CMS Unveils LEAD Model to Succeed ACO REACH in 2027

Key Takeaways

• The Centers for Medicare & Medicaid Services (CMS) will launch the Long-Term Enhanced ACO Design (LEAD) model on January 1, 2027, following the conclusion of the Accountable Care Organization (ACO) REACH model at the end of 2026.
• The voluntary model runs for 10 years, offering 2 risk-sharing options and enhanced, flexible payments to support care coordination.
• LEAD emphasizes inclusion of rural, independent, and high-needs–focused providers, with new Medicaid integration and episode-based risk arrangements.

CMS, through the Center for Medicare and Medicaid Innovation (CMMI), has announced the LEAD model as the next-generation accountable care program. Unveiled Thursday, December 18, 2025, LEAD will replace ACO REACH and operate from 2027 through 2036, marking the longest demonstration model ever tested by CMS.

Main News

LEAD is designed to address persistent barriers that have limited participation in accountable care organizations, including financial risk, administrative complexity, and unstable benchmarks. According to CMS, the model will offer enhanced and flexible cash flow payments, giving both new and established ACOs greater ability to invest in proactive, patient-centered care.

The model includes 2 voluntary risk-sharing tracks. Under the global risk option, participants can receive up to 100% of generated savings but are responsible for 100% of losses relative to their benchmark. The professional risk option allows participants to share 50% of savings and losses.

Abe Sutton, director of CMMI, said the model is intended to broaden participation, particularly among community health centers and rural providers. “LEAD is designed to make care more connected, more proactive and more centered on what patients with Medicare truly need,” Sutton said, emphasizing its focus on long-term provider–patient relationships.

CMS also plans to test Medicaid integration through LEAD. An initial planning phase from March 2026 through December 2027 will identify 2 states to develop frameworks for Medicare–Medicaid collaboration. If successful, ACOs in those states could partner directly with Medicaid organizations to share data and coordinate care.

In addition, LEAD introduces CMS Administered Risk Arrangements (CARA), allowing ACOs to enter episode-based risk arrangements with specialists and downstream providers, including a falls prevention program.

Clinical Implications

For payers and managed care stakeholders, LEAD represents a shift toward longer-term accountability and financial predictability in value-based care. The 10-year performance window, without frequent rebasing, is intended to support sustained investments in primary care infrastructure, prevention, and care coordination.

The model’s emphasis on high-needs populations—including dually eligible and homebound beneficiaries—aligns with evidence from prior CMS ACO models showing reductions in hospitalizations, emergency department visits, and avoidable high-cost care. By improving risk adjustment, benchmarks, and prospective payments, LEAD aims to make participation viable for smaller, rural, and independent practices historically underrepresented in ACOs.

The planned Medicaid integration could be particularly significant for states seeking to better align incentives across Medicare and Medicaid, potentially improving outcomes while reducing fragmentation for complex patients.

Conclusion

With LEAD, CMS is signaling a long-term commitment to accountable care that prioritizes stability, inclusivity, and prevention. As ACO REACH sunsets in 2026, the success of LEAD will depend on provider uptake, smooth transitions, and effective integration across Medicare and Medicaid programs.

Reference

Minemyer P. CMS unveils LEAD, its new 10-year accountable care model. December 18, 2025. Accessed December 19, 2025. https://www.fiercehealthcare.com/regulatory/cms-unveils-lead-its-new-10-year-accountable-care-model

Centers for Medicare & Medicaid Services. LEAD (Long-term Enhanced ACO Design) Model. December 18, 2025. Accessed December 19, 2025. https://www.cms.gov/priorities/innovation/innovation-models/lead