As Medicare’s new ACO model begins, kidney care cannot be left behind

In 2027, Medicare will enter an important transition in its continued evolution toward accountable care. The Long-term Enhanced Accountable Care Organization Design (LEAD) Model will begin a 10-year test intended to make accountable care more stable, inclusive and responsive to patients with complex needs.

Additionally, next year the Comprehensive Kidney Care Contracting (CKCC) Model, Medicare’s principal accountable care model for people with advanced kidney disease, is scheduled to sunset. The Centers for Medicare and Medicaid Services (CMS) has not announced whether accountable kidney care will continue through an extension, a successor model or a defined specialty track within LEAD.

The parallel timing of LEAD and CKCC allows CMS to preserve and strengthen accountable kidney care, just as LEAD builds on lessons from nearly 15 years of primary care-based accountable care models. As CMS designs the next generation of accountable care, it must preserve a dedicated model for kidney care. The clinical improvements achieved through CKCC, combined with CMS’s recent financial reforms, make a strong case for building on the model. Allowing it to end without a successor risks losing the clinical infrastructure and provider investments built over the life of the model.

Patients with advanced chronic kidney disease (CKD) and end-stage renal disease (ESRD) are among Medicare’s most clinically complex beneficiaries. They frequently live with multiple chronic conditions, experience 1.5 hospitalizations per person-year, and require intensive care coordination across providers and care settings.

As a result, this population generates outsized cost for the health care system. According to the United States Renal Data System (USRDS), the cost of care for the 3.8 million Medicare fee-for-service (FFS) beneficiaries living with CKD increased to $141.1 billion in 2023, accounting for 36% of total 2023 costs. The yearly per-person cost for Medicare FFS beneficiaries who live with CKD was more than $31,000 in 2023, according to USRDS, about 2.5 times the cost for Medicare FFS beneficiaries without CKD, diabetes or heart failure. For Medicare FFS beneficiaries receiving in-center hemodialysis, annual spending averaged more than $103,000 per person in 2023, according to USRDS.

Despite the need for higher levels of care and more coordination, traditional FFS payment models do not reliably support the interdisciplinary teams, patient education, clinical analytics, medication management, transition planning and continuous outreach necessary to coordinate this complex care. Today, nearly half of patients with Stage 4-5 CKD do not see a nephrologist, and up to 70% begin dialysis unexpectedly in an acute setting, according to USRDS, leading to poorer outcomes and significantly higher Medicare spending.

CKCC was designed to address this fragmentation in care. Kidney Contracting Entities bring nephrologists together with transplant providers and, in many cases, kidney care organizations and other partners. They invest in care coordination and accept accountability for the quality and total cost of their patients’ care. Unlike a model built primarily around a patient’s relationship with a primary care practice, CKCC recognizes that as kidney disease advances, the nephrologist is frequently the principal clinician managing the patient’s care, with the expertise to drive improved outcomes.

The model is working. CKCC encourages organizations to develop interventions tailored to the kidney disease continuum, such as slowing progression where possible, preparing patients for dialysis before a crisis occurs, increasing the uptake of home dialysis, improving access to kidney transplantation and educating patients to make informed decisions about their care.

The second independent evaluation of the model, released earlier this year, found significant improvements across several measures closely linked to patients’ experiences and outcomes. Optimal starts to treatment for ESRD increased by 31%. Home dialysis increased by 10%, home dialysis training increased by 22%, and preemptive transplant waitlisting increased by 37%. Patients in the model also reported receiving more information about their treatment options, while patient activation scores improved over time.

Kidney care needs a dedicated place in accountable care

The CMS Innovation Center now faces a consequential choice about the future of specialty-led accountable care. LEAD creates new opportunities to integrate specialists into accountable care, but it remains organized around primary care.

One of those tools is CMS-Administered Risk Arrangements (CARA), a voluntary LEAD initiative that allows accountable care organizations (ACOs) to establish episode-based risk arrangements with specialty providers. Through CARA, ACOs and specialists can negotiate target prices for defined episodes of care and share accountability for their cost and performance.

CARA could strengthen specialist participation in accountable care, but it is not a substitute for a kidney-specific model built around longitudinal, nephrologist-led accountability. Patients with advanced kidney disease require sustained management across CKD, dialysis, transplantation and supportive care — not accountability limited to individual episodes of care.

A specialist arrangement within a broader ACO may complement that work, but it does not necessarily replicate the focused accountability, clinical expertise and care coordination that CKCC was designed to provide. As kidney disease progresses, nephrologists often become the clinicians most responsible for treatment decisions, care coordination and patient outcomes.

As CMS shapes the next generation of accountable care, it should determine how to preserve a model for accountable kidney care, whether through a dedicated successor model, a clearly defined track within LEAD where patients align through nephrologists, or an extension of CKCC while a longer-term approach is developed.

CKCC’s early results do not tell the whole story

By law, the Innovation Center must design models that either generate savings for Medicare, improve quality or — ideally — both. But formal evaluations, like those for all but a handful of models CMS has tested, have found that the models have resulted in a net increase in Medicare spending after accounting for incentive payments. The most recent evaluation found CKCC increased net Medicare spending by an estimated $275 million in 2023.

