CMS recently held a webinar to provide additional details on LEAD, a new voluntary 10-year ACO opportunity running from January 1, 2027 through December 31, 2036.

CMS Update:

• LEAD is not “ACO REACH 2.0.” It is CMS’s attempt to fix the structural problems that have made high-performing ACOs plateau, rural/FQHC/independent groups struggle to enter, and benchmarks become punitive over time.

LEAD introduces several structural changes designed to address long-standing challenges in prior ACO models. Most notably, the model eliminates benchmark rebasing for the full 10-year performance period and implements a redesigned benchmarking approach intended to support both experienced ACOs and organizations newer to value-based care. LEAD also integrates high-needs beneficiaries across all ACOs through concurrent risk adjustment rather than separating these patients into a distinct track. In addition, the model introduces a new hybrid alignment option that allows monthly voluntary alignment updates and a mid-year claims-based alignment run when new TINs are added, allowing ACOs to grow attribution through the year. The model is also designed to directly support specialist inclusion by introducing a new Non-Primary care capitation payment. COPE Health Solutions has outlined all of CMS’ updates below for you to prepare for the upcoming LEAD application for your ACO.

The Request for Applications is expected in early spring 2026, with applications due later that spring and selection decisions announced in early summer 2026.

Who is LEAD a fit for?

LEAD is a strong fit for both experienced ACOs and organizations new to accountable care.

For prior MSSP and ACO REACH participants that experienced benchmark erosion or unfavorable historical comparisons, LEAD offers a 10-year performance period with no rebasing and a redesigned benchmarking approach that supports long-term financial stability.

At the same time, the model is intentionally structured to attract smaller, independent, rural, and safety-net providers including FQHCs, CINs, and IPAs by providing advanced payments, administrative add-ons, and alignment flexibility that support infrastructure growth. Rural health providers may find LEAD particularly attractive due to this add-on payments and a lower beneficiary alignment minimum. particularly as they look to align their transformation strategy alongside other grants and programs. New entrants and smaller ACOs also benefit from the hybrid alignment approach in LEAD which allows expanding networks to realize attribution growth throughout the year as they form new alliances.

Experienced ACOs looking to better engage specialists can also leverage some of the offerings under LEAD, such as CMS-administered episode-based risk arrangements (CARA) and expanded non-primary care capitation options. Specialists themselves may find it advantageous to align with ACOs under LEAD as they coordinate their value-based care strategy alongside complementary programs such as the Ambulatory Specialty Model (ASM).

Overall LEAD appears to be well suited for both established and emerging organizations preparing to invest in long-term care transformation.

RISK OPTIONS – Not much has changed here

LEAD features the same risk sharing options as ACO REACH: global risk (full risk) and professional risk options.

• Global risk option allows ACOs to earn up to 100% of savings while being responsible for 100% of losses.
• Professional risk option allows ACOs to earn up to 50% of savings while capping potential losses at 50%.

Professional risk sharing option includes a 4-year lock-in period for ACOs selecting that option. It is important to note that ACOs selecting global risk option access broader capitated payment options and additional beneficiary engagement tools.

NEW BENCHMARKING – Fixes the “success penalty” problem that has hurt the best performing ACOs in MSSP/REACH

LEAD establishes new benchmarks based on historical spend for all ACOs in their first performance year with no rebasing for the full 10-year performance period. Additionally, the model includes no negative adjustments for ACOs with higher costs compared to regional peers and provides additional capitated payment incentives for these higher-cost ACOs. ACOs that achieved cost efficiency relative to regional peers receive positive-only regional efficiency adjustments similar to Shared Savings Program.

In the long run, LEAD will move away from historical benchmarks altogether and towards a rate book-based benchmark in the second half of the model, allowing convergence of spend between high and low spending beneficiaries.

Capitation and Cash Flow Is Expanded to Include a New Capitation Option

LEAD will still have the option for Primary care capitation and Total care capitation to provides upfront monthly capitated payments for primary care (and specialty care if relevant) services delivered by participant and preferred providers. The program will still include Advanced payment option (APO) providing upfront cash flow for non-primary care services for ACOs selecting primary care capitation, reconciled against actual fee-for-service billing. Additionally, there is now a new non-primary care capitation option which acts as true capitated payment reconciled only against total cost of care, not individual fee-for-service billing. Administrative add-on capitation payments will also be available to provide additional incentive exclusively to ACOs with higher costs relative to regional peers.

