CMS LEAD Model: Request for Applications Released

Firm Publication

On March 31, the Centers for Medicare & Medicaid Services (CMS) Innovation Center released the much anticipated Request for Applications (RFA) for the Long‑term Enhanced Accountable Care Organization Design (LEAD) Model, a voluntary accountable care model that will succeed ACO REACH when that model concludes at the end of 2026. As CMS previewed when it announced LEAD in December 2025, the LEAD Model is intended to offer long‑term stability, enhanced cash flows, and broader participation opportunities for both experienced and new accountable care organizations (ACOs).

The LEAD Model will launch immediately following the conclusion of ACO REACH, and continuity of participation for current ACO REACH organizations is a central CMS goal of the LEAD Model design. CMS has indicated that ACOs must apply by May 17, 2026, to begin participation in LEAD on January 1, 2027.

LEAD Model Overview

As discussed in our prior analysis, the LEAD Model is a 10‑year voluntary demonstration, with a duration running from January 1, 2027, through December 31, 2036.  By having an extended timeline—longer than any previous ACO model tested by the CMS Innovation Center—CMS intends to give participants a stable runway to make population health investments and pursue long‑term care transformation without frequent benchmark rebasing.

Through its new benchmarking parameters (which are yet to be finalized), and other unique features informed by the current administration’s goals and prior Innovation Center efforts—including ACO REACH, the Next Generation Model, and the Medicare Shared Savings Program—the LEAD Model is specifically designed to achieve the following goals:

  1. Attract providers that have had limited participation in ACOs.
  2. Encourage providers to deliver preventive care.
  3. Empower beneficiaries to adopt healthy lifestyles and be more actively engaged in their care (including through cost-sharing support for Part B services and a Part D premium buydown beginning in 2029).
  4. Support providers who serve individuals with “high needs” and dual eligibility in Medicare and Medicaid.

To help achieve these goals, the LEAD Model is specifically designed to attract providers to ACOs whose beneficiaries have higher Medicare costs compared to other beneficiaries in the same region (and which, therefore, have the greatest opportunity to produce savings). In addition, the LEAD Model includes elements to help ACOs engage specialists through flexible payment and risk arrangement options.  

Key Differences Between the ACO REACH Model and the LEAD Model

The LEAD Model introduces several significant changes as compared to ACO REACH that stakeholders and prospective ACO participants should carefully evaluate, including the following:

CMS Administered Risk Arrangements (CARA)

One of the most significant innovations in the LEAD Model is the introduction of the CARA initiative, which allows – but does not require – ACOs that have elected the Global Risk Option to establish downstream episode-based risk arrangements (EBRAs) with specialists and provider organizations who are Preferred Providers, with CMS administering the associated payments based on the terms negotiated between the ACO and the providers. In addition to a “Default Approach” that uses standardized episode-based cost measures and methodologies, ACOs participating in CARA can also choose a “Max Flex Option” that allows customized episode construction parameters (e.g., trigger codes, episode length, and exclusions). CARA also introduces the Resilience and Independence in a Safe Environment (RISE) to Age in Place episode, which incorporates time-limited home-based interventions designed to reduce fall risk and enable aging in place (e.g., through coordinated care delivery by occupational therapists, registered nurses, and, when needed, handypersons for structural improvements of up to $2,500).

Non-Primary Care Capitation Payment Mechanism

While preserving ACO REACH capitation and Advanced Payment Option (APO), the LEAD Model also introduces a new option, Non-Primary Care Capitation (NPCC), to extend capitation to specialty services beyond primary care. Unlike the APO mechanism, which operates as an advance on expected fee-for-service spending that is eventually reconciled against actual fee-for-service spending, the NPCC is a true prospective capitation payment. As a result, under NPCC, the ACO (or its downstream providers) assumes risk for any additional expenses for these services above the capitated amount, depending on the risk track. CMS noted that these “sub-capitated arrangements” are being brought to traditional Medicare for the first time and are similar to what is currently available under many Medicare Advantage value-based arrangements.

