Cut through the noise, find the signal: Intelligence for serious healthcare leaders
Analysis updated November 9, 2026
The Long-term Enhanced ACO Design (LEAD) Model is CMMI's newest accountable care organization initiative, launching January 1, 2027, and running through December 31, 2036 — the longest performance period CMS has ever tested in a single model. LEAD is the designated successor to the ACO REACH Model, which concludes at the end of 2026, and builds directly on lessons from ACO REACH, the Next Generation ACO Model, and the Medicare Shared Savings Program (MSSP).
The model's core problem statement is structural: prior ACO models created financial and administrative conditions that caused smaller, rural, independent, and specialty-focused practices to either never join or to drop out. CMS's own internal research found that through 2022, only approximately 20% of TINs with assignable beneficiaries participated in MSSP or a CMMI ACO. As of June 2025, only 45% of Original Medicare beneficiaries were aligned to MSSP or ACO REACH. Non-participating practices exhibited higher per-beneficiary spend, representing a substantial untapped opportunity for Medicare savings.
The specific structural deficiencies LEAD addresses include: (1) benchmarking methodologies that penalize ACOs for their own success through "rebasing" — the ratchet effect that resets base years to incorporate more recent (lower) historical expenditures; (2) inadequate financial support for providers serving high-cost, complex populations; (3) insufficient tools to engage specialists within the accountability framework; and (4) absence of meaningful beneficiary financial incentives to seek care from ACO-affiliated providers.
LEAD's answer is a 10-year, no-rebase performance period paired with improved benchmarks, prospective capitated payments, and a suite of beneficiary engagement tools designed to attract both higher-spending ACOs (who have room to improve) and lower-spending ACOs (who need a longer runway to sustain prior savings). Over the decade, Medicare Parts A and B costs across both ACO types are designed to gradually converge, laying the groundwork for a future transition away from individual ACO historical benchmarks.
LEAD represents the most significant structural commitment CMS has made to accountable care continuity. The 10-year horizon without rebasing is transformational: it means a provider organization that enters in PY 2027 can project its benchmark trajectory through 2036 without the existential risk of losing financial headroom as performance improves. This changes the investment calculus for physician organizations, private equity-backed medical groups, and regional health systems considering value-based care infrastructure buildout.
The model's deliberate expansion toward previously excluded provider types — Federally Qualified Health Centers (FQHCs), Rural Health Clinics (RHCs), Critical Access Hospitals (CAHs), smaller independent practices, and organizations serving dually eligible populations — signals that CMS is attempting to move beyond the hospital-system-centric ACO population that dominated early model cohorts. The evidence base cited in the RFA explicitly notes that physician-led ACOs have demonstrated stronger savings than hospital- or health system-led entities, citing CBO analysis.
The CMS-Administered Risk Arrangements (CARA) initiative is strategically significant in its own right: it creates a CMS-facilitated infrastructure for episode-based risk arrangements between ACOs and their specialist Preferred Providers, a capability that prior models left entirely to ACO-level bilateral negotiation. This materially lowers the administrative barrier to specialist engagement and creates a pathway for specialty practices to participate in downside risk without forming their own ACOs.
The Benefit Enhancement and Beneficiary Engagement Incentive suite — including Part B cost-sharing support and a Part D premium buy-down available by 2029 — introduces consumer-side market mechanisms absent from previous models. If beneficiaries receive meaningful financial incentives to seek care from ACO-affiliated providers, this creates competitive differentiation for LEAD ACOs within the Original Medicare market, a dynamic more analogous to Medicare Advantage than traditional FFS ACO models.
The Substance Access Beneficiary Engagement Incentive (BEI) — permitting ACO participants to consult with beneficiaries about eligible hemp products at the ACO's expense, available only in states where such products are legal — reflects a broader Trump administration emphasis on alternative and wellness-oriented approaches to health. The same BEI is being introduced into ACO REACH in PY 2026 and the Enhancing Oncology Model starting in performance period 6, signaling a cross-model policy direction under current CMMI leadership.
