The ACO REACH model ends December 31, 2026. On January 1, 2027, ACOs and provider groups transition into the Long-term Enhanced ACO Design (LEAD) model, a 10-year program with genuine two-sided risk, broader population accountability, and more financial exposure than any prior CMS accountable care initiative.
HCP National has specialized in stop loss and healthcare reinsurance since 1994, placing over $1 billion in stop loss coverage for clients nationwide. We help ACOs, provider groups, MSOs, and health systems build stop loss and reinsurance programs that match the specific financial risks the LEAD model creates. Request a stop loss and reinsurance consultation now.
The Long-term Enhanced ACO Design (LEAD) model is the successor to ACO REACH. It runs from January 1, 2027 through December 31, 2036, making it the most extended ACO performance period CMS has ever committed to.
LEAD is a voluntary program in which participating organizations take on financial accountability for the total Medicare spending of their attributed beneficiary populations. There are two participation tracks:
One of LEAD’s defining features is that benchmarks are designed to avoid mid-model rebasing during the 10-year run, though CMS may still apply trend and adjustment methodologies. That is intended to give organizations a stable planning horizon, but it also means there is no mid-course correction if a population grows more complex or if market conditions shift. Whatever benchmark an ACO enters with, it lives with for a decade.
The model is explicitly designed to serve high-needs populations, including beneficiaries who are dually eligible for Medicare and Medicaid, those who are home-limited, and patients with significant chronic or complex conditions. These are populations with above-average catastrophic claim exposure.
Ready to understand your risk exposure under LEAD? Request a consultation now.
LEAD was engineered to fix structural problems that kept smaller and rural organizations out of ACO REACH. Lower entry barriers, more flexible benchmarking, and infrastructure support for new entrants are all genuine improvements.
But easier entry does not mean lower risk. For organizations that do participate, the financial stakes are higher than they were under REACH in several important ways.
Stop loss and reinsurance for LEAD participants are commercial insurance products. They are not CMS programs, and they are not included in the model structure. They sit outside LEAD and exist solely to protect the organization’s own financial position when claims or population performance move in an unfavorable direction.
Coverage structures typically used by LEAD participants include:
LEAD does include corridor structures that reduce an ACO’s share of losses as losses deepen. This is a meaningful protection for aggregate performance risk, and we do not want to minimize it.
What corridors do not do is cover individual catastrophic claims. A single catastrophic claim may affect overall performance, but CMS corridors are not the same as commercial individual stop loss reimbursement. It triggers a stop loss policy, if one is in place. Without one, the ACO absorbs that claim directly against its own balance sheet.
To put a number on it: a $2 million claim with a $150,000 individual stop loss deductible results in $1.85 million reimbursed by the carrier. The CMS model structure plays no role in that transaction.
Organizations that assume the model’s built-in protections cover this kind of exposure are taking on risk they may not have fully priced or planned for. CMS corridors and stop loss insurance solve different problems. Both are needed.
High-Cost Individual Claims
The populations LEAD is designed to serve generate a disproportionate share of claims that exceed what any single organization can reasonably absorb without insurance. Advanced oncology, gene and cell therapies, transplant, ESRD complications, specialty drugs, and complex cardiac events are not rare occurrences in high-needs Medicare populations. A single claim of this type can define an ACO’s financial year.
Population-Level Volatility
Attribution changes, coding shifts, and unexpected spikes in utilization can materially alter an ACO’s financial position from one year to the next. Under a program with no benchmark reset, an organization that absorbs a bad year without aggregate protection simply starts the next year in a worse position.
Benchmark Miss Risk
Failing to hit CMS benchmarks, underperforming on quality measures, or ending up on the wrong side of a shared savings reconciliation all create financial liability. In a 10-year model where prior performance shapes future trajectory, these outcomes carry more weight than they did in a shorter-cycle program.
Choosing coverage based on price alone. Policy language varies significantly across carriers, and a lower premium often reflects narrower coverage. The exclusions that make a policy cheap are frequently the same exclusions that eliminate coverage when a major claim occurs.
Not addressing lasering before it happens. Lasering is what occurs when a carrier, at renewal, raises the deductible on a specific high-risk individual rather than pricing them into the general pool. If an ACO’s stop loss program is not structured to limit or manage lasering at inception, the coverage on the highest-risk members can erode exactly when it is needed most.
Mismatched policy and risk structure. Stop loss must be built around how the ACO actually operates: its risk track, its payment arrangements, its population profile, and its CMS benchmark methodology. A policy that does not reflect those specifics will have gaps that only become visible after a claim is filed.
Starting the process too late. Underwriters price stop loss based on claims history and population data. Organizations that engage early get more options and better terms. Those that wait until after the model launches find carriers less willing to offer favorable structures without seeing a full year of performance data first.
HCP National is one of the most experienced stop loss brokerages in the country, with a stop loss team that carries some of the longest tenures in the industry. We work with ACOs and risk-bearing entities to build programs that reflect how their organizations actually function, not generic self-funded employer structures adapted for a healthcare context.
Our process starts with claims data review and financial modeling, moves through stop loss structure design aligned with the ACO’s specific risk track and population, and continues through underwriting, carrier placement, and plan document alignment. We stay engaged through the performance period, not just at placement.
We have worked with organizations at every stage of the value-based care journey, from ACO REACH participants building on existing programs to provider groups that have never taken on downside risk before.
If your organization is entering the CMS LEAD model or planning the transition from ACO REACH, HCP National* can design and place a stop loss and reinsurance program built around your risk track, your population, and your operational structure.
Founded in 1994, HCP National Insurance Services, Inc. is one of the leading independent stop loss and healthcare risk financing brokerages led and owned by a certified minority woman (WBENC & MBE). Our core expertise is stop loss, reinsurance, and healthcare risk financing.
LEAD launches January 1, 2027. The organizations that structure their risk programs now will have better coverage, better terms, and fewer surprises when performance year one begins. Request a consultation today.
*HCP National is not affiliated with CMS. Stop loss and reinsurance products are separately underwritten by commercial insurance markets.
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