TIN-Based Participant Provider Approach

The LEAD Model also shifts ACO Participant Providers to a “whole TIN” participation approach, similar to the Medicare Shared Savings Program. This is a deviation from ACO REACH, which identified participant providers at the TIN-NPI combination level. With this change, every provider billing under the participating TIN is automatically included in the LEAD ACO’s alignment, capitation, and quality reporting obligations. This automatic inclusion could create complications for larger ACO Participant Providers with a variety of different provider types, especially if they are already in the ACO REACH model and rely on the current TIN-NPI construct to optimize performance. Although the RFA indicates that ACOs and providers may still create new TINs to participate in the LEAD Model, this approach can create additional administrative and compliance challenges, as well as result in the new TIN having a lack of billing history for purposes of claims-based alignment. By contrast, Preferred Providers in the LEAD Model will continue to be identified at the TIN-NPI level. CMS also noted, however, that NPIs billing under Participant Provider TINs may still participate in another model through a different TIN that is not being used for the LEAD Model.

 Mid-Year Participant TIN Additions and Hybrid Beneficiary Alignment

Unlike ACO REACH, the LEAD Model introduces a mid-year Participant TIN addition option that allows ACOs one opportunity during any given performance year to add new Participant TINs and, as a result, the beneficiaries associated with those newly added TINs become aligned to the ACO. This mid-year update is available to ACOs that have selected Hybrid Alignment and is based on a “second-look” of the same one-year lookback period used for prospective claims-based alignment. CMS intended for this updated process to ease the burden associated with administrative errors (e.g., inaccurate identifiers, omissions, etc.) and encourage new ACO participation by providers.

Benefit Enhancements (BEs) and Beneficiary Engagement Incentives (BEIs)

In addition to retaining or expanding existing enhancements and incentives, the LEAD Model introduces new BEs and BEIs. For example, the Medical Nutrition Therapy (MNT) Benefit Enhancement will expand MNT reimbursement for ACOs in the Global Risk Option to include beneficiaries diagnosed with pre-diabetes and hyperlipidemia. CMS is also considering additional BEs and BEIs for future performance years, including a Part D Premium Buydown Incentive that may be introduced in 2029. In addition, CMS is considering an Annual Wellness Visit (AWV) flexibility that would cover AWVs on a calendar-year rather than a 12-month basis, which could ease administrative burdens associated with tracking these deadlines.

High Needs Beneficiary Integration

Another shift in the LEAD Model is the incorporation of “High Needs” beneficiaries across all participating LEAD ACOs. Under ACO REACH, High Needs Population ACOs were a distinct participant type that could only align beneficiaries meeting specific eligibility criteria. The LEAD Model provides more flexibility to allow ACOs focused on High Needs beneficiaries to align any Medicare fee-for-service beneficiary while also treating their High Needs beneficiaries as a distinct population category with a separate risk adjustment, PBPM benchmark, and trend factor. Additionally, ACOs serving a high proportion of High Needs beneficiaries (i.e., more than 40% of their aligned beneficiaries) and meeting other criteria will benefit from lower alignment minimums. ACOs seeking to qualify as High Needs ACOs must include this in their application with a description of how it will meet the eligibility criteria.

Medicare-Medicaid Integration Pilot

The LEAD Model will also introduce a new Medicare-Medicaid integration component, aimed at addressing the fragmented care experienced by the approximately 30% to 50% of dually-eligible beneficiaries who access Medicare through traditional Medicare rather than managed care. During an initial planning phase from March 2026 through December 2027, CMS will select two “DUAL states” and work to develop a framework for partnership arrangements between LEAD ACOs and state Medicaid agencies (SMAs), or Medicaid managed care organizations (MCOs). The states will be selected based on criteria such as the size and cost of dual-eligible populations, regional Medicare cost growth, ACO penetration, and disposition toward integrated care. Following that planning phase, ACOs in the selected states could enter into partnership agreements with the applicable MCOs or SMAs that would define roles and responsibilities for dually-eligible beneficiaries, articulate care coordination strategies, establish bilateral risk-sharing arrangements across Medicare and Medicaid, and set terms for improved data sharing.

