CMS’ LEAD Model Seeks to Address ACO REACH’s Limitations

The Centers for Medicare and Medicaid Innovation Center has introduced a new accountable care organization model that is set to launch following the conclusion of the ACO REACH model at the end of 2026. 

ACO REACH’s goals included advancing health equity to bring the benefits of accountable care to underserved communities. It allowed providers to offer benefits to traditional Medicare beneficiaries not otherwise allowed such as cost-sharing waivers, chronic disease management rewards, and more flexible care in the home. 

NAACOS, the National Association of ACOs, had urged CMS to expand and extend the program. That expansion is taking shape in the new Long-Term Enhanced ACO Design (LEAD) model, which features a 10-year timeline that CMS said would allow participants to move past implementation to develop long-term investments and meaningfully innovate strategies that help move the transition to accountable care forward.

CMS anticipates that LEAD participants will include current ACO Reach model participants and other ACOs, FQHCs and rural health clinics, as well as Medicare fee-for-service healthcare providers that have historically not participated in ACOs.

Key LEAD features include equipping providers with the tools they need to care for patients with complex health needs, integrating Medicaid to improve data sharing and care coordination, and offering downstream value-based care arrangements to allow providers to design clinician teams that best support the populations they serve.

As a LinkedIn blog post from the health IT analytics software vendor Arcadia puts it, the outline of LEAD seems to show that CMS is listening. "They have heard feedback from ACOs about the need for stabilizing benchmarks and, crucially, creating better pathways for smaller and rural practices to participate. In other words, LEAD introduces mechanics that may address several limitations that ACOs experienced under ACO REACH,” the blog said. 

One new feature of the model is called CMS Administered Risk Arrangements (CARA): The CARA initiative will provide CMS support to ACOs to enable episode-based risk arrangements between ACOs and their specialists and provider organizations to facilitate greater and stronger Preferred Provider relationships with these downstream healthcare providers. In addition, CARA will feature an episode-based falls prevention program.

In a statement, NAACOS applauded the creation of the model but said that launching it in 2027 does not provide ACO REACH participants with enough time to evaluate alternative payment models options and effectively plan their transition. “To that effect, CMS should extend ACO REACH through 2027 to set up a seamless glide path for participants looking to remain in value-based payment models,” the statement said. 

CMS said that LEAD is designed to provide ACOs enhanced, flexible cash-flow payments; and greater freedom and tools to support spending time with and meeting patient needs, including those with specialized care needs. LEAD aims to increase the scope of ACOs to include more small, more rural, and more independent healthcare providers and community health centers.

In addition to the 10-year pathway toward sustainable benchmarks, the model will offer flexible, capitated population-based payments to support team-based care and downstream value-based care arrangements. It will seek to integrate care for special populations, including patients with complex needs and dually eligible beneficiaries.

The model will also include new Benefit Enhancements and Beneficiary Engagement Incentives that create incentives for beneficiaries to seek care from providers in ACOs, including Part B cost sharing support and by 2029, a Part D premium buy-down.

LEAD features two voluntary risk-sharing options:
• Global Risk: Eligible to receive up to 100% of their savings and liable for up to 100% of total losses relative to their established performance benchmark.
• Professional Risk: Eligible to receive up to 50% of total savings and liable for up to 50% of total losses relative to their established performance year benchmark.

LEAD aims to support the integration of Medicare and Medicaid services for patients receiving Medicare benefits through Original Medicare. The goal is to create incentives (where none currently exist) for Medicare and Medicaid healthcare providers to coordinate care and improve outcomes for dually eligible beneficiaries in Original Medicare.

During an initial planning phase from March 2026 through December 2027, CMS will identify two states that are interested in partnering to develop a framework for ACO-Medicaid partnership arrangements. This framework will help define how ACOs and Medicaid organizations can work together to share data and coordinate care to improve outcomes, including preventing avoidable hospitalizations and help patients remain engaged in their communities. Pending successful completion of the planning period, ACOs in the selected states would have the opportunity to enter partnership arrangements with Medicaid organizations.