After ACO REACH: What the 2026 Sunset Means for Your Network

When does ACO REACH actually end?

ACO REACH began on January 1, 2023, and runs for four performance years, PY2023 through PY2026, concluding at the end of 2026. According to CMS, 74 ACOs are participating in PY2026, serving people with traditional Medicare across all 50 states, the District of Columbia, and Puerto Rico. Starting in PY2026, CMS implemented an adjusted financial methodology and other operational changes intended to improve the model's sustainability for its final year, based on findings from the model evaluation.

The important word is final. Unlike the Medicare Shared Savings Program, which is a permanent part of Medicare, ACO REACH is a time-limited Innovation Center test, and CMS has confirmed it will not extend the model in its current form beyond 2026. That means every REACH ACO faces a genuine decision point, not a renewal formality. Continuity of your risk arrangement, your beneficiary alignment, and in many cases your capitation-style cash flow all depend on choosing and executing a successor path in time.

For risk-bearing organizations, the practical takeaway is that 2026 is a planning year as much as a performance year. The application and enrollment windows for the successor options open during 2026 for a 2027 start, so the work of evaluating paths, modeling benchmarks, and preparing contracts has to happen alongside running the final REACH year. If your organization is still assessing its readiness to carry two-sided risk at all, our primer on IPA risk readiness is the right place to start before you pick a lane.

What is the LEAD Model that replaces it?

In December 2025, the CMS Innovation Center announced the Long-term Enhanced ACO Design Model, known as LEAD, as the designated successor to ACO REACH. LEAD is a voluntary, nationwide accountable care model that will run from January 1, 2027, through December 31, 2036 — ten performance years, the longest ACO model the Innovation Center has ever tested. The long horizon is the point: CMS is offering a predictable window without repeated rebasing, aimed at a sustainable long-term benchmark and savings pathway.

LEAD builds on REACH but is engineered to attract a broader mix of providers, including those new to accountable care and smaller, independent, or rural-based practices, and it emphasizes coordinated care for high-need populations such as dually eligible beneficiaries and those who are homebound. It also introduces optional episode-based risk arrangements between ACOs and specialists — referred to as CMS-Administered Risk Arrangements — supported by episode-level data, standardized contracting templates, and CMS-administered payments tied to episode performance. CMS invited ACOs to apply through a Request for Applications, with applications expected during 2026 for the 2027 start.

For a REACH ACO that wants to keep taking meaningful risk in traditional Medicare, LEAD is the most direct continuation. But it is a new model with its own benchmark methodology and its own timeline, and the details continue to develop through the RFA and technical guidance. The prudent move is to read the CMS materials directly and model your specific population against the new benchmarking, rather than assuming LEAD will simply mirror your REACH economics. It may be better for some organizations and worse for others.

Option 1: Should you transition to MSSP?

The Medicare Shared Savings Program is the permanent, no-sunset home for Medicare accountable care, and for many REACH ACOs it is the most logical destination. MSSP offers a BASIC track glide path and an ENHANCED track that carries the most two-sided risk and reward; a REACH ACO accustomed to global risk will find ENHANCED the closest structural analog, though not an identical one. The move buys stability — MSSP is not going away — at the cost of some of the design features that made REACH distinctive.

The differences matter for your economics and your operations. REACH offered capitation-style prospective payment and a particular benchmarking and risk approach; MSSP uses its own benchmark methodology, its own beneficiary assignment rules, and shared-savings-and-losses mechanics that can narrow the upside relative to REACH's global risk. Modeling your book under MSSP rules, rather than assuming a clean translation, is essential. Our overview of value-based network requirements walks through how these program mechanics shape the network you must build and maintain.

The strategic advantage of MSSP is durability and optionality: you can enter, gain experience, and move up the risk ladder on a known, permanent track without betting on a time-limited model. For organizations that value certainty over maximum upside — or that are not confident they will be selected for or comfortable with LEAD — MSSP is the dependable floor beneath the whole decision.

What is ACO PC Flex, and does it fit?

ACO PC Flex is a five-year Innovation Center test running from 2025 through 2029 inside the Medicare Shared Savings Program, designed to strengthen primary care within an MSSP ACO. CMS set out to select up to 130 MSSP ACOs, with a particular focus on smaller, low-revenue ACOs made up of independent physicians — exactly the profile that often struggles to fund the infrastructure that accountable care demands. It is not a separate program you leave MSSP to join; it is a payment overlay for MSSP participants.

The model changes the cash flow of primary care in two ways. Participating ACOs receive a one-time Advanced Shared Savings Payment of 250,000 dollars to cover the costs of forming and administering the ACO, and they receive monthly prospective, population-based Prospective Primary Care Payments in place of certain fee-for-service billing. CMS requires that at least 90 percent of those payment dollars — rising to 95 percent in later years — be spent on advanced primary care services, keeping the money anchored to the front line of care.

