A recap of our May 7 webinar
If you missed our live session, “How leading organizations will win under CMS LEAD RFA,” don’t worry. My colleague Jonah Broulette, Principal and Consulting Actuary at Milliman, and I walked our audience through what’s actually new in CMS’s LEAD model, how it stacks up against MSSP, and the analytics capabilities that separate ACOs that thrive from ACOs that simply survive.
Key takeaways
- LEAD is a new CMMI ACO model that shares its core structure with MSSP but introduces a high-needs cohort, a 10-year agreement, an administrative add-on payment for higher-cost ACOs, and a global track discount.
- LEAD gives lower-spending participants a 50/50 historical-to-regional rate blend at entry, compared to roughly 35% for new MSSP entrants. Higher-spending ACOs use their own historical spending only, with a 1.5% administrative add-on as additional support.
- The 10-year agreement effectively skips a rebase and shifts to a full rate book in the final five years, which can be a long-term advantage for ACOs that outpace their region.
- Analytics readiness determines success. Strong financial forecasting, specialist performance measurement, and patient-level identification matter more than program choice alone.
What is the CMS LEAD model?
The CMS LEAD model is a new value-based care program from the CMMI that builds on the architecture of MSSP and ACO REACH. It uses a three-year baseline benchmark trended forward with a blend of national and regional rates, prior savings adjustments, and a 10-year participation agreement. LEAD introduces a separate high-needs rate cell with a concurrent risk adjuster and offers both a professional track and a global track that takes 100% upside and downside risk.
Part 1: What’s actually new in LEAD?
Jonah kicked things off by setting expectations. If you’re familiar with MSSP and REACH, the bones of LEAD will feel familiar. Three-year baseline benchmarks, trended forward, with a blend of national and regional rates. Prior savings adjustments and regional adjustments are built in to slow the ratchet effect, where ACOs that generate savings early get penalized with tighter benchmarks down the road. The basic architecture is consistent.
But the differences are where it gets interesting.
How does LEAD differ from MSSP at a glance?
| Feature | LEAD | MSSP |
|---|---|---|
| Agreement length | 10 years | 5 years |
| Regional blend at entry | 50/50 historical/regional | 35% regional for new entrants |
| High-needs cohort | Carved out, concurrent risk adjuster | Included in standard rate cells |
| Administrative add-on | 1.5% of benchmark for regionally inefficient ACOs | None |
| Global track discount | 1.75%-3% | N/A |
| Final-years benchmark | Full rate book in last 5 years | Continues blended benchmark |
Rate cells: LEAD carves out high-needs beneficiaries into their own cohort with a concurrent risk adjuster. The math can swing in either direction depending on how complex your population is relative to your region.
The 50/50 blend: LEAD participants get a 50/50 historical-to-regional blend at entry, compared to roughly 35% for new MSSP entrants. That head start favors ACOs already outpacing their region.
The administrative add-on: Regionally inefficient ACOs entering LEAD receive a 1.5% administrative add-on payment, essentially risk-free revenue that offsets the global track discount. It’s a clear on-ramp for higher-cost ACOs that MSSP doesn’t offer.
The discount: LEAD’s global track carries a 1.75% to 3% discount, which behaves very differently from an MSR. Unlike an MSR, a discount pulls savings down uniformly regardless of how strong your performance is. Worth modeling carefully.
The 10-year agreement: Effectively skips a rebase and shifts to a full rate book in the final five years. As Jonah pointed out, that math can break in either direction depending on how far you’ve moved against your region. Worth modeling across all 10 years, not just the first few.
Jonah closed his section with three big decision points every ACO should be wrestling with:
- How does your organization weigh the stability of MSSP against the opportunity (and volatility) of LEAD?
- How does the high-needs cohort affect your specific population and providers?
- Are the capitation mechanisms and cash flow features in LEAD valuable to your organization?
There’s no universally right answer. The right answer depends on your data.
