CMS’ LEAD Model Advances Specialist Integration in Accountable Care

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Key Takeaways:

• Specialists are the missing link in value-based care. While primary care is largely aligned to ACO models, specialty care - where most cost and margin sit - remains disconnected.
• CMS' LEAD Model signals a shift, but execution will fall to health systems. LEAD introduces longer time horizons, new payment flexibility and pathways for specialist participation but stops short of full structural alignment.
• The window to act is closing. As payment models evolve, systems that proactively integrate specialty care will be better positioned to manage risk and protect margins.

For more than a decade, value-based care has largely been a primary care story.

The Centers for Medicare & Medicaid Services' (CMS) flagship model - the Medicare Shared Savings Program (MSSP) - has successfully drawn primary care physicians into accountable care. Today, roughly 77 percent of primary care physicians participate in MSSP ACOs, according to the Medicare Payment Advisory Commission.

But one of the biggest drivers of healthcare spending remains largely outside the value-based ecosystem: specialists.

Across cardiology, oncology, orthopedics and other high-cost disciplines, participation in value-based payment models trails behind primary care, with specialists 40-50 percent less likely to participate in value-based payment models than their primary care counterparts.

That gap isn't just a policy issue. For hospitals and health systems, it represents one of the largest remaining barriers to meaningful cost reform and one of the biggest strategic risks to the sustainability of value-based care.

The newly announced Long-term Enhanced ACO Design (LEAD) Model signals that CMS understands this reality. The question now is whether health systems will seize the opportunity to integrate specialists into accountable care or continue operating two parallel economic models inside the same organization.

Why Specialists are the Missing Link in Value-Based Care

The economics of hospital care help explain the problem.

Much of healthcare spending - and much of hospital margin - flows through specialty services. High-acuity procedures, advanced diagnostics and chronic disease management represent both the largest cost centers and the most significant revenue streams for health systems.

That creates a fundamental tension.

Value-based care requires reducing unnecessary utilization and coordinating care across the continuum. But fee-for-service incentives often reward volume in precisely the areas where spending is highest: specialty services.

As a result, many accountable care strategies focus primarily on primary care transformation while leaving specialty care largely untouched.

That approach is increasingly unsustainable.

Without specialist engagement, hospitals cannot meaningfully bend the total cost curve. And as Medicare continues shifting toward population-based payment models, systems that fail to integrate specialists into value-based strategies may find themselves managing increasing financial risk without the clinical alignment needed to succeed.

A New Path: Integrating Specialists into Accountable Care

CMS has attempted to address specialist participation through a series of stand-alone specialty payment models over the past decade. In fact, when excluding drug payment and Medicare Advantage models, the number of specialty-focused payment models released by the Center for Medicare and Medicaid Innovation rivals - and in some years exceeds - those designed for primary care.

Yet participation remains limited.

One reason is structural. Specialists cannot easily participate in models outside their clinical domain, which dramatically limits the number of relevant opportunities.

But a more scalable approach is emerging where health systems opt to integrate specialists directly into population-based models such as ACOs.

For hospitals and health systems that already employ large numbers of specialists, this approach offers a powerful advantage: the infrastructure to coordinate care across primary and specialty services already exists.

What's missing is the policy framework and financial incentives to align specialists with population health goals.

Four Policy Changes That Could Accelerate Specialist Integration

To unlock the full potential of accountable care, CMS should consider several targeted policy changes.

1. Allow specialty-based attribution.
Current attribution methodologies overwhelmingly assign accountability to primary care physicians. Introducing limited specialist attribution for chronic conditions such as cardiovascular disease, diabetes or chronic kidney disease could better align accountability with clinical responsibility.

2. Establish benchmarks tailored to specialty populations.
Patients managed by specialists often have higher acuity and more complex care needs. Unique benchmarks would create clearer financial signals and more realistic cost targets.

3. Adopt concurrent risk adjustment.
For medically complex populations, concurrent risk adjustment better captures changes in patient health status and improves cost predictability for participating organizations.

4. Address the "ratchet effect."
When successful cost reductions lead to lower future benchmarks, providers may hesitate to participate in value-based models. Adjustments that preserve the benefits of efficiency while maintaining stable incentives are critical for long-term participation. Rather than using a controversial administrative benchmark, CMS could simply add back a higher portion of savings to future benchmarks.

Together, these policies would create a stronger pathway for specialists to engage meaningfully in accountable care.

Where the LEAD Model Moves the Conversation Forward

The newly announced LEAD Model represents CMS' most ambitious attempt yet to address some of these structural challenges.

Designed as a 10-year voluntary model running from 2027 through 2036, LEAD introduces several elements aimed at improving stability and participation in accountable care.

Most notably, the model:

• Extends the performance period to reduce the uncertainty created by frequent rebasing,
• Introduces flexible population-based payments,
• Provides infrastructure support for rural providers and
• Creates new pathways for episode-based arrangements with specialists through CMS-Administered Risk Arrangements (CARA).

The model also distinguishes high-needs and dual-eligible populations as a separate cohort with unique benchmarks and concurrent risk adjustment, an important step toward recognizing the financial realities of caring for medically complex patients.

While LEAD stops short of enabling full specialist attribution within ACOs, it represents a meaningful step toward integrating specialty care into population-based models.

Turning Specialist Integration from Policy into Operational Reality: How Premier Can Help

For many health systems, the challenge of integrating specialists into accountable care is not conceptual - it is operational.

Aligning specialists with population health goals requires new capabilities across data analytics, physician engagement, episode management and payment model design. Health systems must identify where specialty spending variation exists, create incentives that align specialists with total cost of care and build care coordination models that support patients with complex conditions.

This is where Premier plays a critical role.

Through its data, advisory services and performance improvement collaboratives, Premier works with health systems to help translate value-based policy into practical implementation strategies.

That includes:

Identifying specialty cost, utilization and quality variation.

Using national benchmarking and clinical and claims data, Premier helps health systems pinpoint where specialty care patterns are driving avoidable cost or variation in outcomes. Premier can also help identify high-quality and cost-efficient specialists to engage in the ACO's network.

Designing specialty engagement strategies for value-based care.

Hospitals must move beyond primary care-centric population health models. Premier supports health systems in developing physician alignment strategies that bring specialists into accountable care frameworks while maintaining clinical autonomy and engagement.

Building episode-based and population-based payment arrangements.

As CMS introduces new mechanisms such as episode-based risk arrangements or CARA as in the LEAD model, health systems need the infrastructure to manage these models effectively. Premier helps organizations structure and operationalize these arrangements while aligning incentives across providers.

Scaling care coordination for complex populations.

Patients managed by specialists often represent the highest-cost and highest-risk segments of the population. Premier works with health systems to design care coordination and clinical pathway strategies that improve outcomes while reducing unnecessary utilization.

By combining policy insight with operational expertise, Premier helps health systems navigate the transition from fee-for-service specialty care toward integrated, value-based care models.

As CMS expands models like LEAD and continues its push toward population-based payment, health systems face a narrowing window to prepare for a future in which specialty care is no longer insulated from value-based accountability.

Organizations that proactively align specialists with population health strategies will be better positioned to manage risk, stabilize margins and improve patient outcomes.

Those that delay may find themselves struggling to adapt as payment reform accelerates.