LEAD was developed and is launching under the Trump administration's second term, with CMS under Administrator Dr. Mehmet Oz and CMMI under Director Abe Sutton. The model's strategic framing — emphasizing patient empowerment, beneficiary choice, preventive care, healthy living, competition among providers, and independence for smaller practices — is directionally consistent with the administration's stated policy priorities. The model's "Healthy Living Strategy" language and the "Make Americans Healthy Again" framing explicitly referenced in the RFA reflects alignment with HHS Secretary Robert F. Kennedy Jr.'s public health messaging.
The model's emphasis on independent, physician-led, and rural providers aligns with the administration's stated concerns about consolidation and health system market power. The explicit attraction strategy targeting organizations with "higher per-beneficiary spend" compared to their region — combined with benchmarks that give these organizations financial room to participate without penalty — reflects a deliberate policy choice to expand the ACO universe beyond the well-resourced, already-efficient health systems that have dominated prior cohorts.
CMMI's Tech Enabler Initiative and the phased adoption of electronic clinical quality measures (eCQMs) and digital quality measures (dQMs) — optional in PY 2027-2028, pay-for-reporting in PY 2029-2030, and pay-for-performance beginning PY 2031 — reflects continuity with broader CMS digital infrastructure priorities.
LEAD is positioned to become the dominant CMMI accountable care vehicle for the period 2027-2036, absorbing the ACO REACH participant base and expanding the ACO universe. Organizations currently in ACO REACH are eligible for an abbreviated application, reducing transition friction. The 10-year commitment horizon will accelerate investment in care management infrastructure, population health technology, and specialist engagement arrangements in ways that shorter-cycle models could not justify.
The Medicare-Medicaid integration framework — involving a planning phase from March 2026 through December 2027 to identify two partner states and develop ACO-Medicaid partnership arrangements — has the potential to extend financial accountability into the Medicaid program for dually eligible Original Medicare beneficiaries. If successful, this represents a structural shift in how total cost of care is managed for a population that currently generates fragmented accountability across payers.
LEAD ACOs must be legal entities identified by a federal TIN, formed under applicable state, federal, or tribal law. The model uses a whole TIN approach, meaning all Medicare-enrolled providers billing under a Participant TIN are included in the ACO's participant structure.
Eligible Participant TIN types include physician group practices, networks of individual practices, hospitals employing physicians, FQHCs, RHCs, and CAHs. ACOs also maintain a separate Preferred Provider List — typically specialty providers — who can share in financial risk, access model incentives, and participate in CARA, but do not contribute to beneficiary alignment or quality performance reporting.
| Attribute | Participant TIN | Preferred Provider |
|---|---|---|
| Used for Alignment | Yes | No |
| Capitation | Mandatory (if enrolled) | Optional |
| Quality Reporting | Yes | No |
| Eligible for Shared Savings | Yes | Yes |
| Whole TIN Participation | Yes | No |
| CARA Eligible | No | Yes (Global Risk only) |
Minimum beneficiary alignment requirements:
| ACO Type | Standard Minimum (PY 2027) | Claims-Based BY Minimum | High Needs/ESRD Minimum (PY 2027) | H/N BY Minimum |
|---|---|---|---|---|
| Standard | 5,000 | 3,000 | N/A | N/A |
| Newly Entering ACOs | 1,000 (rising to 5,000 by PY 2031) | 600 (rising to 3,000) | N/A | N/A |
| High Needs/ESRD Eligible | 800 (rising to 1,600 by PY 2031) | 500 (rising to 1,000) | Applies if ≥40% of aligned population is High Needs/ESRD | Required care delivery capabilities |
ACOs qualify for lower alignment minimums if at least 40% of total aligned beneficiaries are in the High Needs and/or ESRD categories and the ACO demonstrates: 24/7 provider access with EHR access, providers trained in advanced care planning, and ability to deliver care in patients' homes.
Newly Entering ACOs are defined by meeting any of three criteria: (1) no prior Medicare ACO initiative performance, (2) fewer than 40% of Participant TINs participated in a Medicare ACO initiative in the past 5 years, or (3) fewer than 50% of Participant Providers participated in a Medicare ACO initiative in the past 5 years.
