Introduction: What is the CMMI LEAD model?

On December 18, 2025, the CMS Innovation Center (CMMI) announced the Long-term Enhanced ACO Design (LEAD) Model,¹ the successor to ACO REACH, launching January 1, 2027. The LEAD model features an extended duration of 10 years, with a stated focus on enhanced support for smaller, rural, and independent practices, as well as for high-needs and underserved populations. Applications for the new model will open in March 2026.

While the announcement describes policy goals and high-level features of the new model, the technical specifications that accountable care organizations (ACOs) and other provider organizations will need to evaluate potential participation in the model are not yet known. This paper identifies several critical questions ACOs will need answered to evaluate whether LEAD is a good fit for their goals. In creating this list, we drew from lessons learned from past CMMI models, where seemingly minor technical specifications had significant financial impacts.

1. What should ACOs know about benchmark construction under LEAD?

What we know now: The LEAD model aims to use “improved benchmarking, prospective payments, and other innovative policies” to attract a larger variety of participants (e.g., rural practices will receive an add-on payment to their benchmark²). The model duration will be a “10-year pathway toward sustainable benchmarks,” a time frame that will be “without rebasing.”

Questions for ACOs to ask:

• What are the years of the baseline period?
• How will historical experience be adjusted (e.g., regional adjustment, population adjustment) in the benchmark development?
• Will there be a benchmark discount included for either the professional or global risk track? If so, what is it and will it vary over the duration of the model?

Why it matters: The model’s benchmark methodology will need to be sound to achieve the following broad model goals:

• Is financially sustainable
• Incorporates lessons learned from prior methodologies
• Allows for the success of seasoned ACOs experienced in downside risk, as well as less experienced entities (e.g., rural and/or independent providers who are new to ACO models)

ACOs will need to understand the details of the benchmark methodology to evaluate whether LEAD will fairly evaluate the performance of their ACO over the 10-year duration of the model.

2. How will benchmark expenditures be trended in the CMMI LEAD model?

What we know now: No details are given in the initial LEAD announcement about the benchmark trend. We do know that there will be “prospective, capitated payments,” but that does not guarantee that the benchmark trend will also be prospective (e.g., ACO PC Flex uses retrospective trend with prospective capitation payments).

Questions for ACOs to ask:

• Will a prospective or retrospective trend be used to update the benchmark each performance year?
• If prospective, will there be a self-correcting mechanism in place (e.g., retrospective trend adjustment—RTA—in REACH)?
• What is the reference population for the trend? Will it be national or regional? Which beneficiaries will be included?

Why it matters: Predictability has been a goal of CMS’s with respect to ACO benchmarks.³ However, in recent performance years, prospective trends have created financial headwinds in both the MSSP and REACH programs. ACOs should understand how the benchmark trend works to avoid unanticipated financial headwinds due to the methodology.

3. How will the CMMI LEAD model apply risk adjustment?

What we know now: The LEAD announcement indicates that “more accurate risk adjustment […] will be integrated across all ACOs,” supporting ACOs to serve patients with more complex needs.

Questions for ACOs to ask:

• Will the prospective CMS-HCC risk score model be used, or an entirely different risk adjustment model? If different, will it be as predictable as the current CMS-HCC model?
• Will the risk adjustment process (model, caps, etc.) vary by ACO type (e.g., high needs)?
• What constraints will there be on how risk scores impact benchmark (e.g., growth cap/floor, coding intensity factor—CIF—in ACO REACH)?

Why it matters: Risk adjustment is critical to adequately funding the care of populations with varying risk, especially for a model that aims to serve high-needs patients (e.g., dual-eligibles, institutional beneficiaries, or those who are homebound). The use of appropriate risk score models (as well as restrictions regarding how changes in risk score are reflected in a benchmark calculation) can make or break the financial viability of the program for many ACOs.

4. How will LEAD incorporate quality measures for ACOs?

What we know now: ACOs will be held accountable for “clinically meaningful quality measures focused on prevention and chronic disease management.”

Questions for ACOs to ask:

• How will quality performance influence financial settlement (e.g., benchmark withhold, quality gate, sliding scale application)?
• What is the source of the included quality metrics (e.g., claims-based or non-claims-based)?
• Will quality measures align with those used in other programs (e.g., HEDIS, MIPS, MSSP)?
• Will ACOs be able to monitor their progress on the quality metrics and replicate calculations themselves?

Why it matters: In the past, the quality metrics used in ACO programs have been difficult for ACOs to calculate internally, which has led to some challenges associating performance with individual practices. CMMI’s demonstrations are intended to “support health care transformation and increase access to high-quality care.”⁴ Appropriate quality measures will help ACOs in LEAD achieve that goal.

5. How should ACOs approach CARA, the CMS Administered Risk Arrangements?

What we know now: CMS Administered Risk Arrangements (CARA) will “enable episode-based risk arrangements between ACOs and their specialists […] to facilitate greater and stronger Preferred Provider relationships.” CMS is planning to provide a standardized framework, direct payment to both ACOs and specialists, and episode-level data sharing to help facilitate the growth of these arrangements.⁵

Questions for ACOs to ask:

• Which clinical episodes will be included?
• How will episodes be defined? What methodology will be used (e.g., MIPS)?
• Will episodes be risk-adjusted? If so, using what approach?
• Will there be a quality component or will the episode reporting simply focus on costs?
• What incentives will ACOs and specialists have to participate?

Why it matters: ACOs can use a “structured yet flexible framework” to engage with specialists to control beneficiary costs. Instead of one-off contracts, ACOs will have the ability to scale the way they share in risk with preferred providers (while still maintaining some degree of flexibility). For ACOs that can use this feature effectively, this could be a catalyst for incorporating specialists and other preferred providers in their care management framework in a way that moves the needle for managing total cost of care.

Conclusion: How ACOs can evaluate the pros and cons of LEAD

The LEAD model announcement describes an ambitious vision: a decade of improved benchmarking, more accurate risk adjustment, and a focus on serving high-needs, rural, and underserved populations. For ACOs to evaluate the pros and cons of participation, they will need to understand the answers to the questions outlined in this paper, as well as many other important considerations (e.g., assignment methodology, benefit enhancements, Medicare-Medicaid integration). Once CMMI releases the model’s technical details (perhaps as late as the RFA in March 2026), ACOs and provider organizations will need to perform a data-driven evaluation of whether LEAD participation is a good fit for their organization’s long-term goals.

¹ Centers for Medicare and Medicaid Services. (December 18, 2025). LEAD (Long-term Enhanced ACO Design) Model. Retrieved January 6, 2026, from https://www.cms.gov/priorities/innovation/innovation-models/lead.

² American Medical Association. (December 19, 2025). LEAD: What doctors need to know about the new CMS payment model. Retrieved January 6, 2026, from https://www.ama-assn.org/practice-management/payment-delivery-models/lead-what-doctors-need-know-about-new-cms-payment-model.

³ Shellabarger, S., Kuklinski, B., & Champagne, N. (February 3, 2025). “Predictability vs. accuracy in MSSP benchmarks.” Milliman. Retrieved January 6, 2026, from https://www.milliman.com/en/insight/predictability-accuracy-mssp-benchmarks-acpt.

⁴ Centers for Medicare and Medicaid Services. (April 30, 2205). Innovation models. Retrieved January 6, 2026, from https://www.cms.gov/priorities/innovation/models.

⁵ American Medical Association. (December 19, 2025). LEAD: What doctors need to know about the new CMS payment model. Retrieved January 6, 2026, from https://www.ama-assn.org/practice-management/payment-delivery-models/lead-what-doctors-need-know-about-new-cms-payment-model.