ACO LEAD’s New Entrant track lowers the day-one bar for CMS’s Long-term Enhanced ACO Design model: newly formed ACOs and those transitioning out of MSSP don’t need 5,000 aligned Medicare beneficiaries in Performance Year 1. They need 1,000.

That lower starting point comes with a catch. New Entrant ACOs must grow their aligned-beneficiary count by 1,000 a year, every year, until they reach the same 5,000-life threshold Renewing ACOs must hit from the start. For growth and operations teams, that turns the requirement from a single hurdle into a five-year discipline, since a missed growth target compounds into the next Performance Year’s minimum.

Getting there through manual outreach, spreadsheets, and one-off mailings creates its own risk: rejected forms, thin audit trails, and no clear read on which campaigns move the needle year over year. Mabel’s voluntary alignment platform closes that gap, running compliant alignment and notification campaigns at scale, year after year rather than in a single push.

Before building a growth plan, New Entrant ACOs need a clear picture of what the ramp requires and how it differs from what Renewing ACOs face.

Where LEAD’s Economics Change the Calculus

LEAD runs for 10 years, from January 1, 2027 through December 31, 2036, succeeding ACO REACH’s 74 participating ACOs when that model winds down at the end of 2026. Fixed benchmarking is the defining shift: each ACO’s baseline is set from historical performance and held constant for the full period, without the recalibration that eroded shared savings under earlier models.

The terms behind that fixed benchmark also compare favorably to ACO REACH’s final years, per CMS’s LEAD payment fact sheet:

  • Benchmark discount: 1.75% to 3% for Global Risk ACOs under LEAD, versus a REACH discount that climbed from 3% in 2023–2024 to 4% in 2026
  • Quality withhold: a flat 3% under LEAD, versus the 5% CMS set for REACH’s final performance year
  • Retention incentive: ACOs that exit after one performance year face a 2% benchmark reduction at final settlement, per an actuarial analysis from Wakely

CMS also tightened REACH’s risk corridors from 25% to 10% for its final year, one more reason organizations weighing an MSSP-to-LEAD move are comparing LEAD’s terms against where they stand today.

Why New Entrants Get a Ramp Instead of a Flat 5,000

Renewing ACOs need at least 5,000 aligned beneficiaries starting in Performance Year 1, with a minimum of 3,000 claims-based aligned in a qualifying base year, per CMS’s LEAD Alignment and Finance paper. New Entrants get a graduated schedule instead, phased over five years because a newer organization hasn’t had time to build the provider relationships and claims history a 5,000-life base requires. CMS wants any ACO at meaningful scale before a decade-long benchmark locks in; for a New Entrant, that scale is a multi-year build, not an application milestone.

The Five-Year Alignment Schedule

Per CMS’s LEAD Alignment and Finance paper, a standard New Entrant’s minimums rise on this schedule:

  • Year 1: 1,000 total aligned, including at least 600 claims-based in a qualifying base year
  • Year 2: 2,000 total, 1,200 claims-based
  • Year 3: 3,000 total, 1,800 claims-based
  • Year 4: 4,000 total, 2,400 claims-based
  • Year 5: 5,000 total, at which point the ACO is held to the Renewing ACO standard
  • High Needs and ESRD-focused ACOs follow a lower version of the same climb, starting at 800 and reaching 1,600 by Year 5

CMS allows a temporary buffer of up to 10% below the applicable minimum for two performance years before triggering a termination review. On a rising schedule, that buffer offers less margin than it would against a flat target.

Base-year weighting works differently for New Entrants too. CMS weights a New Entrant’s three base years at 10%, 30%, and 60%, favoring the most recent year, while Renewing ACOs get equal one-third weighting. 

Since the most recent base year counts for 60% of the benchmark, a strong final year of alignment growth has an outsized effect on where the long-term benchmark lands. A valid voluntary alignment attestation generally takes precedence over claims-based assignment, and ACOs can choose prospective alignment set annually or a hybrid model with monthly voluntary updates and an April 1 claims-based refresh.

Hitting a Moving Target Every Year

The most common failure point isn’t strategy, it’s execution volume repeated on a schedule. A single mailing to unaligned beneficiaries rarely adds a clean 1,000 net-new aligned lives, and a New Entrant has to clear that bar five years running. Reaching each year’s number typically requires:

  • Coordinated outreach across mail, email, and in-clinic touchpoints, not a single channel
  • A complete, provider-verified patient roster before the first campaign launches
  • Segmentation of the unaligned population by provider relationship and channel responsiveness
  • Form intake and eligibility checks that don’t produce a high manual rejection rate from data-entry errors

Organizations building this in-house often find administrative overhead scales faster than results, especially once a second and third year of targets stack on the first. A Performance Year 2 target is set the moment Year 1 ends, so the planning window for 2,000 aligned lives opens well before most teams start thinking about it. Building a standing alignment operation, rather than a campaign reinvented each fall, keeps the beneficiary count climbing on schedule and guards against drifting into the 10% buffer.

