New information and communication technology (ICT) has the potential to improve care for chronic conditions, deliver better health outcomes, and reduce direct and indirect costs. However, realizing these gains necessitates new forms of care delivery, through adoption of ICT, the specific choice of ICT, and changes to existing forms of health care delivery. Realizing these new forms of delivery requires appropriate payment policies. The authors review the literatures on health care payment and ICT in chronic care and then apply theoretical economic analysis to determine how ICT alters health care payment policy recommendations. Using diabetes as an example, the authors identify and illustrate the disease and technology features that determine the optimal form of payment. Overall, ICT shifts the optimal blend of fee-for-service and capitation toward greater capitation. Carve-outs for ICT-supported preventive care enable more high-powered payment while addressing selection concerns.