Long-Term Enhanced ACO Design (LEAD) Model Executive Summary
Health Transformation Advisory
CMMI’s Next-Generation Accountable Care Program
Performance Period: January 2027 – December 2036
Program Overview
On December 18, 2025, the Centers for Medicare & Medicaid Services Innovation Center (CMMI) officially announced the Long-term Enhanced ACO Design (LEAD) Model — a landmark voluntary accountable care initiative that will succeed the ACO REACH program when it concludes on December 31, 2026.
LEAD launches January 1, 2027 and runs through December 31, 2036, making it the longest-running ACO demonstration model in the history of CMS. It is designed to address the structural limitations that prevented many providers from participating in — or succeeding within — previous ACO models, while advancing the goal of broad, sustainable value-based care adoption across the Medicare fee-for-service population.
Applications will be accepted beginning March 2026 via a formal Request for Applications (RFA). This summary provides an overview of the LEAD model’s design, its key differentiators from ACO REACH, and the strategic rationale for provider enrollment.
Key Advantages of ACO LEAD
| 1 | 10-Year Performance Horizon with No Benchmark Rebasing
LEAD offers the longest ACO performance period CMS has ever tested. Unlike prior models that rebased benchmarks periodically — often eroding earned savings — LEAD commits to a fixed historical benchmark for the full 10-year term. This gives ACOs sustained financial predictability and the ability to invest confidently in long-term care improvement strategies without fear that their savings will be reset. |
| 2 | Enhanced & Flexible Prospective Cash Flow Payments
LEAD provides enhanced capitated, population-based payments upfront for all participating ACOs. This improved cash flow mechanism addresses one of the most significant barriers to entry and sustainability for smaller and independent practices, ensuring organizations have the operating resources to deliver high-quality care without waiting for reconciliation cycles. |
| 3 | Expanded Access for Small, Rural & Independent Practices
LEAD explicitly targets providers who were historically excluded from ACO participation due to financial and administrative burdens. Infrastructure support payments and lower beneficiary alignment minimums are offered for organizations new to ACOs and for rural practices. If an ACO’s population is more than 40% high-needs beneficiaries, CMS will reduce minimum panel size requirements, enabling smaller specialty-focused organizations to qualify. |
| 4 | Integrated High-Needs Population Management
In ACO REACH, high-needs beneficiaries were managed through a separate track with limited reach. Under LEAD, all ACOs manage high-needs patients — including those with multiple chronic conditions, frailty, and dual Medicare/Medicaid eligibility — as part of their core aligned population. A dedicated trend factor and concurrent risk adjustment methodology ensures benchmarks accurately reflect the complexity of these patients, eliminating the financial disincentive to serve them. |
| 5 | Specialist Integration via CARA
LEAD introduces CMS-Administered Risk Arrangements (CARA), a formal and streamlined mechanism for ACOs to formally partner with specialists to coordinate care for their patients. This is a fundamental structural change from ACO REACH, where specialist integration was informal and difficult to operationalize. CARA enables broader care coordination and accountability across the continuum. |
| 6 | Medicare-Medicaid Integration Pilot
LEAD includes a two-state pilot program that allows selected ACOs to partner with Medicaid organizations, targeting improved coordination and outcomes for dually eligible beneficiaries in Original Medicare. Beginning after 2027, this creates a pathway toward true whole-person care integration across federal and state payers — a long-sought goal in value-based care. |
| 7 | Enriched Beneficiary Engagement Incentives
LEAD continues and enhances beneficiary engagement tools available under ACO REACH. ACOs can offer Part B cost-sharing support (waiving copays for key services), and beginning in 2029, may offer a Part D premium buy-down. These incentives not only improve patient experience and loyalty to the ACO’s provider network but directly support better care utilization and quality outcomes. |
ACO LEAD vs. ACO REACH: Side-by-Side Comparison
Why Providers Should Enroll in ACO LEAD
1. Financial Stability and Long-Term Investment Security
The single most transformative feature of LEAD is the elimination of benchmark rebasing over a 10-year period. In ACO REACH and predecessor models, high-performing ACOs that achieved significant savings often saw their benchmarks reset lower — effectively punishing success. LEAD corrects this structural flaw, allowing providers to build their care management infrastructure knowing that each dollar of savings generated today compounds into a stronger financial position over a decade-long horizon.
