The Centers for Medicare and Medicaid Services (CMS) just announced a new accountable care model that could reshape how care is delivered to Medicare beneficiaries over the next decade. The Long-term Enhanced ACO Design (LEAD) Model launches January 1, 2027, replacing ACO REACH when it concludes at the end of 2026.
What Makes LEAD Different
CMS designed this model to run for 10 years, which is the longest performance period CMS has ever tested. This structure is intended to provide greater stability for participants by reducing the need for frequent rebasing that undermines long-term planning and diminishes the value of efficiency gains.
The LEAD model uses improved benchmarking, prospective payments, and other innovative policies to attract a larger variety of participants, especially rural practices that will receive an add-on payment to their benchmarks. CMS built LEAD specifically to address barriers that have kept smaller, independent, and rural practices out of accountable care models.
Who This Model Targets
The Long-term Enhanced ACO Design Model appeals to a broader mix of healthcare professionals, including those with specialized patient populations and those new to ACOs. This model also focuses on serving high-needs patients better, particularly those who are dually eligible for Medicare and Medicaid, homebound, or home-limited.
Risk Sharing Options
Participating organizations can choose between two voluntary risk-sharing options based on risk tolerance and experience with accountable care:
- Global Risk: Eligible to receive up to 100% of total savings and take on up to 100% of total losses.
- Professional Risk: Eligible to receive up to 50% of total savings and take on up to 50% of total losses.
Medicaid Integration
To tackle the persistent issue of fragmented care for dual-eligible beneficiaries, LEAD offers incentives for coordination of care across Medicare and Medicaid providers. During the planning phase from March 2026 through December 2027, CMS will identify two states to develop a framework for ACO-Medicaid partnership arrangements. This framework will define how ACOs and Medicaid organizations share data and coordinate care to improve outcomes, including preventing avoidable hospitalizations.
Beneficiary Engagement Features
This model includes new Benefit Enhancements and Beneficiary Engagement Incentives to reward beneficiaries for seeking care from providers in ACOs, including Part B cost-sharing support and, by 2029, a Part D premium buy-down. These incentives attract and retain patients in ACOs, while providing them with real financial benefits for choosing coordinated care.
Support for Rural and Small Practices
CMS has structured specific provisions to help small and rural providers participate. This model offers an add-on payment that will not be reconciled, helping fund the necessary infrastructure to operate as an ACO. LEAD also allows lower beneficiary alignment minimums for ACOs with health care providers new to ACOs, removing a major barrier for smaller practices.
CMS Administered Risk Arrangements (CARA)
The CARA initiative will provide CMS support to ACOs, enabling episode-based risk arrangements between ACOs and specialists to facilitate stronger preferred provider relationships. CARA functions as a digital data-sharing and payment system that reduces implementation barriers when providers want to establish meaningful financial and clinical relationships with specialists. It also features an episode-based falls prevention program.
Next Steps
When evaluating the LEAD model, consider these questions:
- Can your organization commit to a 10-year model?
- Which risk track aligns with your experience and organizational capacity?
- Do you serve enough high-needs or dual-eligible patients to benefit from the improved risk adjustment?
- If you are a rural or smaller practice, how will you use the infrastructure support?
- Is your state participating in the Medicaid integration pilot?
Earlier ACO models were not built for smaller, rural, and independent practices or those serving high-needs patients. LEAD changes that with predictable benchmarks over a decade, better risk adjustment for complex patients, infrastructure support for smaller practices, and pathways to coordinate care across Medicare and Medicaid.
This model represents CMS’s most comprehensive attempt to make accountable care work for a broader range of providers and patients. If previous ACO models didn’t work for your practice, LEAD deserves a serious look.