The LEAD Model: What It Means for Serving High-Needs Beneficiaries
LEAD Supplies the Financial Terms. To Succeed, Care Needs the Right Catalysts
High-needs beneficiaries stand to gain more from accountable care than almost anyone. Yet, since inception, Medicare accountable care organizations (ACOs) have not historically invested in the intensive care management and community partnerships these beneficiaries need. The Long-Term Enhanced ACO Design (LEAD) Model could change that.
Nevertheless, better financial terms won’t do it alone.
Missed opportunities
Most MSSP ACOs have not focused on high-needs beneficiaries. The business case is weak when an ACO shares savings with CMS but bears the full cost of enhanced care management itself. MSSP’s 5,000-beneficiary minimum made it harder still, because few organizations could build a dedicated program around a population that size.
ACO REACH took a different direction, with dedicated high-needs tracks and lower minimums. Initial findings show meaningful improvements in the high-needs track. But upfront costs and changing financial terms were barriers as well. Moreover, some organizations found CMS’s definition of high needs too stringent; it often excluded beneficiaries that high-needs-focused organizations were already serving.
LEAD builds on those lessons.
LEADing to better outcomes
The LEAD model officially launches in January 2027. Nearly 100 ACOs have signed up, pending final agreements with CMS. The model is expected to last for ten years with fixed benchmark years making financial calculations more consistent.
LEAD makes real changes to strengthen ACOs’ incentives and capabilities to serve high-needs populations. For the first time, all participating ACOs get favorable financial terms, including concurrent risk adjustment, not just those serving high-needs beneficiaries exclusively. ACOs with higher-than-average benchmarks also receive a 1.5% add-on payment, intended to fund direct investment in enhanced care management, care coordination, and home-based care.
CMS is also giving ACOs the chance to waive beneficiary cost-sharing. Cost-sharing makes sense when it discourages low-value or unnecessary care. For people with high needs, it mostly blocks the care that keeps them out of the hospital.
These changes improve the business case. They don’t build the infrastructure, expertise, or partnerships needed to do the work well. That part is up to the ACOs.
It’s not just about medical care
For high-needs beneficiaries, the most important needs are often not medical. ACOs that want better outcomes need to think beyond the clinic. Here are five places to start:
1. Community-based organizations. For low-income beneficiaries, health care is often downstream of other needs: food, transportation, social services. There is ample evidence that community-based organizations can improve health at low cost. The strategic question is how to build partnerships that are reliable and financially sustainable.
2. Senior housing operators. Probably the most underutilized resource in all of Medicare. Housing operators already have trusted relationships with residents, along with the opportunity and capability to coordinate care and even deliver services to large numbers of enrollees cost-effectively. ACOs should treat them as an extension of their care network.
3. Caregivers. You can’t get more cost-effective than a family caregiver. Family caregivers keep many beneficiaries at home and out of the hospital. Identify them, bring them into care planning (with the beneficiary’s consent), strengthen their capabilities, and connect them to support.
4. Community health workers. CHWs are often best positioned to provide navigation and coordination. Sometimes the direct relationship matters more than the services themselves. ACOs should consider how trusted community-based staff can complement traditional care management.
5. Medicare-Medicaid integration. Possibly the most innovative feature of LEAD is the opportunity to integrate care with Medicaid programs and plans in two states (not yet selected). There is strong evidence that integrated managed care can improve outcomes, but it hasn’t yet been tried in an ACO setting. Design and implementation will determine whether it works.
So, will ACOs seize the opportunity?
My view: the ones that do will treat community partners as part of the care model, not as a referral list. These opportunities aren’t interchangeable, and no single one fits every organization. ACOs will need to match their beneficiaries’ needs, their own capabilities, local resources, and financial constraints, then measure impact and sustain what works.
If you’re a community organization
ACOs preparing for LEAD will be looking for partners over the next few months. Know your numbers: who you serve, what it costs, and what outcomes you can show. Be ready to contract. The organizations that can describe their value in an ACO’s terms will be first in line.
LEAD creates an opening. The work now is turning new incentives into a strategy that reaches the people who need it most.
I will be at the NAACOS fall conference this week. If you’re thinking through what LEAD means for your organization, or you’re a community organization preparing to partner with ACOs, I’d welcome the chance to connect before or during the conference.
Andrew Brecher is the founder of Population Health Strategies, a consulting practice that helps healthcare organizations and community providers navigate federal health policy and build the partnerships that value-based models require.