Featured topic and speakers
In this episode of Moving Medicine, AMA CEO John Whyte, MD, MPH, talks with Abe Sutton, JD, director for the Center for Medicare and Medicaid Innovation (CMMI) and deputy administrator for CMS, and Gary Bacher, JD, MPA, chief strategy officer for the Center for Medicare and Medicaid Innovation (CMMI), about the potential benefits and challenges of a new outcome-aligned payment model called LEAD, and what it means for physicians and patients. Learn more at CMS.gov.
Speakers
- John Whyte, MD, MPH, CEO and executive vice president, American Medical Association
- Abe Sutton, JD, director, Center for Medicare and Medicaid Innovation (CMMI); deputy administrator, Centers for Medicare & Medicaid Services (CMS)
- Gary Bacher, JD, MPA, chief strategy officer, Center for Medicare and Medicaid Innovation (CMMI)
Transcript
Sutton: If we can't draw in rural practices, small practices, independent practices and give them a way to succeed in accountable care, we're shutting them out from a path to flexibility, a path to freedom to practice and serve patients.
Dr. Whyte: Welcome to Moving Medicine, a podcast from the American Medical Association where we explore the policies, innovations and opportunities transforming health today. I'm Dr. John Whyte, the CEO of the AMA. We have two guests today.
Our first is a return guest who's at the center of driving innovation and change in health. Abe Sutton is the director of the Center for Medicare and Medicaid Innovation, CMMI, and deputy administrator for CMS. Also joining us is Gary Bacher, the chief strategy officer at CMMI.
Today we're going to discuss CMMI's latest innovation, the LEAD model, an evolutionary step in accountable care for Medicare beneficiaries. From risk and accountability to payment innovation and care integration, LEAD has significant implications for physicians navigating value-based care.
We'll unpack what makes this model different, what it means for patients and physicians, and what opportunities as well as challenges it holds for the future. Welcome to you both.
Sutton: Thank you for having us.
Bacher: Thank you.
Dr. Whyte: Before we dig into the details, Abe, I'd love to hear you help explain your vision for accountable care organizations.
Sutton: Happy to do so and thank you for the opportunity to come on the show and speak about the LEAD model. Accountable care is something that's really important to encourage in our health system, particularly for patients on Medicare. Too much of medicine is 15-minute increments, and in that 15 minutes, there's someone sitting with you who's talking to you about your care journey, who's trained and has the expertise needed to guide you.
And then the 15 minutes end. You go out to the reception desk, and you pay anything that you need to for your bill. And there's often little follow up between, not because anyone is misintentioned or not looking out for people but because we don't pay for it in our health care system.
I don't want the fragmentation that patients experience in our health care system. I don't want the disjointed nature of care when too much of medicine is a factory, going from one billable services to another. I want to encourage more seamless care, more coordinated care, more of a system where physicians are supported in reaching and supporting patients so you don't have that disjointed nature.
Dr. Whyte: And we'll get to the model. But I want to point out that many of our members may be saying, you know what, Abe? ACOs are not new. They've been around for a while. What have we learned, even in the models over the last 15 years, where we've seen success and where the challenges have been?
Sutton: I think it's fair for your members to be sitting and saying that. Not every ACO approach has worked. Too often we've taken a cookie cutter approach and not given physicians real flexibility for how to approach things.
We've had tons of burden, so think about the quality reporting measures that you have to submit and whether you have to give it to us in an additional way to be in an ACO. And your requirements for the electronic medical record that come with it, that's just a lot to unpack and a lot of administrative spend and bureaucracy that might be a barrier to participating.
Oftentimes we have not allowed for global total cost of care risk. There have been some instances of it, but we've sometimes lacked the true incentive to deliver care in a different way. But even when we've set up that incentive, we may have failed to give you data in a timely manner to let you know, all right, I need to intervene in a different manner with that patient.
And let's say we got that right. We set up the right incentive. We gave you the right data. We may not have allowed you to actually deliver care in a different way.
