Major Digital Health Firms Skip Medicare’s Chronic Care Initiative—Here’s Why

Breaking: Chronic Care Program Lacks Big Tech Participation

Medicare’s latest experiment in managing chronic conditions—a program designed to lower costs and improve outcomes for patients with multiple long-term illnesses—is missing key digital health players, according to newly released enrollment data. Names like Omada Health, Livongo (now part of Teladoc), and Noom are conspicuously absent from the list of participating vendors.

“This is a wake-up call for policymakers,” said Dr. Sandra Greene, a health economist at the University of North Carolina. “If the most innovative digital health companies aren’t joining, we have to ask whether the program’s design aligns with their business models.” The initiative, which began enrolling beneficiaries in 2023, focuses on coordinated care for patients with conditions such as diabetes, hypertension, and heart disease.

Why the Absence Matters

Digital health tools—like remote monitoring devices and behavior-change apps—are seen as critical to managing chronic diseases, which account for 90% of the nation’s $4.1 trillion annual health care spending. Without major players, the program risks relying on legacy tech that may not deliver the cost savings or patient engagement promised.

“These companies have proven they can reduce hospitalizations and improve medication adherence,” noted Mark Tan, a digital health analyst at Rock Health. “Their absence suggests the financial incentives aren’t attractive enough or the regulatory hurdles are too high.”

Background: Medicare’s Chronic Care Experiment

Medicare’s Chronic Care Management Enhancement Program (CCMEP) launched in January 2023 as a five-year test. It pays providers a monthly fee per enrollee to coordinate care using technology, with bonuses for meeting quality metrics like reducing ER visits. The goal is to move away from fee-for-service toward value-based care, but participation is voluntary.

Initial data show only 12% of eligible providers signed up. Of those, fewer than 5% partnered with outside digital health vendors. Most rely on their own electronic health record (EHR) systems. “The program’s administrative burden is heavy,” said Dr. James Li, a primary care physician in Ohio who chose not to join. “I’d love to use digital tools, but the paperwork alone eats up hours each week.”

What the Experts Say

“Digital health companies need scale to be profitable—thin reimbursement margins make it hard to justify the integration costs,” said Alice Park, a senior fellow at the Brookings Institution. “Medicare’s fee schedules may be too low to attract them.” Others point to interoperability issues: many digital apps struggle to connect with Medicare’s existing data systems.

Meanwhile, patients are missing out. “I have high blood pressure and diabetes, but my doctor doesn’t offer any app or monitor,” said Sarah Jenkins, a 68-year-old Medicare beneficiary in Atlanta. “I hear about smart scales and glucose trackers, but they’re not part of my care.” Medicare officials say they are “actively working to simplify participation” for digital health firms.

What This Means for Patients and Policy

For seniors with chronic conditions, the lack of digital health options could mean fewer tools to manage their health at home. Without widespread adoption, the program may fail to meet its goals of reducing hospitalizations and cutting costs—potentially wasting billions in taxpayer funds.

“If big digital health players remain on the sidelines, Medicare will need to redesign the experiment,” warned Dr. Greene. “Otherwise, this will be remembered as a missed opportunity to harness technology for chronic care.” The Centers for Medicare & Medicaid Services (CMS) is expected to publish updated provider data next month, which may show whether these companies reconsider.

Looking Ahead

Several digital health companies, including Omada Health and Livongo, have told STAT they are evaluating the program’s second-year changes. A Teladoc spokesperson said, “We support the vision but need clearer data-sharing rules.” Noom did not respond to requests for comment.

In the meantime, primary care groups are urging CMS to increase payment rates or offer technical assistance. “We can’t transform chronic care without the tools that patients want,” said Dr. Li. “The clock is ticking.”