The Long-term Enhanced ACO Design (LEAD) Model may represent CMS’ most consequential structural shift for long-term care-focused accountable care in nearly a decade. Rather than isolating high-needs beneficiaries into a discrete track, LEAD embeds them directly across ACO panels, reshaping how organizations serving institutional and complex populations will need to think about attribution, care design, and financial performance.
Over the past decade, CMS has steadily expanded the scope and sophistication of accountable care, testing multiple pathways to better serve beneficiaries with complex clinical, functional, and social needs. Within that evolution, long-term care populations — particularly long-stay nursing facility residents — have emerged as an important focus area.
To directly address the needs of this population, CMS formally introduced a discrete option in 2021 through the High Needs Population (HNP) track within the Direct Contracting model. Since then, long-term care-focused MSSP ACOs and High Needs ACO REACH participants have consistently demonstrated that when high-needs, institutionalized populations are appropriately aligned and actively managed, outcomes improve and Medicare spending declines.
Against this backdrop, CMS’ recent signals around the Long-term Enhanced ACO Design (LEAD) Model offer some of the clearest indications yet of the agency’s intent to meet providers and patients where they are within existing care panels, enabling both claims-based and voluntary attribution pathways. As TINs apply for LEAD participation, all primary care — associated NPIs will be included — more closely mirroring MSSP’s structure rather than ACO REACH, which allowed opt-in participation at the provider level. This broader inclusion of providers within LEAD expands eligibility for beneficiaries who may choose to participate through voluntary attribution and expands the population of beneficiaries who can be aligned to an ACO through claims-based alignment. Because LEAD expands both voluntary attribution and claims-based alignment, the model will require closer coordination among ACOs, their provider partners, and eligible beneficiaries.
Rather than carving out complexity into a standalone track, LEAD embeds high-needs beneficiaries across the attributed population. Early CMS communications indicate that when an ACO’s patient population includes 40 percent or more high-needs beneficiaries, a prospective payment track may apply. For organizations hovering near that 40 percent threshold, panel composition and alignment strategy could meaningfully alter financial structure. Decisions about attribution management, voluntary alignment, and specialty engagement may directly influence whether an ACO qualifies for prospective payments under LEAD.
Together, these design elements reshape how ACOs and participating provider practices will need to think about patient panels, care delivery, and financial performance when evaluating whether to participate in an ACO program and, if so, which one.
Managed FFS Care – The High-Needs and Long-Term Care Landscape
Under prior models, high-needs populations were often addressed through discrete eligibility pathways and managed by specialized programs, such as High Needs REACH ACOs and long-term care-focused MSSP ACOs. At the same time, approximately 75% of Medicare fee-for-service spending on long-term care nursing facility residents is not managed through accountable care arrangements, representing an estimated $18.9 billion in Medicare costs.
Care fragmentation also exists at the facility level. ACO alignment and estimated Medicare FFS per-beneficiary-per-month (PBPM) spending differ significantly across nursing facilities, with more than 75% of facilities serving long-stay resident populations that are aligned with two or more ACOs, and over 45% of facilities have three or more ACOs serving their long-stay resident population. Despite this fragmentation, the opportunity for Medicare savings through improved alignment remains substantial. If ACO alignment increased by 10 to 20% among the approximately 70% of the long-term care nursing facility population that is currently unaligned with an ACO, estimated annual Medicare savings could range from $213 million to $426 million.
For care delivery teams, the opportunity to provide more comprehensive care to this population is also significant. Prior performance results show average savings exceeding $6,500 per aligned beneficiary among long-term care-focused MSSP ACOs in 2024 and more than $5,500 per aligned beneficiary among High Needs REACH ACOs in 2023, resulting in better overall outcomes for beneficiaries.
Looking Ahead
With LEAD’s incorporation of prospective payments for populations with 40% or more high-needs beneficiaries, along with broader NPI inclusion, ACO leaders will need to consider the full breadth of attributed patient needs holistically. This includes implications for care model design, staffing, analytics, and financial oversight. Population segmentation, risk stratification, and care management approaches will need to accommodate a wider range of needs while maintaining expertise in complex care management. For organizations serving high-needs and institutional populations, these changes heighten the importance of disciplined panel management, alignment strategy, and population-level cost forecasting.
LEAD also encourages specialty engagement through flexible NPI participation and CMS-Administered Risk Arrangements (CARA), including “shadow bundles” that allow ACOs to test episode-based risk arrangements with CMS support. For high-needs populations — particularly those in long-term care settings — specialty utilization is often a key cost and quality driver. By lowering administrative barriers and standardizing episode-based approaches, CARA creates additional pathways for integrating specialty care into accountable care models. This aligns with evidence from physician-led and long-term care-focused ACOs, where stronger primary and specialty care integration has consistently contributed to improved performance.
What ACO Leaders Should Be Pressure-Testing Now
As ACOs assess potential LEAD participation, readiness will depend on aligning strategy, analytics, and operations with the model’s requirements. ATI supports organizations by helping them pressure-test financial assumptions, refine attribution and alignment strategies, and design care models capable of managing high-needs populations embedded across broader patient panels.
With application timelines approaching, ACO leaders should be asking: How many beneficiaries would be attributed based on claims-based alignment (and do we need a voluntary alignment strategy)? What percentage of our attributed population would qualify as high-needs under LEAD’s embedded framework? How concentrated is that population across facilities and providers? Where does our attributed population’s historical cost and utilization patterns indicate performance improvement opportunity? And how would prospective payment eligibility change our financial outlook?
Moving from observation to preparation will require modeling these dynamics now — before the application window opens.
Note: This is Part 1 of ATI Advisory’s LEAD Readiness Series, examining how LEAD restructures high-needs and long-term care populations within accountable care. Part 2 explores the model’s broader financial and strategic implications for ACOs.