We might have kept you, inadvertently, in the same straitjacket of a fee schedule and not gone and given you the flexibility to waive a copay for a beneficiary or to go in and say, actually, you need this service. And officially, Medicare's rules wouldn't otherwise allow for it. But I know it's right for you, and I'm going to allow it because I'm looking out for your interest.
More flexibility, less burden, that's what matters here for setting up an accountable care organization for success.
Dr. Whyte: Well, then let's dig into the new model and how it's going to address those issues that you've just discussed. Can you give us some more details?
Sutton: So what LEAD, which is the Long-Term Enhanced Accountable Care Organization Design model, or LEAD model, is about is setting up a long-term incentive, where patients can be supported by physicians with new flexibilities as well as a predictable structure for what the incentive is with clear data given to physicians. And Gary set up this entire structure building on the successes and lessons of the REACH ACO model.
Dr. Whyte: Now, you and I have talked before about independent practice, small practices. What's the impact on independent and small practices, Gary? How would they participate in this model?
Bacher: So one of the big focus points of the model really is bringing in independent physician-led practices, also bringing in practices from rural areas and also those that care for specialized patients and complex patient populations. They can participate in the model in the same manner as any other participant, but we've done some things that will be particularly helpful for them.
For example, if they haven't participated in a model before, they'll start off with their full historical experience as the benchmark, plus an add on. The add on is meant to basically give them a ramp onto the model. And then that add on is then translated into a capitation payment, so they're getting better cash flow.
And then for those that are taking care of specialized patient populations, they tend to have smaller panels. We're giving them smaller minimum alignment level.
Dr. Whyte: Now, do you need these smaller, independent practices to participate, for ACOs to succeed?
Bacher: We think it's very important for the country that those organizations be part of the mix.
Sutton: I think we need this for our health care system. It's not about success in value-based care or success of accountable care. It's about what our medical system looks like and what type of practices we see flourish and how that gives patients more choice.
We need a system where, even if you're not part of a big hospital system, you're able to succeed. If we can't draw in rural practices, small practices, independent practices, and give them a way to succeed in accountable care, we're shutting them out from a path to flexibility, a path to freedom to practice and serve patients.
Dr. Whyte: But if we know that independent and smaller practices are decreasing in terms of their viability in practice, does this model help them succeed and thrive in what's a very competitive environment right now?
Sutton: I think there are some steps in this that do take efforts in that direction. It's not enough on its own. There's a lot more that's needed to move there.
I think this is a system-wide change where we need to look across, how could we rebalance the playing field for independent practice? And I think that should be a policy goal. And it's one that we are working to advance. But within this model—
Dr. Whyte: So that's a policy goal of CMS, to level that playing field?
Sutton: 100%. When we released our strategy earlier in 2025, we explicitly stated that as a goal for our organization, of what does that level playing field look like? And how could it advance?
And I don't think this should be a partisan thing. I think encouraging competition in our health market and encouraging a system where you can practice if you're serving a rural community, you can practice if you're working independently, should be something we all embrace as policymakers working in health.
Dr. Whyte: Absolutely. But we also have to address the issues of ACOs, which can be different for primary care versus specialist, just by virtue of the type of patient you're seeing, the intensity of services, the type of services that you're delivering. So for specialists, how would this model work for them to participate?
Bacher: So one of the things that we're doing is we're creating an aspect of this model called the CMS Administered Risk Arrangements, or CARA. CARA is designed to basically enable the ACO to work more seamlessly with specialists.
So ACO REACH, as the predecessor, had flexibilities in place to contract with specialists as preferred providers. But we didn't see a great take up because the process was too complex. The ACO didn't have the right expertise or experience to be able to enter into those kinds of arrangements with specialists downstream.
And so, we've now created this CARA component of the model which basically allows the ACO. CMS will carry on. A lot of those administrative activities will facilitate the contracting process, will actually administer the arrangement, which is where the name comes from, in order to facilitate and ease the process of an ACO working with specialists. So in some ways, it's nesting episodic specialty models into a longitudinal ACO model.