Updated Benchmarking

CMS introduced a new benchmarking methodology under the LEAD Model, which is designed to improve long-term financial stability for participating ACOs and address the “ratchet effect” that has been a recurring concern in prior ACO models. To do this, the LEAD Model will maintain consistent benchmarks without re-basing and an ACO’s three-year historical baseline period will remain fixed for the duration of its participation in the LEAD Model.

LEAD Model Application Process

The LEAD Model application portal is open and will remain so until 11:59 PM ET on May 17, 2026. All ACOs accepted under the RFA for participation beginning in Performance Year (PY) 2027 will have the opportunity to participate in an implementation period from September 15, 2026, through December 31, 2026. The implementation period is intended to provide ACOs joining the LEAD Model with an opportunity to conduct voluntary alignment activities in preparation for meeting the applicable beneficiary alignment minimum (which varies based on the ACO type and performance year) at the start of PY 2027.

Based on the RFA, applicants must demonstrate, among other things:

  • Organizational and governance capacity to operate an ACO over a 10‑year period.
  • Financial and operational readiness to assume downside risk.
  • Experience or planned investments in care coordination, data analytics, and population health management.
  • Alignment strategies for engaging providers and beneficiaries, particularly in underserved or high‑needs populations.

ACOs currently participating in the ACO REACH model in PY 2026 are eligible to submit an abbreviated application for the LEAD Model. Additionally, organizations and ACOs that are interested in future LEAD Model application cohorts can submit a letter of interest to CMS by April 20, 2026, which the agency will use to gauge the level of interest in future application cycles.

CMS has stated that application review will focus not only on technical compliance but also on an applicant’s ability to advance the LEAD Model’s goals of long‑term stability, equity, and improved outcomes.

If you have any questions regarding the LEAD Model or how to apply, please contact the authors.

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Firm Publication

On March 31, the Centers for Medicare & Medicaid Services (CMS) Innovation Center released the much anticipated Request for Applications (RFA) for the Long‑term Enhanced Accountable Care Organization Design (LEAD) Model, a voluntary accountable care model that will succeed ACO REACH when that model concludes at the end of 2026. As CMS previewed when it announced LEAD in December 2025, the LEAD Model is intended to offer long‑term stability, enhanced cash flows, and broader participation opportunities for both experienced and new accountable care organizations (ACOs).

The LEAD Model will launch immediately following the conclusion of ACO REACH, and continuity of participation for current ACO REACH organizations is a central CMS goal of the LEAD Model design. CMS has indicated that ACOs must apply by May 17, 2026, to begin participation in LEAD on January 1, 2027.

LEAD Model Overview

As discussed in our prior analysis, the LEAD Model is a 10‑year voluntary demonstration, with a duration running from January 1, 2027, through December 31, 2036.  By having an extended timeline—longer than any previous ACO model tested by the CMS Innovation Center—CMS intends to give participants a stable runway to make population health investments and pursue long‑term care transformation without frequent benchmark rebasing.

Through its new benchmarking parameters (which are yet to be finalized), and other unique features informed by the current administration’s goals and prior Innovation Center efforts—including ACO REACH, the Next Generation Model, and the Medicare Shared Savings Program—the LEAD Model is specifically designed to achieve the following goals:

  1. Attract providers that have had limited participation in ACOs.
  2. Encourage providers to deliver preventive care.
  3. Empower beneficiaries to adopt healthy lifestyles and be more actively engaged in their care (including through cost-sharing support for Part B services and a Part D premium buydown beginning in 2029).
  4. Support providers who serve individuals with “high needs” and dual eligibility in Medicare and Medicaid.

