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LEAD model will offer multiple risk options, benchmark adjustments and new capitated payments
Summary
CMS finance lead described LEAD’s two risk‑sharing options (50% professional, 100% global), differentiated discount rates for high/low spending ACOs, benchmark construction using 2024–2026 base years, and expanded capitated payment options including enhanced primary care capitation and a total care capitation for global risk ACOs.
Harland McGee, finance lead for the LEAD model at the CMS Innovation Center, outlined LEAD’s financial strategy, saying the model’s design aims to encourage long‑term participation and avoid "punishing ACOs for successfully generating savings." He described two risk options: a professional option (50 percent shared savings/losses) and a global risk option (100 percent shared savings/losses) with an applied discount rate that differs for lower‑spending and higher‑spending ACOs.
McGee said baseline benchmarks will be calculated from historical claims over base years 2024–2026 and that LEAD will maintain three separate beneficiary categories (aged and disabled; ESRD; high needs) with separate benchmarks for voluntarily aligned and claims‑aligned beneficiaries. Base‑year weightings will differ for ACOs with no prior Medicare ACO experience versus those with experience in Shared Savings or ACO REACH.
To limit volatility, LEAD will use risk corridors and an optional stop‑loss policy similar to prior CMS models. LEAD also includes adjustments such as a prior‑savings adjustment and a positive‑only regional efficiency adjustment (available only to low‑spending ACOs that meet eligibility criteria). McGee said these adjustments will be capped and risk‑adjusted.
The model will offer several capitated payment options: a primary‑care capitated payment (PCC) with an enhanced primary care capitation (EPCC) as a separate upfront payment that must be repaid if reconciled to fee‑for‑service; an advanced payment option (APO) reconciled against fee‑for‑service; a non‑primary‑care capitated payment option reconciled against total cost of care; and a total‑care capitation available to ACOs in the global risk option. McGee also described an administrative add‑on for higher‑spending ACOs that provides a 1.5 percent monthly capitated payment that is not reconciled as part of total cost of care.
On financial guarantees, McGee said LEAD will allow ACOs to bifurcate guarantees (for shared losses/base PCC and EPCC) or maintain a single combined guarantee; the structure can be tailored to the ACO’s chosen security mechanism (surety bond, escrow, etc.). He also reiterated a 2 percent retention withhold that ACOs can earn back based on performance.
CMS said more detailed methodology documents and guardrails on trending and ACPT calculations will be published in the RFA and associated technical papers.
