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The Centers for Medicare and Medicaid Innovation has released its latest accountable care organization model, which is scheduled to launch at the conclusion of ACO Reach next year.
The LEAD (Long-term Enhanced ACO Design) Model is expected to appeal to a broader mix of healthcare providers, including those with specialized patient populations. It is also expected to attract organizations new to ACOs, such as smaller, independent or rural-based practices, according to the Centers for Medicare and Medicaid Services.
It has a 10-year performance period, the longest ever tested by CMS.
The LEAD model uses improved benchmarking and risk adjustment integrated across all ACOs, creating an incentive for more providers to develop the capabilities to care for patients with complex needs. At the same time, organizations that specialize in care for complex, chronic populations will be able to care for more of their patient population under an accountable care framework, CMS said.
All of these factors offer a predictable window without rebasing and a pathway toward sustainable long-term benchmarks and savings, CMS said.
LEAD also will focus on better serving coordinated care for high-needs patients, such as those dually eligible for Medicare and Medicaid, and those who are homebound or home limited.
LEAD starts on Jan. 1, 2027, and will run through Dec. 31, 2036.
ACOs can apply to participate in the model by responding to a Request for Applications beginning in March 2026.
WHY THIS MATTERS
ACOs have not always appealed to all healthcare providers. Many providers have not participated or have dropped out due to financial and administrative obstacles to success, CMS said.
LEAD provides cash flow through flexible, capitated population-based payments.
There’s also incentives for patients to seek care from providers in the ACO in Benefit Enhancements and Beneficiary Engagement Incentives. These include Part B cost sharing support and, by 2029, a Part D premium buy-down.
NAACOS, the National Association of ACOs, supports the model. CEO and President Emily Brower said the model’s 10-year timeline will allow participants to move past implementation to develop long-term investments and strategies that help move the transition to accountable care forward.
LEAD has several enhancements for which NAACOS has advocated, including bringing accountable care to more Medicare beneficiaries.
However, NAACOS said launching the model in 2027 does not provide ACO REACH participants with enough time to make the switch to the new model. CMS should extend ACO REACH through 2027 for a more seamless transition, NAACOS said.
LEAD creates incentives (where none currently exist) for providers to coordinate care and improve outcomes for dually eligible beneficiaries in Original Medicare, CMS said.
During an initial planning phase from March 2026 through December 2027, CMS will identify two states that are interested in partnering to develop a framework for ACO-Medicaid partnership arrangements. Pending successful completion of the planning period, ACOs in the selected states would have the opportunity to enter partnership arrangements with Medicaid organizations.
THE LARGER TREND
ACOs provide coordinated, value-based care, and preventive services help to reduce healthcare costs and unnecessary emergency room visits and hospitalizations.
There are two voluntary risk-sharing options in the new LEAD model.
Under Global Risk, ACOs receive up to 100% of their savings and are liable for up to 100% of total losses relative to their established performance benchmark.
In Professional Risk, ACOs receive up to 50% of total savings and are liable for up to 50% of total losses relative to their established performance year benchmark.
A CMS Administered Risk Arrangements (CARA) initiative will provide CMS support to ACOs to enable episode-based risk arrangements between ACOs and their specialists and provider organizations.
Email the writer: SMorse@himss.org