CMS opens applications for new LEAD model

In December, CMS announced a new Medicare accountable care organization (ACO) model called LEAD. The LEAD model replaces the ACO REACH model, which was originally introduced in 2022 and will end in December 2026.

LEAD, which will begin Jan. 1, 2027, is a voluntary, 10‑year model designed to support long‑term participation in total cost‑of‑care accountability while also improving financial sustainability for organizations serving complex and high‑needs Medicare populations.

Like ACO REACH, LEAD is a two‑sided risk model offering prospective, population‑based payments and accountability for quality and cost outcomes in traditional Medicare. However, LEAD places a stronger emphasis on predictability, scalability, and durability, with design features intended to reduce churn, stabilize benchmarks over time, and better support rural providers and organizations caring for high‑needs and dual-eligible beneficiaries. 

By lowering financial and administrative hurdles, the Center for Medicare and Medicaid Innovation (CMMI) hopes to encourage participation from both new and experienced ACOs.

"LEAD is designed to make care more connected, more proactive, and more centered on what patients with Medicare truly need," said CMMI director Abe Sutton. "It focuses on long-term relationships between providers and patients, while also providing expanded flexibility to check in, regularly reach out before problems escalate and coordinate care between visits, not just during the visit."

Last month, CMS released a request for applications for the LEAD model. Interested ACOs have until May 17 to apply. CMS has also said that it expects to open subsequent application cycles but has not finalized any timing or the number of opportunities organizations will have to apply. 

Separately, Sean Cavanaugh, chief policy officer at Aledade and head of the Aledade Policy Institute, noted that the LEAD model includes features aimed at high-cost ACOs, which could help increase their participation.

The model provides a "discount" that allows high-cost ACOs to pay back a lower amount of money before receiving shared savings. It also offers high-cost participants a monthly capitated payment that can be used to invest in care coordination and other infrastructure.

"The LEAD model represents an interesting new opportunity for higher spending ACOs that has not existed in other CMS models," said Joseph Heintzelman, senior director of provider actuarial services at Optum Advisory*. "'Higher spending' ACOs will receive a monthly capitated payment to invest in infrastructure and care redesign and this payment is not reconciled at settlement. This could be a great opportunity for organizations that recognize the future necessity of VBC but have been apprehensive to join a voluntary total cost of care program."

However, Fuller noted that a challenge with LEAD is its tight application window. "Entities that have not previously participated as an ACO or do not have a significant experience taking risk, this may be exceptionally challenging," he said. "Not undoable, but it is a challenging window."

Since it's not clear when future application opportunities will be available, Fuller encourages interested organizations to apply and seek out advisors or partners to help them through the process.

"You would be best served to lean on advisors in the industry who know ACOs well, whether those are existing advisors of yours or advisors that you need to seek out," Fuller said. "I also know that there are a number of webinars that are being offered by CMS and others over the next couple of weeks, so signing up and participating in as many of those webinars, I think, is also advisable."

*Advisory Board is a subsidiary of Optum. All Advisory Board research, expert perspectives, and recommendations remain independent.