CMS announces new ACO model as REACH ends

CMS has a new opportunity for accountable care organizations, or ACOs, as the agency sunsets a popular ACO model.

The federal agency recently announced the Long-Term Enhanced ACO Design (LEAD) Model, which will run for ten years following the conclusion of its ACO REACH Model. This will be the longest performance period tested by the CMS Innovation Center.

The announcement makes ACO REACH's expiration official despite industry-wide calls for CMS to continue the model. ACO REACH has over 100 ACOs participating, but those organizations will have to move on after next year.

Still, the National Association of ACOs (NAACOS) urged CMS to extend ACO REACH for at least another year to give ACOs more time to evaluate value-based care model opportunities. Over the last month, the CMS Innovation Center has announced several other new payment models, including the Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model and the Make America Healthy Again: Enhancing Lifestyle and Evaluating Value-based Approaches Through Evidence (MAHA ELEVATE) Model.

NAACOS generally supported the new LEAD Model, applauding its ten-year timeline and other key design features, including Medicaid data integration and technology support.

"The model’s 10-year timeline will allow participants to move past implementation to develop long-term investments and meaningfully innovate strategies that help move the transition to accountable care forward," Emily Brower, president and CEO of NAACOS, said in the statement.

CMS said on the Innovation Center website that the long performance period aims to provide predictability while a new benchmarking approach delivers a pathway to long-term, sustainable savings.

Many healthcare providers have steered clear of ACO models or dropped out of existing opportunities because of financial and administrative barriers to success, the agency added. LEAD intends to eliminate these barriers through prospective, population-based payments and customized options for rural and small providers.

The model will also include new benefit enhancements and beneficiary engagement incentives to encourage Medicare beneficiaries to seek out care from ACO providers. These will include Part B cost-sharing support and a Part D premium buy-down by 2029.

CMS also seeks to better integrate Medicaid for ACO providers treating dual-eligible beneficiaries. Starting in March 2026 and continuing through December 2027, CMS will collaborate with two states to develop an ACO-Medicaid partnership framework that enhances care coordination for this population.

There will be two financial risk tracks for ACOs, including one with 100% downside risk and another with 50%.

"By supporting team-based care, keeping participation voluntary, and offering more predictable and sustainable payments, this model has the potential to improve patient outcomes and strengthen Medicare," John Whyte, M.D., M.P.H., CEO of the American Medical Association (AMA), said in a statement emailed to RevCycle Management. "We appreciate CMS and the Innovation Center's efforts and look forward to continuing to work together to make these models successful."

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.