2. Improved Cash Flow for Care Delivery
Enhanced prospective, capitated payments provide ACOs with stable, predictable revenue that is not contingent on year-end reconciliation. This is especially critical for independent physician groups, community health centers, and rural practices that lack the capital reserves to absorb delayed payments. With reliable upfront funding, providers can hire care coordinators, invest in data analytics, and expand patient outreach — the foundational activities that drive quality and savings.
3. Broader Patient Population, Greater Impact
By integrating high-needs beneficiaries into all ACO populations and enabling formal specialist partnerships through CARA, LEAD dramatically expands the scope of patients an ACO can meaningfully serve. This creates greater attribution volume, which in turn provides more statistical power when calculating performance — reducing volatility and risk for participating organizations. Providers focused on complex or frail populations will find LEAD’s structure far more accommodating than prior models.
4. Reduced Administrative and Financial Barriers
LEAD is explicitly designed to lower barriers to entry. Lower alignment minimums, infrastructure support payments for rural providers, and flexible risk-sharing tracks (Professional at 50% or Global at 100%) allow organizations to enter the model at a risk level commensurate with their capabilities and scale up over time. The Professional track requires four years of participation before switching to Global, ensuring organizations build the operational maturity needed to manage full financial risk responsibly.
5. Strategic Positioning in the Value-Based Care Landscape
CMS has signaled that LEAD will be the primary risk-bearing ACO model for fee-for-service Medicare through 2036. With ACO REACH sunsetting and no alternative CMMI risk model at comparable scale expected, LEAD represents the dominant pathway for providers seeking to participate in total cost-of-care accountability. Early enrollment positions organizations as leaders in the value-based care transition, with potential competitive advantages in contracting, patient attribution, and payer relationships.
6. Medicare-Medicaid Integration Opportunity
For organizations serving dually eligible populations, the LEAD pilot for Medicare-Medicaid integration represents an unprecedented opportunity. The Financial Alignment Initiative — the prior demonstration for dual-eligible coordination — concluded in 2025. LEAD’s two-state pilot opens a new avenue for integrated care coordination that can improve outcomes for the most complex and costly patient populations while generating shared savings across both Medicare and Medicaid programs.
7. Support from CMS, AMA, and NAACOS
The LEAD model has received broad support from key healthcare stakeholder organizations. The American Medical Association (AMA) endorses the model for its physician-led design, focus on care coordination, and reduced administrative burden. The National Association of ACOs (NAACOS) supports the 10-year timeline, calling it a meaningful step toward long-term ACO investment and sustainability. This broad institutional backing strengthens confidence that LEAD will provide a stable, long-term policy environment for participating providers.
Application & Implementation Timeline
Conclusion & Recommendation
The ACO LEAD model represents a fundamental evolution in CMS’s approach to accountable care — one that directly addresses the structural, financial, and operational barriers that limited the reach and sustainability of predecessor programs. With a fixed 10-year benchmark, enhanced cash flow mechanisms, formal specialist integration, and targeted support for underserved and rural populations, LEAD is the most provider-friendly total cost-of-care model CMMI has ever offered.
For current ACO REACH participants, enrollment in LEAD offers continuity and significant structural improvements. For organizations that were unable or unwilling to participate in REACH, LEAD provides a more accessible entry point with lower minimums, infrastructure support, and flexible risk tracks.
Given that LEAD is expected to be the primary risk-bearing ACO pathway in fee-for-service Medicare through 2036, early enrollment is a strategic imperative. Provider organizations that begin their readiness assessment, build necessary partnerships, and engage with the RFA process in Spring 2026 will be best positioned to succeed in the next era of value-based care.