Sutton: There's a degree of coordination that occurs in the hospital setting. But when we look at the independent practice and the incentive structure that they're able to create with specialists, that's harder. So CARA is a step towards leveling the playing field to the conversation we were just having because what it sets up is a system where we'll administer it on a couple of standardized terms that you, as a physician, negotiate with the specialist you want to work with and give them a way to share in the upside for the episode that they're administering, in effect on behalf of the primary care physician.
What's cool about this is that in addition to the bureaucratic simplification that this gives the ACO, that it gives the physician, this also is giving us data. And that data could be used to inform the design of new episodes in the future. It's hard to get episodes right.
You include a code that you should not. You have the wrong time selected. You have the wrong quality metric. And you see, oh, that's not the result, and then you need to test it again. And we've done that.
Bacher: So one of the things that we've done within the ambit of CARA is we've created an episode that's based on falls prevention. We know that falls prevention is the number one driver for senior-related, hospital-related injuries.
Dr. Whyte: Morbidity and mortality.
Bacher: Right. And once somebody has a fall, then they run into mobility issues, which usually creates a whole spiral of other issues that spiral down and impact the beneficiary's life. So CARA basically is a falls prevention program similar to working with other specialists. What CARA is designed to do is to help curate a new market of organizations that can offer evidence-based falls prevention programs and make it easy for ACOs to engage those programs, which we know is a vital, vital significance to the success of the program.
Dr. Whyte: I mean, this is also the issue of there are short-term gains, but then there's also long-term goals in health. You don't deliver a service and automatically reap the benefits. Sometimes that can come later.
And certainly how physicians are paid, how services are delivered matter. And you talk in this model a bit about financial benchmarking and how you can balance short-term versus long-term goals. Can you help explain that?
Sutton: In financial benchmarking, which is, in essence, what the expected spend is that you hold folks accountable for, it's important to get it right. If you get it wrong and miscalibrate, folks will find opportunities to arbitrage the tax payer, say, oh, I'll take accountability here, but not there.
And that could have massive implications. There's selection bias of who comes in to participate in the accountable care model. There's then losses that accumulate. There's then a need to rethink the approach, and that adds up and make things harder.
So what we need to do is set up a structure where there's the right incentive for folks to come in, whether you have historically costly patients, historically low cost patients, and you can succeed. And we've put a lot of thought into how to set that up, as well as what flexibilities we can give you to enable you and your patients to succeed within that structure.
Dr. Whyte: And the cost is largely associated with their comorbidities in terms of the level of severity of their various illnesses. And what many listeners probably are wondering right now is, how is compensation going to work?
Sutton: What I like about these structures is that we're not micromanaging physician compensation. Instead, what we're doing is taking that benchmark and saying, if you hold down spend lower than the benchmark, you share in the savings you create. And that sets the right incentive structure, so you're rewarded, as patients stay healthier longer, with a share of that savings.
And so what this setup is really about is total cost of care. And there's a global track and a professional track, and there's different things that are accounted for in each.
But what we're empowering physicians to do is take control over their own destiny, stop being tied to a fee schedule that we control in Washington, and instead say, I will manage the panel of patients I care for. I will ensure they get the supports they need. I will take advantage of these flexibility to deliver the interventions that I believe in, that I know will make a difference.
Dr. Whyte: But we're also shifting some risk, so how do we make sure in the modeling that we're addressing risk appropriately? Some people will be risk averse and are concerned.
Sutton: And as part of this, we've set up a structure where you are taking on that risk. That's right. And we allow you to pool together with other physicians in doing so, and we enable you to get clean information to predict how you will perform and manage it.
And so that's the structure we're setting up. That's the deal offer and flexibility for taking on the management and looking out proactively for patients.
Dr. Whyte: Should I take this deal, Gary, that Abe is suggesting will benefit me and patients? How should I assess that as a small group practice or independent practice? What should be my rubric in terms of determining whether I participate?
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Sutton: To your question of should you participate in this model and does it make sense to, frankly, in the approach to date, too many physicians have considered that an answer, no, I should not. And this is designed to change that.
