CMS Announces New ACO Initiative: What You Need to Know About the Long-Term Enhanced ACO Design (LEAD) Model
The Centers for Medicare and Medicaid Services Innovation Center (CMMI) has officially announced the Long-term Enhanced ACO Design (LEAD) Model, a new voluntary accountable care model set to launch on January 1, 2027, following the conclusion of ACO REACH at the end of 2026.
LEAD is CMMI’s newest ACO-focused model and its longest ACO test to date, offering a 10-year performance period (2027–2036). The model is designed to expand participation in accountable care by addressing longstanding financial and administrative barriers, particularly for smaller, rural, independent practices and providers serving high-needs populations.
Applications to participate in LEAD will open in March 2026.
Why CMS Is Launching LEAD
CMS acknowledged that while prior ACO models have demonstrated improvements in care coordination and reductions in avoidable hospitalizations and emergency department use, many providers have never participated in ACOs or have exited early due to unstable benchmarks, limited upfront capital, and administrative complexity—issues that have disproportionately affected rural and independent practices.
LEAD is designed to respond to these challenges by prioritizing longer-term financial predictability, broader provider participation, and sustained investment in population health, particularly for providers that have historically faced barriers to entering or remaining in accountable care.
LEAD at a Glance
LEAD is a voluntary ACO model with a planned performance period from January 1, 2027, through December 31, 2036. The extended timeline is intended to support longer-term participation and stability for organizations engaging in accountable care.
CMS is expected to release a Request for Applications (RFA) in March 2026, giving interested organizations time to prepare ahead of the 2027 start date. The RFA is expected to include more details on the model’s financial methodology.
The model is open to a broad set of participants, including:
Current ACO REACH participants and other ACOs
Medicare fee-for-service providers that are new to ACO participation
Providers serving underserved populations, including Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs)
Overall, the model is structured to support both experienced ACOs and new entrants, with a spotlight on providers caring for high-needs populations and Medicare beneficiaries in rural areas.
Key Goals of the LEAD Model
LEAD is intended to:
Expand participation in accountable care models among small, rural, independent providers and Community Health Centers
Support evidence-based prevention and care coordination initiatives, particularly for high-needs and complex patients
Enable sustained investment in population health through longer time horizons and more predictable financial structures
These goals align with CMMI’s broader strategy to strengthen independent provider participation, promote patient choice, and support prevention and care coordination at scale.
Core Design Features
Model Structure and Risk Options
LEAD offers two voluntary, two-sided risk options:
Global Risk up to 100% shared savings and losses
Professional Risk up to 50% shared savings and losses
The model retains several fundamental elements of ACO REACH, including population-based payments, a focus on high-needs patients, and lower beneficiary alignment minimums for providers new to ACO participation. While built on the foundation of ACO REACH, LEAD includes several new features which are outlined below.
Supporting Rural and Underserved Providers
LEAD has targeted policies designed to lower barriers for rural and underserved providers, including:
Add-on payment for rural providers that are not subject to financial settlement reconciliation
Lower beneficiary alignment minimums for rural health providers
Design elements intended to better support providers caring for high-needs and dually eligible populations
Medicare–Medicaid Integration
LEAD includes a dedicated Medicare–Medicaid integration component focused on improving care for dually eligible beneficiaries. A planning phase from March 2026 through December 2027 will identify two states to develop ACO–Medicaid partnership frameworks.
Following successful completion of this planning phase, ACOs in selected states may be eligible to enter formal partnership arrangements with Medicaid organizations.
CMS-Administered Risk Arrangements (CARA)
LEAD introduces CMS-Administered Risk Arrangements (CARA), a new digital data sharing and payment platform designed to facilitate downstream, episode-based risk arrangements between ACOs and specialists.
CARA is intended to support:
Episode-level data sharing
Standardized contracting templates
Configurable episode design
Payment processing tied to episode-based arrangements
Benefit Enhancements and Beneficiary Engagement Incentives
LEAD expands the menu of optional Benefit Enhancements (BEs) and Beneficiary Engagement Incentives (BEIs), including:
Expanded Medical Nutrition Therapy beyond diabetes and renal disease for Global Risk ACOs
Part D premium buydowns beginning in 2029
Chronic disease prevention rewards tied to evidence-based programs
Substance access consultation for eligible hemp products in applicable states
Participation in these options is voluntary and will require ACOs to submit implementation plans outlining cost coverage and program safeguards.
What to Watch Next
This announcement from CMS is important in alerting organizations that a new ACO model is coming, but many of the details are yet to be announced. Coral is eagerly awaiting programmatic details that will help answer key financial and operational questions, including:
How will the benchmark methodology compare to MSSP and ACO REACH? How will they seek to address the challenges we have seen in prospectively set benchmarks in both ACO REACH and the ACPT in MSSP?
What will the model specifically offer organizations serving high needs populations, particularly home-bound patients and those in long-term care and how will it align with or depart from the High Needs Track of ACO REACH?
Will CMMI continue with primarily claims-based quality measures as they did in ACO REACH or move toward patient-reported outcome measures (PROMs) or toward the MSSP and MIPS approaches of assessing performance on all-payer populations? Will there be unique measure set for those serving high needs populations?
How will the episode-based portion of the model (CARA) actually work and what will it mean for the different types of organizations that participate in ACOs?
How Coral Can Help
As CMS prepares to open the LEAD RFA in March 2026, organizations will need to assess their value-based care strategy (e.g., diversifying model participation), readiness for long-term accountability, evaluate which risk track aligns with their capabilities, and understand the operational, financial, and partnership requirements needed to succeed.
Coral Health Advisors partners with a variety of organizations including health systems, ACOs, independent practice organizations, enablement companies and more to understand emerging CMMI models, evaluate strategic fit, apply to participate, and support decisions around participation, risk strategy, and operational management. Our team can help organizations translate LEAD’s policy intent into practical, implementable approaches that support sustainable accountable care, prevention, and coordinated services for high-needs populations.
Contact us at info@coralhealthadvisors.com to learn how we can support your organization in planning for participation in the LEAD Model.