Part 2: The analytics that drive success
When I picked up from Jonah, I led with a point I want to repeat here. Regardless of which program you choose, your success depends on your analytics. I framed the conversation around four key competencies (financial analytics, right-sizing utilization, engaging clinicians, and identifying patients with additional needs) and walked through six concrete analytic capabilities every value-based care organization should have.
- Setting up for success: Before you sign anything, you should be analyzing which program fits your population and your providers. That includes understanding attribution, both prospective and retrospective, and modeling how the contract terms will actually play out for you.
- Predictable financial forecasting: Multi-contract environments are messy. Different terms, different populations, different timelines. I emphasized standardization, granularity, and timeliness. You can’t wait until the end of a contract period to find out how you did. You need rolling forecasts with high and low estimates across every contract you hold.
- Initiative design: This is where the work actually shows up. Where is utilization out of line with benchmarks? Where are coding gaps? Where are quality opportunities? I showed a sample analytic on inpatient medical spend, drilling from a high-level gap-to-benchmark view all the way down to a patient-level action list (think: heart failure patients with high admission rates, ripe for a care management program).
- Specialty care: With LEAD’s CARA component, the resurgence of CJR, and the new mandatory TEAM model, CMS is clearly leaning into specialty care. There can be wide variation in total cost of care for an episode of, for example, knee arthroplasty, driven by differences in the site of surgery, post-acute care use, and other factors. The takeaway: you need provider-level performance analytics at the specialist level, plus the ability to share those insights back with PCPs to drive better referrals.
- Provider enablement: PCPs are already overwhelmed. Pile on more data and you’ll get nowhere. PCP scorecards need to be easy to digest, focused on what providers can actually control, and ideally delivered inside the EHR. A well-designed dashboard surfaces a PCP’s panel at a glance, flagging patients for follow-up, including open care gaps, recent ED visits, and prioritized actions.
- Identifying patients in need: The final piece is being able to stratify your population by high risk scores, frequent ED utilization, multiple chronic conditions, or polypharmacy needs, and to quickly enroll those patients in the right support programs.
Frequently asked questions
Should ACOs use claims data or clinical data for value-based care analytics?
Both. Claims data is the source of truth for financial measurement because contracts are adjudicated against it. Clinical data adds the timeliness and patient-level detail needed to close gaps and put information in front of providers at the point of care. The strongest analytics programs use both together.
Will AI-generated risk scores replace HCC under LEAD?
CMS has signaled a move toward an AI risk adjuster, but the details are still unknown. The most likely effect is redistribution rather than expansion of risk credit, meaning the model will incorporate factors beyond what providers code. ACOs that have historically been strong coders may see a small reduction. Weaker coders may see a small lift.
How will the LEAD rate book be set?
CMS has not finalized its approach. The most likely starting point is a simple regional average risk-adjusted cost, similar to what MSSP and REACH use today. CMS could move toward a Medicare Advantage-style smoothed approach over time, but nothing has been confirmed.
How does LEAD’s global track discount differ from an MSSP MSR?
An MSR (minimum savings rate) only activates if savings fall below a threshold corridor. A discount, by contrast, always reduces savings uniformly by its percentage, even when an ACO generates significant savings. A 2% discount on 20% in savings still pulls the result down to 18%.
Is LEAD a better fit than MSSP for higher-cost ACOs?
Often, yes. LEAD provides an on-ramp for regionally inefficient ACOs through the 1.5% administrative add-on payment and the absence of any negative regional adjustment to their benchmark, neither of which MSSP offers. Lower-cost ACOs may find MSSP’s lack of discount more favorable in the early years.
The bottom line
LEAD isn’t a clean upgrade from MSSP, and it isn’t a step backward either. It’s a different model with different math, one that rewards organizations that know their data, plan for the long term, and have the analytics to back it up.
If you’re weighing LEAD versus MSSP, the path forward starts with one question: what does your data actually say?
Ready to take the next step?
Watch the full webinar: Catch the live Q&A and all the slides Jonah and I walked through. Access the recording.
See how your data stacks up: Our team can help you model your population against both LEAD and MSSP so you can make this decision with confidence. Get in touch.