There have been attempts from CMS in the past to approach these things. The real foundation of this is the program that the Trump administration launched in its first term called direct contracting, and we put forward good incentives. We put forward the right structure.
We've now had years to learn from and improve and build on that. And what we were very intentionally doing with the modifications Gary walked through with some of the things around the new tools and flexibilities is thinking through, how do we change the answer that you give us to that question? How do we make it worthwhile for a rural practitioner to come in, for that independent physician to succeed in this structure?
Dr. Whyte: Some of whom are already struggling.
Sutton: Many of whom are struggling today, and they're struggling because of this system that is designed around larger corporations in health care. The corporatization of health care has made it harder to practice medicine—
Dr. Whyte: Absolutely.
Sutton: —and connect with people, with patients as people, and help them improve. And this structure can help change that.
Dr. Whyte: But to push back, to be fair, it's a model. So you're estimating upfront what your payments need to be, and they may be incorrect, to be fair. But you also talk about that you're going to have this process of time where you're open to changing what those are. So how are you going to evaluate this on an ongoing basis?
Sutton: So in the model there will be predictable monthly cash flow payments that you can know in advance of the year. And so even though it is a model, there are structures built in to help make this program work for practices.
Dr. Whyte: That's important.
Sutton: But what we will do is every year be looking at the data coming in and evaluating what is working, what is not working, and looking to improve and build on it.
Bacher: There's really two issues I'd point out. One is the longer-term evaluation of the model of the program. And that's where we establish a comparison group, and we do what's called a difference-in-differences analysis.
With respect to the year-to-year monitoring, we look to see, based on early indicator data, is the model performing the way we expected it to? If it's not, then we step in and figure out, why is it not performing the way we anticipated?
Sutton: And one advantage we have is that we're building on years of history here, and I think we've learned a lot of lessons. We have the advantage of building on what's come before, and we've really put thought into trying to get this right. And there's a great team at the Innovation Center and across CMS that have collaborated in structuring this.
Dr. Whyte: How does it benefit patients? What's the tangible aspects that a patient will see?
Sutton: It's somebody proactively looking out for your care. And it's going to be different for the patients that you serve versus the patients that Doctor Oz serves because you'll make judgments of what your patients need and do the interventions that you think will matter for them.
Maybe you'll have 24/7 access to a trained person on your staff that patients can reach. Maybe he will have a chatbot that you can speak with. Maybe what a different doctor sets up is that they will have something where there's more frequent appointments or longer appointments in structure.
We're not trying to micromanage what shows up differently for patients. We want to make sure that patients are getting the support they need to manage their health and that we're empowering physicians to make that determination of what should look different in practice tomorrow compared to practice today.
Dr. Whyte: What does success look like for this model? Is it improved patient outcomes? Is it decreased spending? Is it both? How do you define success?
Bacher: It's all the above, and it's also a model that can stand the test of time.
Sutton: I agree with that. Unless we could draw in and support people so that more people who are independent are able to succeed, we won't have succeeded. We've seen that independent physician-led practices, as opposed to hospital bed practices, have better results in terms of cost of care management, even, for their patients.
And we were disappointed with the barriers to participation here. And we set out to design a system that works for them. Drawing them in is a key metric for defining success. And then ultimately, we want to be able to certify a model in the future, where they can have this continue in perpetuity as a model and be able to depend on it.
Dr. Whyte: Where can people learn more about the model?
Sutton: So on our web page, we have a web page set up on the CMS website that has all the information on LEAD, how you can apply, how the payments are structured within it, and what we're trying to encourage here. We truly at CMS want to set up a structure where physicians can succeed, where they're free to practice medicine the way that they choose to and where they can engage and support patients.
Dr. Whyte: Well, we wholeheartedly support that aim, so our members definitely will check that out. Thank you both for joining me today.
Sutton: Thank you for the opportunity.
Bacher: Thank you.
Disclaimer: The viewpoints expressed in this video are those of the participants and/or do not necessarily reflect the views and policies of the AMA.
