How AI & CMS are Solving the $4 Trillion Healthcare Crisis

For decades, the American healthcare story has been a tragedy of misaligned incentives. We have operated under a fee-for-service model that essentially functions as sick care — billing based on the volume of visits rather than on patient quality of life. As chronic conditions skyrocketed and the physician shortage became a crisis, the system really started breaking.

Then, the unexpected happened: The government became the disruptor.

The Medicare ACCESS unlock

As a cofounder in AI healthtech, I have been staring at the intersection of AI and the incredibly limited ways to pay for it in healthcare. With safe, compliant conversational AI and health sensors connected to a mobile app, it is possible for a digital health coach to chat with millions of individuals 24/7 on their phone and support them in their health journey as they manage chronic conditions. However, in a fee-for-service world, reimbursement only happens if a doctor or nurse spends minutes on a screen or in a room.  A framework for large-scale value-based care reimbursement, so innovative companies that focus on outcomes but use alternative, scalable methods could have a fighting chance.

That dream became a reality in December 2025, when Dr. Oz launched the CMS ACCESS Model, which goes into effect later this year. 

For the first time, the country’s largest payer is offering value-based care through Outcome-Aligned Payments. They aren’t asking how many minutes a doctor spent on the screen; they are asking: Is the patient’s A1c controlled? Is their blood pressure down?

Such an alignment between technology and reimbursement was previously unheard of. Medicare created a regulatory framework at precisely the point in history where a systemic infrastructure shift was needed to unlock the benefits of AI-driven healthcare for society. This framework will usher in a new era of AI-driven care and change the way healthcare is delivered as we know it.

The profitability squeeze

When the list of approved Medicare ACCESS providers came out a few weeks ago, I was not surprised to see so few traditional health systems. I was, however, surprised that many of the largest digital health companies were absent.

While Medicare ACCESS opens a market for 35 million lives, the reimbursement rates are conservative. Research highlights a stark pricing differential: commercial payers often pay up to 300% of Medicare rates for the same clinical activities. Since ACCESS only pays for clinical outcomes, there is an even bigger financial risk of achieving profitability.  

Medicare, with its buying power, can command the highest value at the lowest cost. But the reality is, for companies relying on heavy human clinician and coaching infrastructure, the math simply doesn’t work and the opportunity cost is too high. 

On the other hand, organizations that have been at the forefront of leveraging AI and tech to deliver patient-focused healthcare are well-positioned under the ACCESS model because their cost to serve doesn’t scale linearly with patient count. Leveraging AI responsibly enables infinite scaling while maintaining leading health outcomes, allowing innovative healthtech companies to sustainably operate within the lower Medicare reimbursement ranges. 

Why safe and compliant AI is the only path forward

Medicare ACCESS is going to put aggressive cost compression on the whole healthcare system. This will force innovation. To manage 69 million Medicare lives at such a low cost, it will be hard to treat patients profitably by adding more patients to our already burnt out providers’ schedule or adding more call centers. As an industry, we will need more AI and technology to achieve new unprecedented levels of efficiency and efficacy. 

But as the floodgates open, we will see a crop of new AI organizations attempting to manage health using unvetted models. Hallucinations and patient data privacy issues will abound if regulators are not paying attention. This is where the safety and quality of AI for patient care will need to be carefully audited and regulated.

In the next few years, we will see this race unfold. The winners will have deployed AI that is safe, compliant, and evidence-based to serve members compassionately without the risks of hallucinations, that can escalate at the right moments to live clinical decision making. This will take shape in a race to publish peer-reviewed clinical studies on AI, pass rigorous AI audits from national PBMs & health plans, being granted AI patents, and receiving emerging regulatory certifications. More and more patient support will fall to the AI ‘s purview as tech leaders prove we can get more efficient and scalable while being clinically safe. 

Promising momentum

For now, the regulatory momentum seems unstoppable. The Medicare ACCESS Payer Pledge has already seen other payers representing 165 million lives commit to Medicare ACCESS’s outcomes-based billing code infrastructure by 2028. That means more than 200 million Americans will be participating in highly efficient value-based care within the next 2 years.  

The message to the industry is clear: If your business model is optimized only for FFS, you are the legacy. The future of healthcare belongs to those who can trade hours spent for improved patient lives.

The era of AI-powered patient care has arrived. And for the first time, the incentives are finally on the patient’s side.

Photo: gustavofrazao, Getty Images

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