A new accountable care organization (ACO) model is on the horizon after the Centers for Medicare and Medicaid Services (CMS) announced that the Long-term Enhanced ACO Design (LEAD) Model will launch following the conclusion of the ACO REACH Model at the end of 2026.

Sector experts see the model as a bid by CMS to get more residents in long-term care settings in ACOs. Indeed, CMS said, “LEAD builds upon the CMS Innovation Center’s earlier accountable care work and utilizes improved benchmarking to appeal to a broader mix of healthcare providers, including those with specialized patient populations and those new to ACOs, such as smaller, independent, or rural-based practices.”

At its core, an ACO is a group of doctors, hospitals, and other healthcare professionals that work together to give patients high-quality, coordinated service and healthcare, improve health outcomes, and manage costs. ACOs may be in a geographic area and/or focused on a specific condition, like chronic diseases.

They may be in SNFs, too, and work by having the ACO take over the risk and benefit of providing great care to residents with the goal of lowering readmissions. ACOs are incentivized to keep residents as healthy as possible. If they do, the ACO makes money. If they don't, the ACO loses money. ACOs in turn hire nurses and other clinicians to maintain daily care of residents and act on preventing illnesses.

Decade-Long Performance Period

For the newest model, CMS highlighted that with a 10-year performance period — the longest CMS has ever tested — “LEAD offers a predictable window without rebasing and a pathway toward sustainable long-term benchmarks and savings.”

LEAD, it said, also will focus on better serving coordinated care for high-needs patients, such as those dually eligible for Medicare and Medicaid, and those who are homebound or home limited. LEAD is a voluntary model that runs from Jan. 1, 2027, through Dec. 31, 2036. ACOs can apply to participate beginning in March 2026.

The American Health Care Association/National Center for Assisted Living (AHCA/NCAL), which has had dialogue with regulators on the unique needs of the LTC population and ACO development, said CMS is making an important commitment with this new model.

“We’re encouraged by CMS’s decision to offer LEAD as a successor to the ACO REACH Model. This is an important commitment to supporting vulnerable populations, including dual-eligible beneficiaries and patients with complex care needs, in the development of ACO models,” said Nisha Hammel, vice president, reimbursement policy and population health. 

“At the same time, we must continue to work towards a more inclusive array of ACOs that will allow most long-term residents to align with a model, as nearly one-third of residents currently do not. We are hopeful that LEAD will help to close that gap, and we will continue to advocate for better alignment for long-term care populations.”

Stakeholder Sees Opportunity

A major player in the ACO-long-term care space, Keith Persinger, CEO, Provider Partners Connect Care, said his organization is excited by CMS’s announcement of the new LEAD model.

“As the specifics of the new LEAD model are announced during 2026, we believe this model will further support the goals of the existing High Needs REACH model while providing new enhancements to healthcare providers and practices to improve patient care and outcomes,” he said. 

The LEAD model, Persinger explained, will allow healthcare providers to support a much broader number of Medicare patients, ultimately improving the care for thousands more Medicare beneficiaries. 

“This is an exciting step in the Medicare’s evolution towards comprehensive and enhanced value-based care delivery,” he said.

Provider Partners Connect Care partners with skilled nursing facilities, assisted living facilities and personal care homes to offer tech-enabled value-based care. The company also combines long-term care expertise and real-time clinical intelligence in an ACO REACH model partnership. The ACO is focused on SNFs and assisted living facilities and boasts a 55 percent average reduction in readmissions.

REACH Model Runs Through 2026

Currently, the ACO REACH Model has 103 participants nationally, CMS said. REACH ACOs are composed of different types of providers, including primary and specialty care physicians.

CMS said the model was redesigned from the Global and Professional Direct Contracting (GPDC) Model, which ran for two performance years (PY 2021 through PY 2022). ACO REACH’s first performance year began on Jan. 1, 2023, and will run for four performance years (PY 2023 through PY 2026).

The problem REACH is aimed at helping to solve is that the healthcare system can be especially challenging for patients with chronic conditions and those who receive care from multiple providers who do not communicate with each other.

“These patients often receive unnecessary, repeat diagnostic tests or conflicting treatments for their different health conditions, and their primary care physician, if they have one, may not have a full picture of the treatment received by other providers,” CMS said.

Enter the ACO REACH Model, which encourages providers — including primary and specialty care doctors, hospitals, and others — to form an ACO, which are intended to break down silos and deliver high-quality, coordinated care to their patients, improve health outcomes, and manage costs, the agency said.

See more information on the LEAD model at https://tinyurl.com/j5edpx6e.

For information on all of the ACO models in the CMS portfolio, go to https://tinyurl.com/5n6u38d6.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.