Article
What changed this week
On April 15, CMS posted a revised request for applications for the Long-term Enhanced ACO Design Model, known as LEAD. The update clarifies policies on physical therapists in care teams, high-needs and end-stage renal disease patients, benchmarking and quality scoring. Applications are due May 17, and CMS will hold an office hour for prospective applicants on April 21.
LEAD would start Jan. 1, 2027, with an optional implementation period beginning Sept. 15, 2026. It runs 10 performance years through 2036, which CMS describes as the longest model period it has tested. ACOs choose either a global risk option, with full upside and downside on Medicare Parts A and B spending, or a professional risk option that shares risk with CMS. Current ACO REACH participants can file a shorter application.
Features that matter to health systems
- Stable benchmarks: CMS says it will not rebase benchmarks, so ACOs that lower spending are not penalized with lower targets later. A regional efficiency adjustment compares an ACO’s history with spending in its region.
- Capitation: Participating practices must accept capitated payments, with primary care and total care options. That brings steady cash flow but requires different billing and compensation systems.
- Hospital roles: Hospitals that employ physicians can join as participants, and critical access hospitals are eligible. Hospitals can also serve as preferred providers that share in savings or losses without driving patient alignment.
- Governance: The ACO’s governing body must be at least 75% controlled by its providers.
- Overlap limits: CMS expects practices to be barred from joining both LEAD and the hospital global budgets under the AHEAD model.
Questions for the board
A 10-year agreement is a strategic commitment, not a pilot. Boards should ask whether the organization has enough aligned primary care physicians and patients to manage risk, whether it can absorb losses in a bad year, and whether physician leaders will help lead the ACO. CMS notes in the application that ACOs have produced savings especially when led by physicians rather than hospitals, a hint that structure and leadership will matter.
Systems in AHEAD states may face a direct choice between a LEAD path and a hospital global budget. Finance, population health and physician leaders should model both before the deadline.
Archive entry for Apr 16, 2026, added Nov. 11, 2026.