To help achieve these goals, the LEAD Model is specifically designed to attract providers to ACOs whose beneficiaries have higher Medicare costs compared to other beneficiaries in the same region (and which, therefore, have the greatest opportunity to produce savings). In addition, the LEAD Model includes elements to help ACOs engage specialists through flexible payment and risk arrangement options.  

Key Differences Between the ACO REACH Model and the LEAD Model

The LEAD Model introduces several significant changes as compared to ACO REACH that stakeholders and prospective ACO participants should carefully evaluate, including the following:

CMS Administered Risk Arrangements (CARA)

One of the most significant innovations in the LEAD Model is the introduction of the CARA initiative, which allows – but does not require – ACOs that have elected the Global Risk Option to establish downstream episode-based risk arrangements (EBRAs) with specialists and provider organizations who are Preferred Providers, with CMS administering the associated payments based on the terms negotiated between the ACO and the providers. In addition to a “Default Approach” that uses standardized episode-based cost measures and methodologies, ACOs participating in CARA can also choose a “Max Flex Option” that allows customized episode construction parameters (e.g., trigger codes, episode length, and exclusions). CARA also introduces the Resilience and Independence in a Safe Environment (RISE) to Age in Place episode, which incorporates time-limited home-based interventions designed to reduce fall risk and enable aging in place (e.g., through coordinated care delivery by occupational therapists, registered nurses, and, when needed, handypersons for structural improvements of up to $2,500).

Non-Primary Care Capitation Payment Mechanism

While preserving ACO REACH capitation and Advanced Payment Option (APO), the LEAD Model also introduces a new option, Non-Primary Care Capitation (NPCC), to extend capitation to specialty services beyond primary care. Unlike the APO mechanism, which operates as an advance on expected fee-for-service spending that is eventually reconciled against actual fee-for-service spending, the NPCC is a true prospective capitation payment. As a result, under NPCC, the ACO (or its downstream providers) assumes risk for any additional expenses for these services above the capitated amount, depending on the risk track. CMS noted that these “sub-capitated arrangements” are being brought to traditional Medicare for the first time and are similar to what is currently available under many Medicare Advantage value-based arrangements.

TIN-Based Participant Provider Approach

The LEAD Model also shifts ACO Participant Providers to a “whole TIN” participation approach, similar to the Medicare Shared Savings Program. This is a deviation from ACO REACH, which identified participant providers at the TIN-NPI combination level. With this change, every provider billing under the participating TIN is automatically included in the LEAD ACO’s alignment, capitation, and quality reporting obligations. This automatic inclusion could create complications for larger ACO Participant Providers with a variety of different provider types, especially if they are already in the ACO REACH model and rely on the current TIN-NPI construct to optimize performance. Although the RFA indicates that ACOs and providers may still create new TINs to participate in the LEAD Model, this approach can create additional administrative and compliance challenges, as well as result in the new TIN having a lack of billing history for purposes of claims-based alignment. By contrast, Preferred Providers in the LEAD Model will continue to be identified at the TIN-NPI level. CMS also noted, however, that NPIs billing under Participant Provider TINs may still participate in another model through a different TIN that is not being used for the LEAD Model.

 Mid-Year Participant TIN Additions and Hybrid Beneficiary Alignment

Unlike ACO REACH, the LEAD Model introduces a mid-year Participant TIN addition option that allows ACOs one opportunity during any given performance year to add new Participant TINs and, as a result, the beneficiaries associated with those newly added TINs become aligned to the ACO. This mid-year update is available to ACOs that have selected Hybrid Alignment and is based on a “second-look” of the same one-year lookback period used for prospective claims-based alignment. CMS intended for this updated process to ease the burden associated with administrative errors (e.g., inaccurate identifiers, omissions, etc.) and encourage new ACO participation by providers.