LEAD offers two voluntary risk tracks:
| Feature | Global Risk Option | Professional Risk Option |
|---|---|---|
| Upside Share | Up to 100% of savings | Up to 50% of savings |
| Downside Liability | Up to 100% of losses | Up to 50% of losses |
| CARA Eligibility | Yes (required to access CARA) | No |
| Basis | Total Medicare Parts A & B TCOC | Total Medicare Parts A & B TCOC |
Risk corridors and stop-loss provisions are included, along with an Extended Repayment Option and a financial guarantee requirement demonstrating ability to repay Shared Losses.
LEAD's benchmarking is its most structurally differentiated feature. The 10-year period without rebasing eliminates the ratchet effect that penalized successful ACOs in prior models. Key architectural elements:
LEAD features multiple prospective capitated payment options:
Fee reductions are applied to Participant Providers and Preferred Providers enrolled in prospective payment mechanisms; CMS reduces FFS payments for covered services furnished to aligned beneficiaries, with the difference made up prospectively through capitated payments.
Quality Withhold: 3% of Financial Benchmark in all performance years.
Quality Measures by Phase:
| Measure | PY 2027-2028 | PY 2029-2030 | PY 2031-2036 | Submission Method |
|---|---|---|---|---|
| ACR (All-Condition Readmission) | P4P | P4P | P4P | CMS calculates from claims |
| UAMCC (Unplanned Admissions, Multiple Chronic Conditions) | P4P | P4P | P4P | CMS calculates from claims |
| DAH (Days at Home) | P4P | P4P | P4P | CMS calculates from claims |
| TFU (Timely Follow-Up After Acute Exacerbations) | P4P | P4P | P4P | CMS calculates from claims |
| CAHPS Survey | P4P | P4P | P4P | ACO contracts with approved vendor |
| CBP (Controlling High Blood Pressure) | Optional (bonus) | P4R | P4P | FHIR API, Excel, or QRDA |
| GSD (Diabetes Glycemic Status >9%) | Optional (bonus) | P4R | P4P | FHIR API, Excel, or QRDA |
Quality Withhold allocation by phase:
| Phase | P4R Portion | P4P Portion (per measure) |
|---|---|---|
| PY 2027-2028 | None | 0.60% each × 5 measures = 3.0% |
| PY 2029-2030 | 0.43% each for CBP, GSD = 0.86% | 0.43% each × 5 measures = 2.14% |
| PY 2031-2036 | None | 0.43% each × 7 measures = 3.0% |
Scoring architecture:
CARA is exclusively available to Global Risk Option ACOs and operates through an amendment to the Performance Year Participation Agreement (LPACA). Key features:
| Milestone | Date |
|---|---|
| Medicare-Medicaid Integration Planning Phase begins | March 2026 |
| Application portal opens | March 31, 2026 |
| LEAD Model Overview Webinar | March 17, 2026 |
| RFA published | April 9, 2026 |
| Application Office Hours | April 21, 2026 |
| Letter of Interest (LOI) form released | No later than April 20, 2026 |
| Alignment and Finance Office Hours | May 5, 2026 |
| Application portal closes | May 17, 2026, 11:59 PM ET |
| Implementation Period begins | September 15, 2026 |
| ACO REACH Model concludes | December 31, 2026 |
| Implementation Period ends | December 31, 2026 |
| PY 2027 (Performance Year 1) begins | January 1, 2027 |
| Medicare-Medicaid Integration Planning Phase ends | December 2027 |
| Part D premium buy-down available | By 2029 |
| CBP and GSD become mandatory (P4R) | PY 2029 |
| CBP and GSD become pay-for-performance | PY 2031 |
| Final Performance Year ends | December 31, 2036 |
The Implementation Period (September 15 – December 31, 2026) is optional and non-financial: no payments, no risk, no beneficiary-identifiable data sharing, and no aligned beneficiaries. Its sole purpose is enabling voluntary alignment activities to position ACOs to meet the PY 2027 minimum alignment threshold at launch. ACO REACH participants are eligible for an abbreviated application that streamlines confirmation of organizational structure and selection of model participation options.
CMS has indicated it anticipates offering additional application windows for subsequent Performance Years, with early model experience informing future cohort design. Organizations not ready for PY 2027 are encouraged to submit a non-binding Letter of Interest to receive updates and future application window notifications.