LEAD-ing the Future of ACOs: New Long-term Enhanced ACO Design Model

The Centers for Medicare & Medicaid Services (CMS) Innovation Center has announced the Long-term Enhanced ACO Design (LEAD) Model — a 10-year initiative designed to advance value-based care for Medicare beneficiaries, particularly those with complex needs. The LEAD Model aims to remove longstanding barriers to provider participation, foster innovation, and improve health outcomes for vulnerable populations. 

The LEAD Model represents a pivotal opportunity for providers and organizations already participating in the Medicare Shared Savings Program (MSSP) or Accountable Care Organization (ACO) REACH Model. The Model offers a 10-year window of financial predictability, enabling long-term strategic planning and investment in care delivery innovations, care management, and target patient populations. The Model’s enhanced benchmarking, flexible payment options, and focus on high-needs populations provide new opportunities to deepen existing value plays in care coordination, data analytics, and risk management into multi-year strategies with the aim of improving quality and patient outcomes while decreasing costs. 

The LEAD Model 

Set to launch on January 1, 2027, the LEAD Model will replace the current ACO REACH program, which concludes at the end of 2026. This transition marks a significant evolution in CMS’s approach to accountable care, offering a decade-long performance period — the longest ever tested by CMS. The extended timeframe provides organizations with the stability needed to plan, invest, and innovate in care delivery.

Key Design Features

The LEAD Model intends to strengthen long-term patient-provider relationships by offering sustainable benchmarks and flexible payments to support care coordination and preventive services. Additionally, the LEAD Model prioritizes high-needs populations and encourages participation from smaller, independent, and rural practices. Specific LEAD Model design features include: 

• Integration of High-Needs Patients. LEAD integrates support for high-needs patients by improving risk adjustment and benchmarking, encouraging providers to develop capabilities for complex care.
• Two Voluntary Risk-Sharing Options.The Lead Model offers two voluntary risk-sharing models: Global Risk, which allows up to 100% of savings and losses, and Professional Risk, which allows up to 50%.
• Healthy Living Flexibilities. Participants can access healthy living flexibilities, including Benefit Enhancements and Beneficiary Engagement incentives that promote preventive, coordinated care, with Part B cost-sharing support and a Part D premium buy-down by 2029.
• Medicaid Integration. LEAD fosters Medicare-Medicaid integration in select states and introduces CMS Administered Risk Arrangements (CARA), a digital data-sharing and payment system to enable episode-based partnerships and falls prevention programs.

Who Can Apply? 

Eligible applicants include current ACO REACH participants, other existing ACOs (such as MSSP entities), and Medicare providers — including physician groups, health systems, Federally Qualified Health Centers (FQHCs), Rural Health Clinics (RHCs), and organizations serving high-needs or dually eligible populations.

Implications for Applicants

The LEAD Model’s structure is intended to address financial and administrative obstacles, two major barriers that have limited provider participation in previous ACO models. By providing enhanced, flexible payments and emphasizing coordinated, preventive care, LEAD empowers organizations to invest in infrastructure, data analytics, and interdisciplinary teams. 

Providers and organizations will need to:

• Assess readiness for capitated, population-based payments and care coordination.
• Identify and address gaps in capabilities in serving high-needs patient groups.
• Monitor CMS for the Request for Applications, which opens in March 2026.

Notably, the LEAD Model encourages expanding care coordination initiatives to complex patients. In particular, participants may opt into the new CARA to enable episode-based risk arrangements with specialists and preferred providers. Specific CARA episode parameters are expected in CMS’s forthcoming technical materials. Identifying speciality partners and exploring care coordination processes will assist participants when that option becomes available.

Strategic Outlook & Conclusion

The LEAD Model represents a major step forward in the evolution of accountable care by expanding value-based care opportunities for a broad array of physicians, including community health centers and rural health care providers, who previously struggled to participate in ACOs. 

The LEAD Model underscores the CMS Innovation Center’s focus on proactive, clinically connected care, particularly between primary care providers and specialists, to keep patients at their healthiest. 

By preparing now, providers and organizations can position themselves for success in a rapidly changing health care landscape and help shape the future of value-based care.

At Foley, we are actively advising providers across the country on how to respond to this evolving legal landscape. From policy development and compliance strategy to enforcement defense, we are here to help. Please reach out to the authors, your Foley relationship partner, or to our Health Care Practice Group and Health Care & Life Sciences Sector with any questions.