On December 18, 2025, the Centers for Medicare & Medicaid Services (CMS) Innovation Center announced the Long-term Enhanced ACO Design (LEAD) Model, a voluntary accountable care organization (ACO) initiative set to launch January 1, 2027, following the conclusion of the ACO REACH model at the end of 2026.
Building upon lessons learned by CMS under ACO REACH, the LEAD Model represents CMS’s most ambitious ACO initiative to date, offering a decade-long performance horizon and a renewed focus on expanding participation among small, independent and rural providers, and providers that serve high-needs patients, such as dually eligible and homebound beneficiaries. To help support expanded ACO participation, CMS expects the model to offer enhanced cash flow payments, improved risk adjustment and benchmarking, and allow for lower alignment minimums for providers new to ACOs. Examples include an “add-on” payment to support rural and smaller providers that would not be reconciled as part of the LEAD Model to support infrastructure for ACO participation.
Consistent with the current administration’s priorities, the LEAD Model also emphasizes engaging patients to be more actively involved in their care. CMS anticipates, for example, offering benefit enhancements and beneficiary engagement incentives that encourage beneficiaries to seek care from ACO participants, including Part B cost-sharing support and, by 2029, a Part D premium buy-down.
Other enhancements and incentives will be designed to promote healthy eating, physical activity and stress management, including expanded access to medical nutrition therapy and providing chronic disease prevention rewards. And, dovetailing off of President Trump’s executive order calling for marijuana to be reclassified as a Schedule III drug under the Controlled Substances Act, the LEAD Model would also include an engagement incentive that would enable ACOs and their providers to consult with aligned beneficiaries about the possible benefits of hemp products in states where such products are legal. (A similar hemp-related enhancement was also announced for ACO REACH and the Enhancing Oncology models.)
Key features of the LEAD Model include the following:
- Duration: 10-year voluntary model (January 1, 2027 – December 31, 2036), the longest CMS has ever tested.
- Participant Providers: CMS anticipates LEAD Model participant providers will include current ACO REACH model participants and other ACOs; Medicare Parts A/B providers that have not historically participated in ACOs; and providers serving underserved populations.
- Risk Sharing: Similar to ACO REACH, the LEAD Model will offer “global” and “professional” risk options, under which ACOs will be eligible to up to 100% of their savings and liable for up to 100% of total losses relative to their established benchmark in the global option, and up to 50% of shared savings or losses under the professional option.
- Medicaid Integration: The LEAD Model aims to support the integration of Medicare Part A/B and Medicaid services. During an initial planning phase from March 2026 through December 2027, CMS will identify two states interested in developing a framework for ACO-Medicaid partnership arrangements.
- CMS Administered Risk Arrangements (CARA): The CARA initiative, a digital data-sharing and payment system, will provide CMS support to ACOs to enable episode-based risk arrangements between ACOs and specialists and provider organizations to help ACOs develop more robust preferred provider relationships. In addition, CARA will feature an episode-based falls prevention program. CMS also noted that the CARA initiative will be initially tested in the LEAD Model with the potential of being rolled out as a voluntary, modular component of other total cost of care models and programs.
ACOs can apply to participate in the model by responding to CMS’s Request for Applications, which is expected to be released in March 2026.
For more information about the LEAD Model, please contact the authors.