Introduction
The Centers of Medicare & Medicaid Services’ (CMS) new Long-term Enhanced ACO Design (LEAD) Model marks a clear inflection point in Medicare accountable care. More than a successor to ACO REACH, LEAD reflects CMS’s intent to move beyond short-term pilots and toward durable, population-based payment structures that providers can realistically plan around.
For organizations participating in the Medicare Shared Savings Program (MSSP) today or winding down ACO REACH after 2026, the question is no longer whether accountable care will remain a central Medicare strategy. The question is how to position for a longer horizon, greater financial accountability, and deeper operational integration, particularly as CMS raises expectations around risk, equity, and performance sustainability.
Why CMS Created LEAD
Across MSSP and ACO REACH, CMS has repeatedly encountered the same structural challenges:
- Benchmark volatility, particularly as models rebalance historical and regional spending while growing or sustaining your population
- Short model timeframes, limiting providers’ ability to invest in care redesign
- Misalignment between policy ambition and operational reality, especially for smaller, rural, or physician-led organizations
- Incomplete integration and incentives of high-needs populations and specialists, where much of Medicare spending actually occurs
LEAD is CMS’s response to these constraints. By establishing a 10-year model (2027 – 2036), CMS is explicitly prioritizing stability, predictability, and long-term participation over rapid iteration.
How LEAD Differs from MSSP and ACO REACH
MSSP remains the permanent, regulated Medicare ACO pathway, built on fee-for-service billing with retrospective reconciliation and defined agreement periods. It offers regulatory certainty, but its benchmarking mechanics, particularly regional adjustments and rebasing, continue to be a source of financial unpredictability for some participants.
ACO REACH, by contrast, accelerated the move toward capitated, population-based payments and two-sided risk, while introducing greater flexibility around participation structures, including health plan involvement and TIN/NPI-level attribution alignment. However, its time-limited design and ongoing policy recalibration created challenges for organizations trying to commit capital and resources beyond a few performance years.
LEAD combines elements of both approaches while addressing their shortcomings. Key features include:
- A 10-year performance runway, reducing churn and supporting longer-term investment
- Capitated payment pathways with Professional and Global risk options
- New infrastructure such as CMS Administered Risk Arrangements (CARA) to support downstream and episode-based risk
- Expanded beneficiary engagement and benefit enhancements, particularly for high-needs populations
The throughline is clear: CMS is signaling that accountable care is no longer experimental, it is an expected operating model for Medicare.
The Financial and Benchmarking Implications
From a financial perspective, LEAD’s most important feature may be time rather than mechanics. Longer horizons fundamentally change how benchmarks, trends, and risk adjustment function in practice.
Under MSSP and ACO REACH, annual or near-term benchmark recalibration can make performance feel episodic. LEAD’s design is intended to improve benchmark stability and predictability, allowing organizations to focus less on year-to-year reconciliation dynamics and more on structural cost and quality drivers.
That shift places greater emphasis on:
- Managing utilization and site of care
- Reducing unwarranted variation in specialty spend
- Aligning incentives across the full continuum of care
- Building analytics that support longitudinal performance, not just annual settlement
Specialists Are Central (Not Optional) Under LEAD
One of the most consequential implications of LEAD is its impact on specialist participation.
Historically, specialists have often been adjacent to Medicare ACOs rather than fully integrated into accountability structures. LEAD changes that dynamic. With tools like CARA and a longer financial runway, specialists can participate through episode-based risk, co-management arrangements, and aligned incentives tied directly to total cost and outcomes.
For cardiology, orthopedics, oncology, nephrology, and other high-impact specialties, LEAD creates a clearer pathway to:
- Participate meaningfully in value-based economics
- Invest in care redesign and site-of-care optimization
- Move from transactional referral relationships to strategic partnerships within accountable systems
In practice, LEAD makes specialty integration a financial imperative, not just a clinical aspiration.
Looking Ahead
As CMS transitions from ACO REACH to LEAD and continues to refine MSSP, organizations face a narrowing window to make deliberate, informed decisions about their Medicare strategy. Participation choices made today will influence eligibility, risk exposure, and investment priorities well into the next decade.
Entering a capitated, population-based model is not a decision to be taken lightly. It requires a significant strategic, financial, and operational commitment, and identifying the right participation approach can be challenging given the scale of change involved. Success under LEAD will depend on choosing the “right fit” model by having the ability to translate policy design into execution: aligning benchmarks, incentives, governance, and analytics around a coherent long-term strategy.
How Pinnacle Can Help
Pinnacle Healthcare Consulting works with organizations navigating Medicare accountable care across the full lifecycle from strategy through implementation and optimization.
We support clients by:
- Evaluating MSSP, ACO REACH wind-down, and LEAD readiness in the context of organizational goals and risk tolerance
- Modeling financial and benchmarking scenarios to inform participation and investment decisions
- Modeling how the “right fit” strategic growth plan affects your model and physician composition
- Designing specialty integration strategies aligned with population-based accountability
- Supporting governance, multi-payor contracting, and downstream risk arrangements
- Building data and analytics integration frameworks that enable sustained performance over time
As CMS raises the bar for accountable care, organizations that approach this transition with clarity, discipline, and long-term intent will be best positioned to succeed. Pinnacle helps clients navigate that transition with confidence, grounded in policy expertise, financial analytics, and practical execution.
