CMS Unveils LEAD: The Future of Accountable Care Has a 10-Year Horizon

Today marks a pivotal moment in the evolution of American healthcare. CMS announced the Long-term Enhanced ACO Design (LEAD) Model—and the name tells you everything about its ambition. This isn't another 3-year experiment. It's a decade-long commitment that fundamentally changes the calculus for every healthcare organization considering value-based care.

The model launches January 1, 2027, following ACO REACH's conclusion, and runs through December 31, 2036. For the first time, CMS is offering providers what they've long demanded: predictability.

What is the LEAD Model?

At its core, LEAD is CMS Innovation Center's next-generation ACO model—the direct successor to ACO REACH. But calling it a successor understates the transformation. Where previous models were designed as tests, LEAD is designed as a destination.

The model is built on three strategic pillars:

1. Long-term Financial Predictability: A 10-year performance window with no benchmark rebasing—solving the "ratchet effect" that penalized efficient ACOs

2. Deep Care Integration: New mechanisms for specialty care management (CARA) and a first-of-its-kind Medicaid integration framework

3. Expanded Inclusivity: Targeted support for rural, independent, and safety-net providers historically excluded from advanced risk models

The Game-Changer: No More Benchmark Rebasing

If you've worked in value-based care, you know the frustration: you spend three years optimizing care delivery, finally achieve real savings—and then CMS resets your benchmark based on your new, lower costs. Suddenly, you're back to square one, needing to find additional efficiencies just to break even.

This "ratchet effect" has been the Achilles' heel of ACO models. It destroyed the business case for major infrastructure investments—why spend $5 million on a care management platform if your benchmark gets cut before you see ROI?

LEAD eliminates this problem. Your benchmark is set at the model's start and trended forward using an external growth factor (likely regional USPCC) that's independent of your specific performance. If you create efficiencies in Year 1 and maintain them, you capture that spread for the entire decade.

The strategic implication is profound: investments that require 5-7 year amortization periods—advanced analytics platforms, housing interventions, intensive care navigation programs—now make economic sense.

Key Features of the LEAD Model

Risk-Sharing Options

LEAD offers two tracks, simplifying the multi-track complexity of MSSP:

CMS Administered Risk Arrangements (CARA)

One of the most significant innovations in LEAD is CARA—a mechanism that finally addresses the "specialty leakage" problem that has plagued total-cost-of-care models.

Here's the problem CARA solves: In previous models, your ACO was responsible for total cost of care, but if a patient saw an unaffiliated orthopedic surgeon for a knee replacement, you bore the cost with no mechanism to align that surgeon's incentives with yours.

CARA allows ACOs to enter CMS-administered episode-based risk arrangements with specialists. Think of it as embedding bundled payments (like BPCI Advanced) directly within your population-based ACO model. Specialists accept downside risk for defined episodes in exchange for shared savings—creating real incentive alignment without requiring employment.

Notably, CARA will include an episode-based falls prevention program—signaling CMS's focus on the high-cost, preventable events that drive spending in elderly populations.

Medicaid Integration Framework

LEAD introduces a groundbreaking approach to dual-eligible coordination. Starting March 2026, CMS will launch a planning phase to identify two states willing to develop ACO-Medicaid partnership arrangements.

The significance: Dual-eligible beneficiaries navigate two disconnected systems—Medicare for medical care, Medicaid for long-term services, home care, and behavioral health. ACOs typically only see Medicare data, leaving them blind to half of what drives their patients' outcomes.

By creating formal frameworks for data sharing and care coordination between ACOs and State Medicaid Agencies, LEAD attempts to construct a "total view" of the patient—enabling interventions in social determinants (paid by Medicaid) to prevent medical events (paid by Medicare).

New Beneficiary Benefits

LEAD introduces tools to help Traditional Medicare ACOs compete with Medicare Advantage on beneficiary value:

• Part D Premium Buy-Down (2029): ACOs can subsidize beneficiaries' prescription drug premiums—a direct retention tool

• Expanded Medical Nutrition Therapy: Coverage beyond diabetes/renal disease to other diet-sensitive conditions

• Part B Cost-Sharing Support: Waive or reduce copays for ACO provider visits

• Chronic Disease Prevention Rewards: Healthy food products for beneficiaries engaging in prevention programs

• Substance Access BEI: Consultations on eligible hemp products (state-legal, ACO-funded)

Rural and Independent Practice Support

LEAD explicitly targets providers historically excluded from advanced risk models:

• Unreconciled Add-On Payments: Infrastructure grants (not loans) for rural providers—covering telehealth, care navigation, and IT buildout

• Lower Alignment Minimums: Reduced beneficiary thresholds for new entrants and rural practices

• Flexible Capitated Payments: Prospective cash flow to decouple participation from needing massive external capital

Timeline: What's Coming and When

What's Still Pending

The March 2026 RFA will need to clarify several critical details:

• Specific benchmarking methodology and calculation formulas

• Quality measure specifications and reporting requirements

• CARA episode definitions and specialty risk arrangement details

• Risk adjustment model specifications (likely V28 continuation)

• Exact capitation payment amounts and methodologies

• State selection criteria for Medicaid integration pilots

• Discount rate applied to Global risk benchmarks

LEAD vs. ACO REACH: The Fundamental Shifts

While LEAD is REACH's direct successor, it represents a philosophical evolution—from "equity via governance" to "equity via structural integration."

Strategic Analysis: What This Means for Your Organization

For Current ACO REACH Participants

LEAD offers a natural transition with dramatically improved stability. The key decision: commit to a 10-year journey or exit before the RFA. There's no middle ground. Organizations should begin modeling their performance under a no-rebasing scenario now—the math changes significantly when efficiencies compound over a decade.

For Organizations New to Value-Based Care

LEAD is explicitly designed to lower your barriers to entry. The Professional Risk track (50/50), infrastructure grants for rural providers, and lower alignment minimums create an accessible on-ramp. If you've been waiting for the "right" ACO model, this is CMS's clearest signal yet that they're building for you.

For Organizations Serving Complex Populations

The integration of high-needs support across all ACOs, combined with the Medicaid partnership framework, represents a significant opportunity. Organizations specializing in dual-eligible, homebound, and chronically ill patients can finally operate in a model that recognizes—and pays for—the complexity of their work.

For Home-Based Care Providers

LEAD's explicit focus on homebound and home-limited populations creates partnership opportunities. Position yourself as an essential partner to ACOs seeking to manage these populations effectively. The model's "improved benchmarking" for these populations likely accounts for functional impairment in ways standard HCC models don't.

The Bottom Line

LEAD represents CMS's most significant bet on accountable care since MSSP's launch. By committing to a 10-year performance period and eliminating the ratchet effect, CMS is signaling that ACO participation is no longer an experiment—it's meant to be the standard operating system for Traditional Medicare.

The model positions itself as the "forever model" for fee-for-service Medicare—a benefit-rich alternative to Medicare Advantage that empowers providers to take control of the clinical and financial destiny of their patients for the next decade.

Success will hinge on the technical execution of CARA and Medicaid integration. If CMS delivers on these complex features, LEAD could finally close the two largest loopholes in total-cost-of-care models: specialty leakage and dual-eligible fragmentation.

For healthcare leaders: the March 2026 RFA is your next milestone. Start strategic planning now—because a 10-year commitment requires a different level of organizational readiness than a 3-year pilot ever did.

Stay Connected: Subscribe to the LEAD Model listserv at CMS.gov for updates, or contact the LEAD Model team at LEAD@cms.hhs.gov.