The Centers for Medicare & Medicaid Services (CMS) recently updated the alignment and financial methodology for the Long-Term Enhanced Accountable Care Organization Design (LEAD) Model which will better account for the unique characteristics and needs of long term care (LTC) beneficiaries. The updates are outlined in the LEAD Alignment and Financial Methodology Paper. As a reminder, LEAD will succeed the ACO REACH Model beginning January 1, 2027.
AHCA/NCAL has long advocated for policies that recognize the complexity of LTC residents and evaluate providers using methodologies that accurately reflect the populations they serve. The LEAD alignment and financial methodology updates represent meaningful progress toward this goal.
Alignment Improvements
One of the most significant improvements is CMS' refinement of beneficiary alignment. The revised methodology creates exceptions to the Whole Taxpayer Identification Number (TIN) alignment process by excluding certain primary care services furnished during short skilled nursing facility (SNF) stays from beneficiary attribution. This change is intended to ensure LTC beneficiaries are attributed to the clinicians and providers responsible for managing their ongoing care rather than being assigned based on temporary or episodic encounters.
CMS also finalized additional alignment policies, including refined exclusions for certain specialty practitioners and settings, as well as new voluntary alignment methodologies for High Needs beneficiaries. Together, these updates support more accurate attribution, quality measurement, and financial accountability that better reflect LTC delivery.
Benchmark Refinements
CMS also finalized several benchmark refinements that better recognize the complexity and cost of caring for LTC residents.
Key changes include:
- Increasing shared savings under the Professional Risk Option from 50% to 60%.
- Establishing new voluntary alignment benchmark methodologies for High Needs beneficiaries that use more current spending data to better reflect clinical complexity.
- Implementing a 4% risk score growth cap for High Needs beneficiaries for Performance Years 2027 and 2028.
- Refining the Regional Efficiency Adjustment by excluding certain newly participating high-spending TINs from regional expenditure calculations.
- Clarifying methodologies for incomplete benchmark-year data and adjusting historical expenditures.
- Defining a methodology for adjusting benchmarks when beneficiaries become aligned or newly qualify as High Needs during the performance year.
Collectively, these changes create benchmarks that more accurately account for medically complex residents while reducing distortions that could unfairly disadvantage ACOs serving high-need populations. These updates also reflect CMS’ recognition that traditional Medicare ACO benchmarking methodologies do not always align with the realities of LTC populations and care delivery.
Please reach out to AHCA’s Population Health Policy Analyst, Rohini Achal or Nisha Hammel, Vice President, Reimbursement Policy & Population Health with questions.