CMS LEAD Model transforms the future planning of accountable care organizations. Starting January 1, 2027, the CMS LEAD Model locks in benchmarks for 10 years, removing the ratchet effect that penalized high performers. Unlike ACO REACH, which resets targets every three years, LEAD ensures long-term stability.
However, CMS developed LEAD as a response to three issues: benchmark resets, which were punitive in efficiency, administrative obstacles to specialists, and resource deficits to enable small practices to join value-based care. Organizations have 13 months to assess readiness and implement the infrastructure needed to participate in the 10-year program.
What Is the CMS LEAD Model?
The CMS LEAD Model (Long-term Enhanced ACO Design) is a voluntary accountable care program running for 10 years without benchmark resets. CMS created it to replace ACO REACH and remove structural problems that made previous models unsustainable for organizations that had already optimized care delivery.
Therefore. Your financial baseline remains fixed for 10 years. If an ACO reduces costs by 8% in year one, that benchmark applies for the entire decade, unlike previous models where improvements led to stricter targets.
Key Features That Define LEAD
- Fixed 10-Year Benchmarks: No resets that punish improved performance
- CARA Integration: CMS handles specialist risk arrangements administratively
- Infrastructure Grants: Direct funding for small practices and rural providers
- Two Risk Tracks: Global (full capitation) or Professional (services only)
Therefore CARA (CMS Administered Risk Arrangements) removes the biggest barrier specialists face. Before LEAD, bringing specialists into an ACO required separate contracts, individual billing setups, and complex reconciliation. CARA centralizes this through CMS, making participation administratively feasible.
Why CMS Built the LEAD Model
Successful ACOs were leaving value-based care because the ratchet effect made staying financially irrational. Organizations that lowered costs saw their benchmarks drop by the same amount in the next cycle, requiring additional savings just to maintain shared savings payments.
High performers maxed out efficiency gains within two benchmark periods, then exited. However, CMS needed to stop this exodus by creating a model where improved performance remained financially rewarding throughout the program duration.
What Changed from Previous ACO Models
| Element | Previous Models | LEAD Model |
| Benchmark Duration | 3 years with resets | 10 years fixed |
| Specialist Integration | Individual contracts required | CARA handles administration |
| Small Practice Support | Limited assistance | Direct infrastructure funding |
| Risk Options | Standard/enhanced tracks | Global/Professional tracks |
The table shows how LEAD restructures the entire incentive system. Benchmark stability enables planning. CARA makes specialist participation practical. Infrastructure grants give small providers access to population health tools previously available only to large health systems.
How the LEAD Model Operates
CMS sets your benchmark based on historical spending for your assigned beneficiary population. That benchmark stays fixed for 10 years. You share in savings when actual spending falls below the benchmark, or incur losses when spending exceeds it. The model assigns beneficiaries using a claims-based methodology. Patients don’t enroll or choose an ACO.
The Two Risk Track Options
- Global Risk Track covers all Medicare Part A and Part B service including hospital and specialist care. Organizations can earn up to 50% of generated savings, but need stronger financial reserves to cover potential losses across comprehensive services.
- Professional Risk Track limits accountability to professional services and Part B costs. The savings potential is capped at 40%, but financial exposure decreases significantly. This track works for physician groups without hospital partnerships.
Therefore, Your track selection determines discount rates, minimum savings requirements, and required financial reserves. The choice happens during application and stays fixed for all 10 years.
How CARA Enables Specialist Participation
Specialists avoided previous ACO models because administrative overhead outweighed potential returns. Creating separate legal entities, negotiating individual contracts, and managing split payments made participation impractical for most specialty practices.
CARA changes this completely:
- Specialists join without separate contracting
- CMS handles payment distribution directly
- Reconciliation happens at the CMS level
- Administrative burden drops to manageable levels
Cardiologists, orthopedists, and other specialists can now join the accountable care program without restructuring their practices or hiring compliance staff.
Infrastructure Support for Small Providers
LEAD provides direct funding for organizations lacking population health infrastructure. Small practices, rural providers, and community health centers receive grants covering digital health platform implementation, care management software, analytics tools, and staff training.
This addresses a fundamental equity issue. Previous models favored large health systems with existing IT infrastructure and actuarial teams. Smaller organizations couldn’t compete. LEAD’s infrastructure grants let practices with 10 physicians access tools available to 500-physician groups.
The grants cover upfront costs but don’t subsidize ongoing operations. Organizations still need sustainable business models and financial reserves to absorb potential losses.
Who Should Join LEAD?
Therefore, the LEAD works for organizations with care management capabilities, adequate financial reserves, and patient populations large enough to generate meaningful data. Organizations should consider LEAD if they are current ACO REACH participants seeking long-term benchmark stability, have efficient care delivery but faced benchmark reductions, want specialist integration without complex contracts, or serve eligible rural areas.
Organizations should not join LEAD without adequate population health technology, financial reserves (generally at least $500,000), and staff committed to care coordination and quality reporting.
Application Timeline and Requirements
Applications open in March 2026. The deadline for the submission of complete applications, financial records, and plans of operation by organizations is summer 2026. CMS makes participation decisions by fall 2026, allowing approved ACOs 3 months to complete infrastructure before the January 1, 2027, launch.
This 13-month window requires immediate action:
- Assess current care management capabilities
- Model financial scenarios under both risk tracks
- Evaluate specialist relationships for CARA opportunities
- Confirm financial reserves meet CMS requirements
- Prepare application materials and documentation
Organizations without ACO experience need external support to navigate requirements and implement necessary infrastructure.
Preparing for Long-Term Success Under the CMS LEAD Model
The CMS LEAD Model is a sustainable route to value-based care with 10-year benchmark stability, easier integration of specialists through CARA, and infrastructure support of smaller practices. Nevertheless, it takes great financial reserves, high-level operations, and long-term dedication to succeed. The applications will open in March 2026, so organizations need to take action. Persivia’s platform provides the integrated data, AI-driven care management, quality reporting, and risk stratification LEAD participants need to manage populations effectively and perform confidently over the next decade.