Benefit Enhancements (BEs) and Beneficiary Engagement Incentives (BEIs)

In addition to retaining or expanding existing enhancements and incentives, the LEAD Model introduces new BEs and BEIs. For example, the Medical Nutrition Therapy (MNT) Benefit Enhancement will expand MNT reimbursement for ACOs in the Global Risk Option to include beneficiaries diagnosed with pre-diabetes and hyperlipidemia. CMS is also considering additional BEs and BEIs for future performance years, including a Part D Premium Buydown Incentive that may be introduced in 2029. In addition, CMS is considering an Annual Wellness Visit (AWV) flexibility that would cover AWVs on a calendar-year rather than a 12-month basis, which could ease administrative burdens associated with tracking these deadlines.

High Needs Beneficiary Integration

Another shift in the LEAD Model is the incorporation of “High Needs” beneficiaries across all participating LEAD ACOs. Under ACO REACH, High Needs Population ACOs were a distinct participant type that could only align beneficiaries meeting specific eligibility criteria. The LEAD Model provides more flexibility to allow ACOs focused on High Needs beneficiaries to align any Medicare fee-for-service beneficiary while also treating their High Needs beneficiaries as a distinct population category with a separate risk adjustment, PBPM benchmark, and trend factor. Additionally, ACOs serving a high proportion of High Needs beneficiaries (i.e., more than 40% of their aligned beneficiaries) and meeting other criteria will benefit from lower alignment minimums. ACOs seeking to qualify as High Needs ACOs must include this in their application with a description of how it will meet the eligibility criteria.

Medicare-Medicaid Integration Pilot

The LEAD Model will also introduce a new Medicare-Medicaid integration component, aimed at addressing the fragmented care experienced by the approximately 30% to 50% of dually-eligible beneficiaries who access Medicare through traditional Medicare rather than managed care. During an initial planning phase from March 2026 through December 2027, CMS will select two “DUAL states” and work to develop a framework for partnership arrangements between LEAD ACOs and state Medicaid agencies (SMAs), or Medicaid managed care organizations (MCOs). The states will be selected based on criteria such as the size and cost of dual-eligible populations, regional Medicare cost growth, ACO penetration, and disposition toward integrated care. Following that planning phase, ACOs in the selected states could enter into partnership agreements with the applicable MCOs or SMAs that would define roles and responsibilities for dually-eligible beneficiaries, articulate care coordination strategies, establish bilateral risk-sharing arrangements across Medicare and Medicaid, and set terms for improved data sharing.

Updated Benchmarking

CMS introduced a new benchmarking methodology under the LEAD Model, which is designed to improve long-term financial stability for participating ACOs and address the “ratchet effect” that has been a recurring concern in prior ACO models. To do this, the LEAD Model will maintain consistent benchmarks without re-basing and an ACO’s three-year historical baseline period will remain fixed for the duration of its participation in the LEAD Model.

LEAD Model Application Process

The LEAD Model application portal is open and will remain so until 11:59 PM ET on May 17, 2026. All ACOs accepted under the RFA for participation beginning in Performance Year (PY) 2027 will have the opportunity to participate in an implementation period from September 15, 2026, through December 31, 2026. The implementation period is intended to provide ACOs joining the LEAD Model with an opportunity to conduct voluntary alignment activities in preparation for meeting the applicable beneficiary alignment minimum (which varies based on the ACO type and performance year) at the start of PY 2027.

Based on the RFA, applicants must demonstrate, among other things:

  • Organizational and governance capacity to operate an ACO over a 10‑year period.
  • Financial and operational readiness to assume downside risk.
  • Experience or planned investments in care coordination, data analytics, and population health management.
  • Alignment strategies for engaging providers and beneficiaries, particularly in underserved or high‑needs populations.

ACOs currently participating in the ACO REACH model in PY 2026 are eligible to submit an abbreviated application for the LEAD Model. Additionally, organizations and ACOs that are interested in future LEAD Model application cohorts can submit a letter of interest to CMS by April 20, 2026, which the agency will use to gauge the level of interest in future application cycles.

CMS has stated that application review will focus not only on technical compliance but also on an applicant’s ability to advance the LEAD Model’s goals of long‑term stability, equity, and improved outcomes.

If you have any questions regarding the LEAD Model or how to apply, please contact the authors.

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