft Ventures, and Next Ventures.

Evidence of Effectiveness and Technological Innovations

Pair Team's model is supported by peer-reviewed evidence. A study co-authored by researchers from Pair Team and published in the Journal of General Internal Medicine evaluated Pair Team's community-integrated model, which blends medical, behavioral, and social care for Medicaid members with high rates of homelessness, severe mental illness, and chronic diseases. The results showed strong patient engagement and significant reductions in avoidable emergency room use and hospitalizations. Batlivala claims that one in four hospital visits and one in two emergency visits do not occur when the patient is under his company's care.

However, providing this level of care has long required human teams, which limited the speed and cost of scaling. Then, about nine months ago, Pair Team deployed an AI voice agent named Flora as its primary interface for patients. Flora is available 24/7, manages admissions, coordinates referrals, and conducts follow-ups that keep patients engaged between clinical visits.

A Shift in Perspective Through AI

The first call that changed Batlivala's perspective was with a 67-year-old woman living in her car, managing PTSD and congestive heart failure. She spoke with Flora for over an hour. "It was both amazing and depressing," Batlivala said. "Flora was probably the only 'person' she had talked to in weeks about her situation." Now, hour-long conversations with Flora have become common, and Batlivala emphasizes the importance of this companionship aspect, which proves to be a genuine intervention.

The Architects of ACCESS and Upcoming Challenges

The architects of ACCESS are themselves former startup operators. The program was designed by Abe Sutton, Director of the CMS Innovation Center, and Jacob Shiff, Director of AI and Technology at the CMS Innovation Center. Sutton was previously a venture capitalist at a health fund called Rubicon Founders, while Shiff is a former founder in the health sector. Both joined CMS under the Trump administration, and their startup backgrounds are reflected in the program's design: outcome-based payments, direct consumer enrollment, and a deliberate push for competition.

However, there are real risks associated with ACCESS. Participants feed extraordinarily sensitive patient data—intimate conversations about housing, illnesses, and mental health—into a federal infrastructure with a documented history of breaches, including exposed social security numbers. For the vulnerable populations that ACCESS is designed to serve, this is not an impractical concern.

There are also financial risks. The track record of CMS innovation programs is mixed. A 2023 analysis by the Congressional Budget Office revealed that the CMS Innovation Center increased federal spending by $5.4 billion during its first decade rather than producing the projected savings. CMS also pays less per patient per month than many participants had anticipated, meaning that the calculations only work for organizations that have fully automated most of their interactions with patients.

Batlivala's response to concerns about reimbursement is that it is a feature, not a bug. "If you want to build a model that truly incentivizes the use of AI, reimbursement rates need to be low," he said. "The economics only work if you run a lean, AI-focused operation."

Pair Team claims it currently has partnerships in place that give it access to about 500,000 potential patients, and it aims to reach one million in the next three years. Health investors have been closely monitoring this. Digital health funding reached its highest total for the first quarter since the pandemic this year, with AI companies capturing the majority. However, ACCESS has barely been mentioned outside of specialized health tech media.