These expanded cash flow and capitation options make LEAD particularly well-suited for rural health providers, FQHCs, and IPAs that need upfront funds to build the infrastructure required for value-based care, as well as for experienced ACOs seeking enhanced capitation pathways to strengthen their networks and better align specialist relationships.

High Needs Is No Longer a Separate Track!

In REACH, high-needs was a separate lane. However, in LEAD high-needs beneficiaries will be treated as a distinct population type across all ACOs. High-needs beneficiaries will receive their own historical benchmark, trend factor, and concurrent risk adjustment model regardless of ACO type. Furthermore ACOs with at least 40% high-needs beneficiaries qualify for lower beneficiary alignment minimums. It is important to note however that organizations qualifying for lower alignment minimums must have care capabilities including 24/7 patient access to providers, staff trained in advanced care planning, and ability to deliver home-based care.

New Alignment Model Allows for Attribution Growth During the Year

LEAD still offers both claims-based alignment using utilization patterns and voluntary alignment where patients actively choose an ACO through their primary provider. In LEAD, ACOs select between prospective alignment (beneficiary list set before performance year with no updates except eligibility drops) or hybrid alignment (new option allowing mid-year updates). The Hybrid alignment updates beneficiary lists through voluntary alignment on a monthly basis, compared to quarterly updates in ACO REACH. Additionally, Claims-based alignment runs once before the performance year starts, plus one additional mid-year run if ACO adds new participant TINs during the year.

LEAD also adopts a whole TIN approach from MSSP for participant management where all billing NPIs under the participant TIN are encompassed in the ACO’s operations. Preferred providers are still managed at the TIN NPI level to allow maximum flexibility for ACOs.

CMS administered risk arrangements for specialists

CARA (CMS Administered Risk Arrangements) is optional for ACOs selecting the global risk option and tests new payment structures for engaging specialists in episode-based risk. Episode options include acute medical, procedural, and chronic condition episodes using episode-based cost measures. ACOs participating in CARA negotiate with specialists to determine target prices for episodes. Specialists then will get share in savings when delivering efficient care below target price or share in losses when costs exceed target price.

Quality measurement strategy – aim is simplification

The model’s quality payments will be based on a small, targeted set of familiar quality measures. LEAD will include the same 4 claims based measures from ACO Reach, CAHPS, and 2 new digital measures (eCQMs). These new measures will be optional for the first two years and pay for reporting for years three and four allowing time for ACOs to prepare reporting. ACOs will still have the 3% quality withhold earnback in this program as well.

Other Notable Items

LEAD includes existing benefit enhancements from ACO REACH plus an expanded set of new BEs and beneficiary engagement incentives (BEIs). CMS introduced that by 2029, ACOs can share savings with Medicare beneficiaries through Part D premium reductions.

CMS also introduced a Medicare-Medicaid integration for dually eligible beneficiaries in original Medicare, which has not been tested in prior ACO models. CMS will select 2 states for initial planning phase, targeting one fee-for-service Medicaid state and one managed care state. The model introduces Medicaid-based alignment where beneficiaries receiving Medicaid benefits from a partnered organization will align to that organization’s partner ACO if not already aligned elsewhere.

Timeline

• Request for applications releases early Spring 2026 with applications due later Spring 2026
• Applicants will be notified of selection decisions in early Summer 2026
• Onboarding takes place from summer through Fall 2026
• Optional pre-implementation period begins in Fall 2026 for selected participants

CMS expects future application opportunities for later performance years, though participation parameters may change based on early model learnings

Our team is closely tracking every CMS update related to LEAD and can help you assess whether this model aligns with your long-term transformation strategy. From readiness and capabilities assessment to application support, infrastructure planning, and clinical and operational execution, CHS partners with organizations at every stage to position them for success in their ACO journey.

Contact us at info@copehealthsolutions.com to learn more.