罢丑别听听represents the next major step in the Centers for Medicare & Medicaid Services (CMS)听听strategy and reinforces a federal commitment to value-based participation in Traditional Medicare. Announced as the successor to听, LEAD is a voluntary, nationwide, 10鈥憏ear model that will operate from 2027 to 2036, making it the longest-running accountable care organization (ACO) model the Center for Medicare and Medicaid Innovation has tested.
Momentum around the LEAD ACO model has accelerated since CMS鈥檚 recent release of the (RFA), which formally moves LEAD from policy design to implementation. The RFA requires prospective participants to evaluate program design choices, financial implications, and operational readiness on a compressed timeline. Notably, CMS has indicated that additional opportunities to express interest will follow for organizations that are not prepared to apply for participation in the initial cohort.
This article explains key design elements of the LEAD model and identifies considerations for organizations assessing whether and when to pursue participation in LEAD.
Core Design Evolutions of the LEAD Model
While LEAD builds on many of the elements from ACO REACH, its design reflects how the Innovation Center intends to address challenges with previous ACO models, such as the Medicare Shared Savings Program (MSSP). At its core, LEAD seeks to establish a pathway to long鈥憈erm engagement in value-based care that creates an attractive option for all types of providers, including ACOs with a history of engaging in value-based care and providers that have yet to meaningfully participate.
LEAD introduces a set of targeted design changes intended to improve predictability, alignment accuracy, and long鈥憈erm participation in accountable care鈥攎ost notably through revised benchmarking, updated beneficiary alignment, and expanded flexibility for engaging specialists and high鈥憂eeds populations.
1. Revising Benchmarking Policies to Support Predictability and Success
- LEAD provides a major win for ACOs seeking long-term predictability by听setting a long-term benchmark that will not rebase for the entirety of the 10-year model. In MSSP, many ACOs eventually face the 鈥渞atchet effect鈥� in which benchmarks erode after rebasing to reflect the ACO鈥檚 more recent spending patterns. It can create a significant hurdle for ACOs that have already successfully reduced spending, as their own prior success lowers their benchmark. By not rebasing for the entirety of the model period, LEAD provides an attractive alternative to the MSSP, which rebases every five years.
- LEAD will also support historically successful ACOs by transitioning to a fully regional rate book by the end of the model period. As a result, benchmarks will be set based on overall spending in the region where an ACO operates rather than an ACO鈥檚 historical spending. While ACO REACH also used a regional rate book to inform some ACO benchmarks, LEAD goes further by seeking to transition all ACOs to a benchmark based听fully听on a regional rate book while also adding protections for higher-spending ACOs by transitioning regions at different timelines to ensure that newer ACOs have the opportunity to implement the kinds of care delivery changes that lead to lower spending before they are subject to penalties.
- Other notable changes to benchmarking include a variety of ACO-specific adjustments and the addition of an administrative component to benchmarking.听ACOs will be eligible to receive a boost to their benchmarks with either a regional efficiency adjustment for ACOs with lower spending or a prior savings adjustment for ACOs with a demonstrated history of achieving savings. LEAD also introduces an administratively set component to benchmarking鈥攖he Accountable Care Prospective Trend鈥攚hich already is used in the MSSP, though LEAD adds a new guardrail policy to promote predictability.
2. Improving Accuracy in Beneficiary Alignment
- LEAD鈥檚 new 鈥渉ybrid鈥� alignment option increases accuracy and responsiveness.听Monthly additions of voluntarily aligned beneficiaries and mid-year recognition of new participant taxpayer identification numbers (TINs) adopted after the start of the performance year (PY) allow alignment to better reflect real-time care relationships, averting lag and operational friction.
3. Adding Support for High-Needs Beneficiaries
- LEAD expands support for beneficiaries with complex needs through a universal High Needs category and recalibrated risk adjustment.听By moving away from ACO REACH鈥檚 population鈥慹xclusive model, LEAD lowers barriers for organizations that serve a disproportionate share of high鈥憂eeds and dually eligible populations. In addition, CMS will test Medicare鈥慚edicaid alignment in two states, and help states develop arrangements supporting the provision of value-based care between ACOs and state Medicaid agencies or managed care organizations.
4. Promoting Deeper Engagement with Specialists
- LEAD increases flexibility for engaging specialists in value鈥慴ased arrangements.听New Non鈥慞rimary Care Capitation options and episode-based risk arrangements (CMS鈥慉dministered Risk Arrangements (CARAs)), allow ACOs to share risk with specialists without Total Care Capitation, reducing operational complexity while expanding accountability beyond primary care.
5. Advancing Technology Adoption and Innovation
- LEAD introduces structured pathways to promote technology adoption.听Planned Artificial Intelligence (AI)鈥慽nferred risk adjustment will be phased in following successful testing and validation, while the Tech Enabler Initiative and Rapid Cycle Innovation Program seek to reduce administrative burden and accelerate evidence generation鈥攑articularly for smaller or resource鈥慶onstrained ACOs.
Next Steps
The Innovation Center is operating on an accelerated timeline for the initial LEAD cohort. Prospective ACOs have fewer than 50 days to digest a detailed and model potential performance. Applications are due May 17, 2026. ACOs that participated in ACO REACH in PY 2026 will be well-positioned, as many of the provisions in LEAD will be familiar, and the agency is permitting this group of ACOs to submit an abbreviated application for participation.
For organizations not ready to apply for the first cohort, CMS will release a standardized Letter of Interest form by April 17, 2026, to gauge interest in future application rounds. In this context, organizations considering LEAD participation should be assessing not only near鈥憈erm application readiness, but also longer鈥憈erm strategic alignment with the model鈥檚 10鈥憏ear commitment, risk structure, and operational requirements. Key considerations include benchmarking predictability, readiness to manage regional benchmarks, capacity to engage specialists and high鈥憂eeds beneficiaries, technology capabilities, and alignment with broader value鈥慴ased care strategies across Medicare and Medicaid.
Connect with Us
黑料不打烊 (黑料不打烊), supports organizations across the LEAD decision continuum, including those pursuing immediate application and those preparing for future cohorts. 黑料不打烊 can help organizations:
- Interpret LEAD鈥檚 policy and financial design relative to existing ACO and MSSP participation
- Model performance scenarios under alternative benchmark, alignment, and risk configurations
- Assess operational readiness across care management, contracting, analytics, and compliance
- Develop application strategies and supporting materials, including responses to the LEAD RFA
- Choose to defer application on steps that preserve future optionality
As CMS advances LEAD under an ambitious timeline, early analysis and disciplined decision鈥憁aking will be critical for organizations seeking to align participation with their long鈥憈erm value鈥慴ased care strategies.
For questions contact Amy Bassano and Rebecca Nielsen.
