Low pay rates for ACCESS Model will pressure digital health margins

Low pay rates for Medicare's ACCESS Model will pressure digital health margins: Capstone

By Heather Landi  Feb 24, 2026 , Fierce Healthcare

Capstone noted that the ACCESS model program lends itself more to prevention-based activities for lower-risk populations.

The health tech industry cheered when Medicare announced a new 10-year payment model to encourage the use of technology to treat chronic diseases. But, the lower-than-expected reimbursement rates introduce the risk of negative profit margins for model participants, according to a new research note from strategy firm Capstone.

The model could represent a tailwind for scaled digital health companies like Omada Health and Hinge Health, though, the firm wrote. Provider referral incentives and outcome-based bonuses could drive beneficiary volume to offset margin pressure. 

The Center for Medicare and Medicaid Innovation announced the Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model in December to encourage the use of technology to treat chronic diseases, which many hoped would be a boon for health tech companies that have struggled with reimbursement. The demonstration will test the use of outcome-based payments for participating organizations in fee-for-service Medicare.

CMMI plans to use outcomes-aligned payments to cover the cost of technology for Medicare providers if a patient with a qualifying chronic condition achieves clinically significant results, like lowering their blood pressure. The model will kick off in early July and run through June 30, 2036.

The ACCESS model targets four clinical areas that collectively represent chronic conditions impacting more than two-thirds of Medicare beneficiaries.

The four categories are early cardio-kidney-metabolic conditions (eCKM) to include hypertension, dyslipidemia, obesity, overweight with markers of central obesity and prediabetes; cardio-kidney-metabolic conditions (CKM) to include diabetes, chronic kidney disease and atherosclerotic cardiovascular disease; musculoskeletal conditions (MSK) and behavioral health conditions such as depression and anxiety. 

But the payment rates (PDF) for the ACCESS model, unveiled earlier this month, were lower than the industry expected and fall below current billing models.

CMMI debuts ACCESS Model to spur use of tech in chronic disease treatment

Annual allowed amounts for the initial period, or the first year, are $360 for early cardio-kidney-metabolic, $420 for cardio-kidney-metabolic, $180 for musculoskeletal and $180 for behavioral health. Follow-on period rates, applicable when a beneficiary is continuing established care, are exactly half: $180 for eCKM, $210 for CKM and $90 for BH. MSK does not have a follow-on period. 

Many digital health experts have crunched the numbers and noted that it might not be worth the effort for high-touch, clinician-driven chronic care.

In a LinkedIn post, health tech attorney Carrie Nixon pointed out that current average fee-for-service reimbursement rates for care management of chronic conditions comes to $99.17 per month for remote physiologic monitoring. For chronic condition management, the rate is $66.47 per month for the first 20 minutes and $50.69 per month for additional 20 minutes.

"Why would medical practices give up $216.83 per chronic patient per month for what amounts to a $35/month payment?" Nixon wrote. "This seems like a 'set it and forget it' method of care management that doesn't take into account the need for any clinician interaction."

Capstone analysts also noted that the proposed ACCESS model rates would yield lower margins for participating organizations than the current billing model. Guaranteed ACCESS payments in the follow-on period for the eCKM clinical track are limited to $7.50 per member, per month. Participants earn the remainder if their digital health tools sufficiently improve the outcome-aligned measures outlined by CMS. If at least 50% of participating organizations’ aligned beneficiaries meet all required outcome-aligned measures for the first model year, the organization would earn the full payment amount. If fewer than 50% of patients meet their targets, the payment to the organization would be reduced proportionally.

Participating organizations are required to enroll in Medicare Part B and will receive patients either through direct sign-ups or clinician referrals. "The requirement to enroll as Part B providers creates compliance burdens and financial requirements for unscaled vendors, potentially excluding them from the model," Capstone healthcare analysts wrote.

But scaled digital health companies such as Omada and Hinge Health have the requisite infrastructure in place. 

Provider referral incentives and outcome-based bonuses could drive beneficiary volume to offset margin pressure, the healthcare analysts wrote. Companies that can manage patients under low profit margins and meet clinical improvement levels could subsequently benefit through higher patient volume and outcome-adjusted payments, according to Capstone.

"To justify participation in the model, digital health companies will depend on sufficient beneficiary volumes," Capstone analysts wrote. Digital health companies will rely on increased patient participation to grow revenues through higher volumes to offset reduced margins under the model.

Payers sign pledge to join CMMI ACCESS Model

"Although we believe the ACCESS model is an important opportunity for digital health companies, the net impact hinges on participant volume, beneficiary volume, and whether adoption of digital health tools indeed drives positive clinical outcomes," the Capstone analysts wrote. "Under the model, CMS will withhold 50% of each monthly payment until the end of a 12-month care period, when participants will be eligible for the remainder based on the achievement of specified clinical outcomes."

During Hinge Health's recent fourth-quarter earnings call, James Pursley, president of Hinge Health, told investors that the potential scale of traditional Medicare with roughly 30 million addressable lives represents "an attractive long-term opportunity" for the company.

However, Pursley's comments were made before CMS issued the ACCESS Model payment rates.

"The process is still evolving. Applications are coming in. Medicare CMS has not issued the price and structure yet of the offering. And so while rates have yet to be finalized, we would assume that if the pricing makes sense, we're going to participate. I wouldn't expect a meaningful contribution in the back half of '26. I think this would be more of a 2027 and beyond contribution," Pursley said.

Capstone also noted that the program lends itself more to prevention-based activities for lower-risk populations, rather than more involved rescue care for beneficiaries with multiple comorbidities. 

Digital health uptake in fee-for-service Medicare remains low, according to Capstone. The ACCESS model’s referral and care management incentives for primary care providers could accelerate adoption and expand the total addressable market, "driving a market where participating vendors trade near-term margin compression for greater scale," the analysts wrote.

Earlier this month, major health payers representing 165 million patients pledged to adopt an outcomes-based payment structured aligned to the ACCESS model, which expands the model to the Medicare Advantage, Medicaid and commercial markets.