Baltimore, Maryland — For years, most nursing homes have sat on the sidelines of Medicare’s shift to value-based care, watching other providers collect shared savings while facing the administrative burden and financial risk that made participation unworkable. A new federal model just changed the math.
The Centers for Medicare & Medicaid Services officially opened applications for the Long-term Enhanced ACO Design — or LEAD — model on March 31, marking what regulators are calling the most ambitious accountable care initiative the agency has ever designed. Applications are due May 17, 2026, with the program launching January 1, 2027.
What the LEAD Model Is — and Why It’s Different
LEAD replaces ACO REACH, which ends December 31, 2026. Like its predecessor, LEAD asks participating organizations to take accountability for the total cost and quality of care for a defined group of Medicare beneficiaries. But the new design addresses the structural problems that drove providers out of earlier ACO programs.
The biggest change is benchmark stability. In past models, ACOs that successfully cut spending found their benchmarks reset lower in subsequent years — a “ratchet effect” that essentially punished success. Under LEAD, benchmarks are locked for the full 10-year performance period without rebasing. That’s never been done in a CMS value-based model before.
The program also broadens its doors. Previous ACO designs largely favored large physician groups and health systems. LEAD is explicitly built to accommodate smaller practices, independent providers, and organizations serving specialized populations — including dual-eligible beneficiaries and patients who are homebound or home-limited. Those descriptions fit a large portion of nursing home residents.
Nursing Homes Are Now a Direct Target
The dual-eligible population — people who qualify for both Medicare and Medicaid — tends to be sicker, older, and costlier to care for. They’re also disproportionately likely to live in or cycle through nursing facilities. CMS says LEAD is designed specifically to improve coordinated care for high-needs patients like these.
That’s a significant shift from prior ACO models, where as industry reports noted, most skilled nursing facilities were locked out of value-based arrangements because the financial structures didn’t work for post-acute providers.
Under LEAD’s Global Risk option, ACOs can earn up to 100% of their generated savings while bearing full downside risk. The Professional Risk option lets participants earn up to 50% of savings with losses capped at the same level — a more accessible entry point for providers new to shared risk.
A 10-Year Window
CMS is framing LEAD’s decade-long timeline as a feature, not just a commitment. The agency says the extended performance window gives providers time to make real investments in care coordination, staffing, and data infrastructure — investments that shorter models have historically made impractical.
For nursing home operators, that stability could open a genuine path into value-based care that works within their financial and operational realities. The question now is whether the industry has the appetite and infrastructure to apply.
The application deadline is May 17, 2026. More information is available through the CMS Innovation Center at cms.hhs.gov.
