LEAD (Long-term Enhanced ACO Design) Model

CMS ACO models have shown potential to enhance aspects of care and reduce costs. ACO Models have resulted in lower hospitalizations and reduced emergency department visits and reduced other avoidable high-cost care for their patients. However, earlier models were not constructed for smaller, more rural, and independent practices or those that serve high-needs patients.

LEAD is designed to be more inclusive of these types of provider practices, with improved benchmarks, prospective payments, and other innovative policies that even the playing field and by extension allow for more people, including those with complex health needs, to benefit from better coordinated, accountable care. LEAD also includes design features that put more focus on preventive care to support healthier aging and gives health care providers expanded flexibility to check in with patients regularly, reach out before problems escalate, and coordinate care that happens between visits — not just during them.

LEAD incorporates key features aligned with the Innovation Center strategy to promote evidence-based prevention, support patient empowerment, and drive choice and competition.

Aims

LEAD aims to:

• Increase the scope of ACOs — to include more small, more rural, and more independent health care providers and Community Health Centers.
• Enhance evidence-based prevention and care coordination for more patients, including those with high-needs.
• Empower patients to be more actively involved in their care.

Innovation

LEAD will better support health care providers and expand participation in ACOs through:

• A 10-year pathway toward sustainable benchmarks.
• Flexible, capitated population-based payments to support team-based care and downstream value-based care arrangements.
• Integration of care for special populations, including patients with complex needs and dually eligible beneficiaries.

Additional innovations 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.

Design

LEAD includes key design features:

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:

• 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.

Healthy living flexibilities: Will 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): The CARA 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 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.

How will LEAD support rural health care providers?

LEAD will support rural health care providers by:

• Offering an add-on payment that would not be reconciled to help them create necessary infrastructure to be in an ACO.
• Allowing lower beneficiary alignment minimums for ACOs with health care providers new to ACOs, including rural health care providers.

Including health care providers who treat dually eligible beneficiaries through a Medicaid integration component to the model.

What is the CMS Administered Risk Arrangement (CARA) initiative?

The CARA initiative is a digital data-sharing and payment system designed as a voluntary, modular component of total cost of care (TCOC) models and programs that reduces implementation barriers for ACOs seeking to establish meaningful financial and clinical relationships with Preferred Providers, or downstream specialists and provider organizations. Initially tested within LEAD among ACOs that maintain two-sided risk, CARA’s flexible design enables potential scaling to other TCOC contexts based on demonstrated success and market uptake.

CARA creates a structured yet flexible framework to support ACO development of customized risk-sharing arrangements with Preferred Providers without driving consolidation. The initiative does this by: (1) sharing episode data with ACOs and the Preferred Providers with whom they enter into episode-based risk arrangements (EBRAs), (2) providing common contracting frameworks by enabling export of episode information into contracting templates, (3) allowing for configurable episode design, and (4) making payment to ACOs and Preferred Providers based on their EBRAs.

How is LEAD supporting Medicare-Medicaid integration for ACOs?

 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.

How will the LEAD Model make Americans healthy again?

The LEAD Model will make Americans healthy again by strengthening primary care through prospective, capitated payments that support preventive and proactive care and by holding ACOs accountable for clinically meaningful quality measures focused on prevention and chronic disease management. As part of LEAD, ACOs would also have the flexibility and support needed to design prevention initiatives that address the needs of the population they serve (e.g., chronic disease management, falls prevention). In addition, the LEAD Model will also include Benefit Enhancements (or Medicare waivers) and Beneficiary Engagement Incentives that promote and support healthy living activities, such as healthy eating, physical activity, and stress management.

What new Benefit Enhancements (BEs) will be included in LEAD?

• Medical Nutrition Therapy: Through this Benefit Enhancement, CMS would expand the conditions for which beneficiaries may receive covered Medical Nutrition Therapy, beyond diabetes or renal disease, for Medicare beneficiaries in LEAD ACOs taking full risk. This Benefit Enhancement would expand coverage for Medical Nutrition Therapy among beneficiaries with other diet-sensitive conditions thus supporting the management of chronic diseases and promoting a healthier lifestyle among Medicare beneficiaries.
• Part D Premium Buydown: Through this Benefit Enhancement, CMS would allow qualifying ACOs to partially or fully offset a beneficiary’s Part D premium for a given model performance year by 2029. This Benefit Enhancement would reduce cost-related burdens associated with accessing Part D drugs while improving health outcomes.

What new Beneficiary Engagement Incentives (BEIs) will be offered through LEAD?

New BEIs available under the LEAD Model include:

• Chronic Disease Prevention Reward: This BEI would enable ACOs to offer healthy food products to support beneficiaries’ health as beneficiaries engage in healthy living activities (e.g., exercising) and participate in evidence-based programs that support the prevention and management of chronic diseases.
• Substance Access BEI: This BEI would enable ACOs and their health care providers to consult with their aligned patients about the possible benefits of hemp products, which would be at the ACO’s expense and only in states where such products are legal.

LEAD ACOs will have the choice of whether to implement any or all the BEs and BEIs offered under the model. Acceptance into LEAD is NOT contingent upon an ACO agreeing to implement any BE or BEI. LEAD ACOs that choose to implement BEs and/or BEIs must provide CMS with a proposed implementation plan for each BE or BEI it plans to offer, including how they will cover the cost of the services or products.

What is the Substance Access BEI and where is it available?

The Substance Access BEI gives model participants the option of consulting with their patients about the possible use of eligible hemp products. The implementation of this BEI and any related dispensing would be funded entirely at the participant’s expense; CMS would not cover the cost of such products. Further, CMS will have strict program integrity safeguards to ensure that these incentives do not result in program or patient abuse.

The Substance Access BEI is only available to participants in states where the eligible hemp products are considered legal.

The Substance Access BEI is also being made available to participants in the ACO REACH Model in performance year 2026 and the Enhancing Oncology Model starting in performance period 6.

• ACO REACH Model