The Centers for Medicare & Medicaid Services ("CMS") unveiled the Long-term Enhanced Accountable Care Organization ("ACO") Design ("LEAD") model, which aims to expand provider participation, increase beneficiary involvement in preventive care, and modernize financial benchmarking for long-term stability.
CMS recently announced the LEAD model, set to succeed the ACO REACH model, which concludes December 31, 2026. LEAD incorporates new policies intended to level the playing field among provider types and attract more beneficiaries, including those needing complex care, to participate. ACOs can apply to LEAD by responding to a Request for Applications beginning March 2026.
Key Features
- Duration: January 1, 2027 – December 31, 2036
- Eligible Participants: Current REACH ACOs, other Medicare ACOs, Medicare fee-for-service providers new to ACOs, and providers serving underserved populations.
- Benchmarking: Benchmarks initially based only on historical costs and never rebased. Benchmarks will be updated using a blend of actual national and regional spending trends and a prospective growth factor with guardrails.
- Payment: Flexible payment options including monthly upfront and capitated payments, with 50% or 100% risk-sharing of savings or losses relative to benchmark.
- CMS-Administered Risk Arrangement ("CARA"): CARA empowers ACOs to negotiate episode-based target prices directly with specialists, who then share in savings or losses depending on whether actual costs are below or exceed the target price.
- High-Need Patients: High-need patients will be treated as a distinct population type with their own benchmark and trend factor. ACOs with greater than 40% of beneficiaries considered high-need patients qualify for a lower minimum beneficiary count to participate.
- Benefit Enhancement and Engagement Incentives: (i) Part B Cost-Sharing: ACOs may agree with participants and preferred providers to cover some or all of beneficiary cost-sharing for designated Part B services; (ii) Part D Premium Buy-Down: Starting no later than 2029, ACOs may subsidize some or all of beneficiaries' Part D premiums; and (iii) Chronic Disease Prevention Reward: ACOs may offer healthy food to beneficiaries engaging in healthy living activities and participating in evidence-based disease management programs.
Note: CMS has stated that it "may determine that the Anti-Kickback Statute safe harbor for CMS-sponsored model patient incentives is available to protect these patient incentives."
- Medicaid Integration: CMS will select two states to partner with to define how ACOs and Medicaid organizations can work together to share data, coordinate care, and share in savings to improve outcomes.
