The RCM Trap: Why Cityblock Health is Pivoting AI Investment Toward Medicaid Care

What You Should Know

The Manifesto: Dr. Toyin Ajayi, CEO of Cityblock Health, has published a comprehensive report, “Medicaid + AI: A New Standard for Innovation,” arguing that the nation’s most vulnerable patient population must be the proving ground for generative AI.The Investment Disconnect: Currently, roughly 60% of healthcare AI investment is directed toward revenue cycle management, billing optimization, and risk adjustment. Conversely, less than 20% of health plans use AI to develop care plans or drive member engagement.The Agentic Front Door: Cityblock is deploying “agentic AI” to handle Medicaid patient outreach. These voice and messaging agents interact with members naturally, detecting critical Social Determinants of Health (SDOH) needs—like housing or food instability—and seamlessly routing summaries to human outreach specialists.Ambient Clinical Support: The company is utilizing AI ambient scribes that not only draft clinical notes but can natively translate real-time Spanish patient encounters into English documentation, drastically reducing administrative burden for providers.The Six Principles: Cityblock outlined six core principles for Medicaid AI deployment: Equity First; Solve Pressing Problems; Trust Before Data; AI as a Relationship Engine; Behavior Change as the Goal; and using AI to achieve “Scalable Compassion.”

Why Cityblock Health is Pivoting AI Investment Toward Medicaid Care

According to a newly released report from Cityblock Health, roughly 60% of all healthcare AI investment is currently being poured into revenue cycle management, billing optimization, and risk adjustment. Less than 20% of health plans are using the technology to actually develop care plans or engage with patients. We have built brilliant algorithms to ensure hospitals and health plans get paid faster, while the actual delivery of care remains fundamentally analog.

Dr. Toyin Ajayi, CEO of Cityblock Health, views this as a massive missed opportunity. In her newly published manifesto, she argues that the industry must aggressively pivot its AI focus toward the population that has historically been the absolute last to receive technological innovation: Medicaid.

“When innovation is concentrated in the revenue cycle, we risk deepening the inflationary spiral that drives up costs without improving outcomes,” Dr. Ajayi wrote. “Risk adjustment, coding automation, and margin expansion will never solve the core problem: how to deliver more care with fewer resources.”

Deploying “Agentic” AI for the Underserved

For strategists and consultants mapping the future of healthcare IT, Cityblock’s operational blueprint offers a glimpse into the next evolution of value-based care technology.

Rather than treating AI purely as a back-office tool, Cityblock is deploying “agentic AI” as the new digital front door for Medicaid members. When a member is enrolled or discharged, AI voice and messaging agents initiate contact immediately. Crucially, these aren’t rigid, decision-tree chatbots. They are conversational models capable of detecting complex Social Determinants of Health (SDOH) needs—such as food insecurity or housing instability—and instantly routing structured summaries to human care coordinators.

Inside the clinic, Cityblock is pushing the boundaries of natural language processing (NLP). Their psychiatrists and physicians are utilizing ambient AI scribes that can listen to a clinical encounter in Spanish and natively generate an accurate, structured clinical note in English. This is the exact type of frictionless workflow automation that prevents provider burnout while expanding access for diverse populations.

Medicaid programs are straining under shrinking budgets, complex populations, and massive workforce attrition. You cannot simply “code” your way out of that crisis. Cityblock is demonstrating that AI can do more than just expand margins—it can actually scale human compassion. For the vendors and health plans that want to dominate the Medicaid space, this is the new technological standard.

For more information, visit https://www.cityblock.com/ai-report