The Centers for Medicare & Medicaid Services (CMS) Innovation Center will launch the new accountable care organization (ACO) focused model at the conclusion of ACO REACH at the end of 2026.
The new model, Long-term Enhanced ACO Design (LEAD), will have a 10-year performance period. the longest CMS has ever tested. It will run from January 1, 2027, through December 31, 2026.
LEAD builds on the CMS Innovation Center’s earlier accountable care work and will use improved benchmarking to appeal to a broader mix of health care providers, including those with specialized patient populations and those new to ACOs, such as smaller, independent, or rural-based practices.
CMS said the model will offer a predictable window without rebasing and a pathway toward sustainable long-term benchmarks and savings.
LEAD will also focus on better serving coordinated care for high-needs patients, such as those dually eligible for Medicare and Medicaid, and those who are homebound or home limited.
CMS acknowledged that the previous ACO models have had difficulties. Many health care providers have not historically participated in or dropped out of ACOs because of financial and administrative obstacles to success. LEAD is designed to address these barriers to support established and newly created ACOs by providing enhanced, flexible cash flow payments as well as greater freedom and tools to support spending time with and meeting patient needs, including those with specialized care needs.
The agency wants to empower providers to deliver coordinated, accountable care and preventive services—keeping patients healthier and helping to reduce health care costs and unnecessary emergency room visits and hospitalizations.
The LEAD model will advance the Innovation Center’s commitment to build opportunities for independent health care providers and practices to be rewarded for delivering better care; promote and empower patient choice in both coverage and sites of care; and make it easier for health care providers and patients to engage in preventive care that supports healthier living.
CMS ACO models have resulted in lower hospitalizations and reduced emergency department visits but were not created for smaller, more rural, and independent practices or those that serve high-needs patients.
LEAD’s design will allow for:
Integration of high-needs patients: Support for high-needs patients, including more accurate risk adjustment and benchmarking, will be integrated across all ACOs, creating an incentive for more providers to develop the capabilities to care for patients with complex needs. At the same time, organizations that specialize in care for complex, chronic populations will be able to care for more of their patient population under an accountable care framework.
Two voluntary risk-sharing options: Participants will be eligible to either take on:
- Global risk: Eligible to receive up to 100 percent of their savings and liable for up to 100 percent of total losses relative to their established performance benchmark.
- Professional risk: Eligible to receive up to 50 percent of total savings and liable for up to 50 percent of total losses relative to their established performance year benchmark.
Healthy living flexibilities: The model offer participants the option of benefit enhancements and beneficiary engagement incentives that support the delivery of coordinated, proactive, and preventive care. This includes tools for ACOs to encourage beneficiaries to seek care from high-value providers, including Part B cost sharing support and, by 2029, a Part D premium buy down.
Medicaid integration: 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 health care 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.
CMS Administered Risk Arrangements (CARA): This initiative will provide robust 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 health care providers. In addition, CARA will feature an episode-based falls prevention program.
CMS said it anticipates that LEAD participant providers will include:
- Current ACO REACH Model participants and other ACOs.
- Current Medicare fee-for-service health care providers that have historically not participated in ACOs.
- Health care providers serving underserved populations, such as those with a high proportion of dually eligible individuals, federally qualified health centers, and rural health clinics.
ACOs can apply to participate in the model by responding to a Request for Applications beginning in March 2026.