LEADing with capitation: Can CMS save primary care with predictable payments per patient?

Beginning Jan. 1, 2027, the Centers for Medicare & Medicaid Services (CMS) will launch the Long-term Enhanced ACO Design (LEAD) Model, a 10-year accountable care organization (ACO) initiative that succeeds ACO REACH. Unlike earlier ACO models, LEAD is built to draw in a broader range of practices, including smaller, independent and rural physician groups that have historically avoided ACOs because of financial and administrative barriers. Central to that effort is capitation: predictable, per-patient payments that replace the volume-driven economics of fee-for-service.

For many primary care physicians, capitation remains misunderstood, and sometimes viewed with suspicion. Does it reward doing less? Will patients be under-treated? Can it fund the “hidden work” fee-for-service ignores? Here is an explanation of how capitation functions inside the LEAD model, and why it may offer independent primary care a more sustainable path forward.