Introducing the LEAD Model
On December 18, the CMS Innovation Center announced the Long-term Enhanced ACO Design (LEAD) Model, a new voluntary accountable care model designed to succeed ACO REACH. The model will launch January 1, 2027, following the conclusion of ACO REACH at the end of 2026, and will run for ten years through December 31, 2036.
Through LEAD, CMS is creating a long-term pathway for both existing and new ACOs, with an explicit emphasis on participation by smaller, independent providers and organizations serving underserved or complex populations. CMS has indicated that the model is intended to support improved care coordination for populations such as dually eligible beneficiaries and individuals who are homebound or home-limited.
LEAD also builds on prior Innovation Center models by further incentivizing episode-based risk arrangements with specialists and by expanding opportunities for providers and beneficiaries to engage in prevention and healthy living supports.
While the Request for Applications (RFA) has not yet been released, CMS has announced that ACOs can apply beginning in March 2026.
Key Model Features
Based on information released to date, CMS has outlined several core elements of the LEAD Model.
Participants
CMS anticipates that LEAD participants will include:
- Current ACO REACH participants, including High Needs REACH ACOs
- Other existing ACOs
- Medicare fee-for-service providers that have not previously participated in an ACO
CMS is establishing specific participation parameters to encourage involvement from providers serving underserved populations, including dually eligible beneficiaries, Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs).
Payment Arrangements
LEAD is a total cost of care model offering prospective, capitated, population-based payments. Participating ACOs may elect one of two voluntary risk-sharing options:
- Global risk: ACOs assume 100 percent of savings or losses for aligned beneficiaries
- Professional risk: ACOs assume 50 percent of savings or losses
Additional Payments for Rural Providers
CMS will offer an add-on payment to support rural providers in building the infrastructure necessary to participate as an ACO. These payments will not be subject to reconciliation.
Benchmarking and Risk Adjustment
While CMS has not yet released detailed benchmarking and risk adjustment methodologies, the agency has indicated that updates are forthcoming. These changes are intended to make the model more attractive to providers serving patients with complex needs, as well as rural and small, independent providers.
Alignment Minimums
CMS has not finalized beneficiary alignment requirements but has stated that lower alignment minimums will be available for providers new to ACO participation, including rural providers.
Timeline
The LEAD Model will operate from January 1, 2027, through December 31, 2036, making it the longest-running ACO model launched by the Innovation Center to date. CMS will begin accepting applications in March 2026; the RFA has not yet been released. For context, the Medicare Shared Savings Program application window typically opens in late May.
New and Notable Elements of the LEAD Model
While building on prior ACO frameworks, LEAD introduces several new features within the Innovation Center’s ACO portfolio.
Incentives for Medicare–Medicaid Integration
CMS will partner with two states to develop frameworks for ACO–Medicaid partnership arrangements aimed at improving care coordination and outcomes for dually eligible beneficiaries in Original Medicare. Beginning after 2027, CMS may allow ACOs in selected states to enter into partnership arrangements with Medicaid organizations.
CMS-Administered Risk Arrangements (CARA)
CMS will facilitate optional episode-based risk arrangements between ACOs and specialists, including a dedicated episode-based falls prevention program. Support will include access to episode-level data, standardized contracting frameworks and templates, and CMS-administered payments tied to episode-based performance.
New Beneficiary Incentives and Engagement Options
LEAD will expand benefit enhancements and beneficiary engagement incentives to support prevention and healthy living, including:
- Part D premium buydown: By 2029, ACOs may partially or fully offset a beneficiary’s Part D premium for a performance year
- Expanded Medical Nutrition Therapy: Coverage could extend beyond diabetes and renal disease to additional diet-sensitive conditions
- Chronic disease prevention rewards: ACOs may offer healthy food products to beneficiaries who engage in activities supporting chronic disease prevention and management
- Substance Access Beneficiary Engagement Incentive: ACOs and providers may discuss potential benefits of hemp products with patients, at the ACO’s expense and only in states where such products are legal
CMS has also indicated that this beneficiary engagement incentive will be made available to ACO REACH participants in performance year 2026 and to participants in the Enhancing Oncology Care Model beginning in performance period six.
ATI is unpacking LEAD and its implications for stakeholders across the healthcare ecosystem. Stay tuned for more insights and reach out to our experts to learn how ATI is supporting ACOs with this new pathway.