For a REACH ACO whose value proposition rests on strong primary care and prospective payment, ACO PC Flex within MSSP can preserve some of the prospective, population-based feel that REACH provided, while sitting on the permanent MSSP foundation. It will not fit every organization — the small, low-revenue targeting and the primary-care spend requirements are real constraints — but for the right profile it is one of the more natural bridges out of REACH.

Option 2: Should you move toward Medicare Advantage contracting?

Not every risk-bearing organization has to stay in traditional Medicare at all. Medicare Advantage offers a different route to global risk — through percent-of-premium, capitation, and delegated arrangements with MA plans — and for provider organizations that have built the muscle to manage total cost of care, MA contracting can be a natural next step or a complement to a Medicare ACO. The tradeoff is that you are now negotiating with plans and operating inside their networks and rules rather than contracting directly with CMS.

The mechanics are meaningfully different, and so is the network you need. MA success depends on your position within a plan's provider network, your ability to manage referrals and specialist spend, and your contract terms with the plan — a very different exercise from CMS beneficiary alignment. If you are new to this world, start with our guides to the first-year MA network and the differences between Medicaid and Medicare Advantage networks, because the contracting posture and adequacy obligations do not carry over cleanly from a REACH ACO.

For many organizations the answer is not either-or. A provider group can run an MSSP or LEAD ACO for its traditional Medicare population and pursue MA contracting for its Medicare Advantage members in parallel, building one integrated care model that serves both. The point is to make that a deliberate portfolio decision rather than a default — and to size the network and contracting work each path demands before you commit.

How does your network and provider strategy change?

Whichever path you choose, the sunset forces a real change in provider strategy, and this is where a network leader earns their keep. Under REACH, your network and alignment logic followed REACH's rules; under MSSP, LEAD, or MA, the alignment mechanics, the benchmark, and the incentives all shift, and your provider contracts have to shift with them. The first task is a contract inventory: identify every REACH-specific term — risk-sharing arrangements, downstream provider agreements, incentive structures — that will not survive the transition intact.

Specialist strategy is the sharpest example. LEAD's optional episode-based CMS-Administered Risk Arrangements create a new, structured way to bring specialists into accountable care through episodes, which is different from how REACH or MSSP typically engage specialists. If you pursue LEAD, your specialist network design and contracting should anticipate those episode arrangements; if you pursue MA, specialist steerage and referral management inside the plan's network become the lever instead. Either way, expect a wave of contract amendments — our guides to provider contract anatomy and contract amendment management map the work.

Finally, the primary care core has to be re-secured. Prospective payment models like ACO PC Flex and the population-based logic of LEAD reward a tight, engaged primary care base, while MA rewards network position and total-cost management. Re-confirming your primary care panel, their alignment, and their appetite for the risk model you choose is foundational — a network that was optimized for REACH is not automatically optimized for what replaces it.

What should you do in 2026?

The transition is manageable if you run it as a defined decision process on the 2026 calendar rather than a last-minute scramble. The steps below turn the options above into a sequence you can execute while still running your final REACH performance year, so that continuity of risk, alignment, and cash flow is preserved into 2027.

• Make the model decision early. In the first quarter of 2026, choose your primary path — LEAD, MSSP, MSSP with ACO PC Flex, MA contracting, or a deliberate combination — based on modeled economics, not habit.
• Model your population under each benchmark. Do not assume REACH economics translate; run your book against MSSP and LEAD benchmark methodologies and, where relevant, MA percent-of-premium math.
• Track the application windows. LEAD and MSSP application and enrollment windows open during 2026 for a 2027 start; miss them and you forfeit a year of continuity.
• Inventory and amend contracts. Identify REACH-specific provider terms that will not carry over and plan the amendment wave for downstream and specialist agreements.
• Re-secure the primary care core. Confirm panel alignment and provider appetite for the risk model you choose before you commit to it.
• Design specialist engagement to fit the model. Plan for LEAD's episode-based CMS-Administered Risk Arrangements or MA referral steerage, depending on your path.
• Sequence market and network moves. Coordinate any new-market or MA-contracting work with the transition so you are not building two networks at cross purposes.

How does KSM help?

The ACO REACH sunset is a strategy problem with a network problem underneath it. The organizations that come through it strongest are the ones that pick the right successor path with clear eyes and then rebuild their provider network and contracts to match — on the 2026 calendar, without dropping the ball on the final REACH year. That combination of model strategy and hands-on network execution is what KSM does.

We help risk-bearing provider organizations model the options, choose a path, and stand up the network, contracts, and provider strategy the new model requires — whether that is LEAD, MSSP with or without ACO PC Flex, MA contracting, or a portfolio of them. Explore our services or talk to our team about a transition plan for your organization. You carry the risk and the relationships; we bring the plan and the build to carry them cleanly past 2026.