Notifications and Audit Readiness During the Ramp

CMS’s alignment and finance guidance requires ACOs to notify beneficiaries whose voluntary alignment carries forward from ACO REACH or MSSP into LEAD, including instructions on how to opt out. Further operational guidance on notification mechanics is expected closer to the transition, but the underlying obligation, timely notice with an opt-out path, is already established.

For a 10-year model with a five-year ramp built in, audit readiness can’t be an afterthought: every notification, channel, and response needs a timestamped record that holds up years later, not just at the next annual review. Mabel’s process for managing beneficiary notification letters, including tracking and resolving undelivered mail, follows the repeatable workflow CMS expects, secured under SOC 2 Type II compliance.

Mabel in Practice

One ACO REACH organization working with Mabel had over 100,000 eligible fee-for-service lives but only 40% claims-aligned, with a prior rejection rate on returned forms as high as 50%. Mabel took over campaign execution and response quality control, adding real-time channel-level tracking the organization lacked, producing a 30% increase in net-new alignments over 12 months.

Beyond individual campaigns, Mabel reports that one in three REACH ACOs use its platform for voluntary alignment, having processed more than 750,000 forms with error rates held under 1%. That scale and error rate is a useful benchmark for ACOs weighing build-versus-buy.

Staying on Track for the Next Five Years

Reaching 5,000 aligned lives as a New Entrant isn’t a single event. It’s the product of a sustained alignment operation adding roughly 1,000 beneficiaries every year for five years, with beneficiary notifications treated as ongoing infrastructure rather than an annual scramble. If your organization is working through its New Entrant schedule, or weighing an MSSP-to-LEAD transition, reach out to Mabel to see how your current alignment numbers compare to where they need to be this year and next.

Frequently Asked Questions

Is participation in ACO LEAD mandatory for ACOs currently in MSSP?

No, LEAD is a voluntary CMS Innovation Center model. Once Performance Year 1 begins on January 1, 2027, LEAD ACOs and their participant TINs may not simultaneously participate in MSSP, with overlap determined at the individual TIN level per the LEAD RFA. The one exception is the Implementation Period, September 15 through December 31, 2026, during which participation in both is permitted.

Can a new organization still become a New Entrant ACO in a future LEAD cohort?

The first cohort’s application window closed May 17, 2026, so organizations cannot apply to it today. CMS’s LEAD FAQ notes that future cohorts are expected, though dates have not been announced, and invites non-binding Letters of Interest in the meantime. Organizations planning for a future cohort can use the interim to build alignment volume, since a strong recent track record helps once a New Entrant’s ramp officially begins.

What is Non-Primary Care Capitation (NPCC)?

NPCC is a LEAD payment mechanism that extends prospective capitation beyond primary care to specialty services, something neither ACO REACH nor MSSP offers today, according to analysis from Bass, Berry & Sims. It works alongside CMS Administered Risk Arrangements (CARA), which let ACOs set up episode-based risk arrangements directly with specialists. Together they give LEAD ACOs more predictable payment for care coordinated outside the primary care setting.

Can dually eligible Medicare-Medicaid beneficiaries be aligned under LEAD?

Yes, CMS’s Innovation Insight on LEAD lists Medicaid integration for dually eligible beneficiaries as a key design feature. ACOs serving significant dual-eligible populations, including New Entrants building their base, should review that guidance closely, since integration can affect benchmarking differently than a Medicare-only population would.

Can a LEAD ACO earn back more than the standard share of its quality withhold?

Yes. High-performing ACOs can earn back more than the standard 3% through LEAD’s High Performers Pool, per COPE Health Solutions’ analysis of the benchmarking methodology. The pool is funded by withhold dollars forfeited by underperforming peers rather than new CMS money, so the additional earn-back depends on how the rest of the cohort performs each year.

Does LEAD use BNL or MSSP’s BIN terminology?

LEAD, like ACO REACH and other Innovation Center models, uses Beneficiary Notification Letter (BNL) terminology. MSSP operates under a separate standardized written notice requirement, commonly shorthanded as a Beneficiary Information Notice (BIN) even though the regulation assigns no formal acronym. An ACO with both LEAD and legacy MSSP relationships needs to track which framework applies to which beneficiary population.