CMS responded to the model’s early spending results by making substantial changes beginning in 2026. The agency increased benchmark discounts, reduced the CKD Quarterly Capitation Payment, eliminated the kidney transplant bonus and extended CKCC through 2027. CMS stated these changes were intended to improve the model’s financial performance while preserving its quality gains.

An independent actuarial analysis by Wakely Consulting Group illustrates how consequential those changes may be. Wakely applied the 2026 payment policies retrospectively to historical financial data. It estimated that the revised policies would have reduced total model payments by approximately 45% in 2023 and 40% in 2024. Under that counterfactual analysis, the model would have generated an estimated $26 million in net savings to CMS in 2023 and $90 million in 2024. Those potential net savings jump to $112 million and $118 million in 2023 and 2024, respectively, if current model participants were in full-risk tracks. Those findings tell us that policy makers should not rely solely on financial results from a model design that CMS has already substantially revised.

The Wakely analysis also reinforces a key lesson from Medicare payment reform. Accountable care models rarely reach their full potential immediately. Building clinical infrastructure, integrating data, changing practice patterns and engaging patients takes time. The Medicare Shared Savings Program (MSSP), for example, did not generate cumulative net savings for CMS until its fifth year, yet has since produced substantial and sustained savings. In 2024 alone, MSSP generated more than $6.6 billion in savings and returned $2.5 billion back to CMS. CKCC deserves the same opportunity to mature under its revised financial structure before a final judgment is made about its long-term value.

A road map for the future

A successor could take several forms: an additional extension of CKCC, a refined kidney-specific model or a dedicated specialty track within LEAD. Whatever form the next model takes, its design should preserve the progress already made while addressing the operational and financial barriers that could undermine long-term participation.

First, CMS should expand access for patients and nephrologists. Model participation should be managed at the tax identification number level, consistent with LEAD, while allowing providers in hospital systems, multispecialty groups and academic institutions to seek exceptions when overlap rules would otherwise prevent participation.

Beneficiary alignment should similarly reflect how kidney care is delivered. A 12-month look-back based on qualifying nephrology services would create a clearer and more current connection between patients and participating providers. CMS should also establish an appropriate pathway for patients with Stage 3B CKD, when education, medication management and earlier intervention are critical to delay progression.

Second, the financial methodology must accurately reflect the complexity and changing health status of the population. Patients with Stage 4 or 5 CKD and ESRD should be treated as high-needs beneficiaries, with a consistent concurrent risk-adjustment methodology that captures disease progression and changes in treatment status during the year.

Benchmarks and trends should also be based on the populations served. Spending trends for patients with late-stage CKD should reflect their experiences, not those of the broader Medicare population. CMS should avoid policies that punish organizations for savings they have already produced, preserve prior savings and maintain advance shared savings payments that support up-front investment. Benchmark discounts should be limited to 3%, with the discount for ESRD applied only to nondialysis spending, as dialysis costs are largely nondiscretionary and difficult for participants to influence.

Third, quality accountability should be meaningful, predictable and proportionate. CMS should reduce the quality withhold to 3%, consistent with LEAD. Kidney care measures frequently involve small denominators and year-to-year variation that may not reflect genuine differences in care. A smaller, better-targeted withholding would preserve a strong incentive for improvement without making financial performance excessively dependent on statistical volatility.

The model should focus on three or four measures that participants can understand and influence. Optimal Starts and the Patient Activation Measure should remain central and be supported by more timely data and clearer calculation methods. A hospitalization or readmission measure could also be appropriate if benchmarked against comparable kidney populations and incorporating kidney-specific acuity.

Finally, CMS should evaluate the model that exists today, not only the version that operated in its earliest years. Formal evaluations should continue to report observed results in accordance with the policies in place during each performance year. But CMS should also publicly reassess earlier years using the major design changes now governing CKCC, including reduced capitation payments, stronger savings guarantees, elimination of transplant bonuses, changes to skin substitute payment and the removal of providers that have exited the model. This would help policy makers distinguish between the effects of specialty-led care delivery and the consequences of an early payment design that CMS has already changed.

Together, these refinements would create a model or track that is easier to enter, more stable to operate, more accurate in measuring financial performance and more focused on outcomes that matter to patients.

Build on what Medicare has begun

CKCC has demonstrated that specialty-focused accountability can change how kidney care is delivered. Patients are more likely to begin dialysis under optimal conditions, use home dialysis, receive earlier consideration for a transplant and obtain information that helps them make consequential decisions about their care.

CMS has already revised the features most responsible for the model’s early net spending. The rational next step is to assess those changes, preserve the clinical infrastructure that has been built and establish a stable long-term program for accountable kidney care.

Medicare is designing the next generation of accountable care. Patients with advanced kidney disease — and the specialists who care for them — must have a clear place in it.

Keith Bellovich, D.O., MBA, is the chief nephrologist at Strive Health and a nationally recognized voice in kidney care advocacy and quality improvement.

Mary Dittrich, M.D., FASN, is chief medical officer and executive vice president of U.S. Renal Care as well as co-founder and partner of Boise Kidney and Hypertension Institute.

Jeffrey Giullian, M.D., MBA, serves as chief medical officer of DaVita Kidney Care.

Carney Taylor, M.D., MBA, brings more than 25 years of clinical experience as a leading nephrologist to his role as chief medical officer at Interwell Health.

Heather Trafton, MBA, is CEO of Evergreen Nephrology.