Every ACO that has tried to manage total cost of care without meaningful specialist engagement has hit the same wall. Primary care manages the relationship. Specialists manage the cost. The ACO is accountable for both, but only has direct influence over one. Prior CMS models acknowledged this problem. None of them solved it. LEAD introduces a formal mechanism to change that: CARA.
Why Specialist Integration Has Failed in Prior Models
Total cost of care accountability in ACOs is primary care-centric by design. Attributed beneficiaries are aligned through primary care providers, and the ACO's governance, incentive structures, and care management programs are built around that relationship.
High-cost episodes (cardiac surgery, orthopedic procedures, oncology care, CKD management) are driven by specialists and post-acute settings that the ACO has no formal risk-sharing relationship with. The ACO carries the financial accountability. The specialist does not.
Prior attempts at specialist integration faced two persistent barriers. First, administrative complexity: bilateral contracting between ACOs and specialist groups requires legal infrastructure, actuarial modeling, and ongoing reconciliation that most organizations don't have the bandwidth to maintain across multiple specialty relationships. Second, payment infrastructure: without CMS as an intermediary, ACOs and specialists had to design and administer their own settlement processes, which added friction that often killed the arrangement before it produced results.
The result was a patchwork of informal preferred provider agreements with limited financial accountability on the specialist side, and ACO performance data showing that specialist-driven cost was one of the least-controlled variables in total cost of care.
What is CARA?
CMS-Administered Risk Arrangements (CARA) is a voluntary digital data-sharing and payment infrastructure available to Global Risk Option ACOs under LEAD. It enables episode-based risk arrangements (EBRAs) between ACOs and their specialists, called Preferred Providers, with CMS handling the payment reconciliation.
This removes the primary barrier to specialist engagement: the administrative complexity of bilateral contract management. The ACO and specialist negotiate the terms. CMS administers the financial settlement. Neither party needs to build separate reconciliation infrastructure.
CARA is available to Global Risk Option participants only. It is not available to Professional track ACOs.
The phase-in begins in 2028 for most episode types. The falls prevention episode, described below, is available from model launch.
How an Episode-Based Risk Arrangement Works
The mechanics of a CARA arrangement:
The ACO and a specialist group (an orthopedic surgery practice, a nephrology group, a cardiology program) agrees on a target price for a defined clinical episode. CMS' Episode-Based Cost Measure (EBCM) methodology provides standard definitions for acute medical, procedural, and chronic condition episodes, so the definitional work is largely done.
CMS provides episode-level performance data to both the ACO and the Preferred Provider throughout the performance year. At LEAD settlement, CMS reconciles episode performance and administers payments based on the negotiated EBRA terms.
If the specialist's episode costs fall below the target price, they earn a share of savings. If costs exceed the target, they share in the loss.
The specialist takes on real financial accountability for episode cost outcomes. The ACO manages the overall attributed population performance. Both have aligned incentives toward the same goal, with CMS as the payment intermediary. This is what prior models lacked.
Episode Types Available Under CARA
Acute medical episodes. Aligned with EBCM methodology and standard definitions.
Procedural episodes. Orthopedic surgeries, cardiac procedures. Standard EBCM definitions expected to be available as CARA phases in beginning in 2028.
Chronic condition episodes. CKD, ESRD, heart failure, diabetes. Phase-in beginning 2028. For ACOs managing significant populations with these conditions, particularly those also participating in LEAD's High Needs concurrent risk adjustment, the alignment between chronic condition CARA episodes and High Needs benchmark management is direct. For organizations that need specialist-integrated managed programs for heart failure and CKD ahead of CARA activation, Story Health by Innovaccer provides co-managed specialty care that operates within the ACO's financial structure from day one.
Falls prevention episode. This is CARA's most distinctive design choice, and it's available from model launch. It covers time-limited home-based interventions for functional safety, typically involving occupational therapists, physical therapists, registered nurses, and handypersons when needed. It's designed specifically for frail, high-risk seniors. The falls prevention episode is the clearest example of CMS building CARA for a population type (high-needs, complex, community-based) that ACOs have historically managed without any formal specialist integration mechanism.
CARA and TEAM: Understanding the Overlap
CMS' Transforming Episode Accountability Model (TEAM) creates mandatory episode accountability for specific hospital-based surgical procedures. LEAD and CARA are the ACO-based complement: voluntary rather than mandatory, and focused on the full episode including post-acute and chronic condition management, not just the surgical event.
In markets where hospitals participate in TEAM and ACOs operate under LEAD, some specialists will face overlapping accountability signals from both models. A cardiac surgeon operating under TEAM episode accountability whose ACO also has a CARA arrangement covering cardiac procedures needs those incentive structures pointing in the same direction. If TEAM and CARA targets diverge, the specialist faces conflicting financial signals that neither model intended.
Managing this overlap is an emerging coordination challenge. ACO leaders should begin mapping it now, before CARA episodes activate in 2028. The organizations that identify these conflicts early, and negotiate EBRA terms with TEAM overlap in mind, will avoid the friction that uncoordinated incentives create.
What ACOs Should Be Building Now
CARA doesn't activate most episodes until 2028, but the preparation work is 2026's problem.
Identify your high-cost specialist relationships. Cardiology, orthopedics, nephrology, oncology: quantify the episode-level cost contribution these groups drive in your attributed population. The episode types CARA will cover are knowable now. The financial case for approaching specific specialist groups can be built from current claims data.
Begin preferred provider conversations. CARA requires an established ACO-specialist relationship. A cold arrangement in 2028 is structurally weaker than one built over 18 months of data sharing and relationship development. Specialists who have been seeing their own episode performance data for a year before CARA goes live are more likely to engage on terms that reflect real cost dynamics.
Build the episode-level data infrastructure. Specialists who can see their own performance (episode costs, readmission rates, post-acute utilization attributable to their procedures) are more likely to engage in CARA arrangements. Organizations that can deliver that transparency to their specialist partners before the formal CARA framework activates will have a significant relationship advantage.
Map TEAM participation. Identify which hospital partners are participating in TEAM and which surgical episodes overlap with your CARA target list. Design EBRA terms with that overlap in mind from the beginning.
The data infrastructure CARA requires doesn't assemble itself in 2028. Episode-level cost visibility across attributed populations, actuarial pricing for EBRA target-setting, and in-year tracking of episode performance against negotiated terms are capabilities that need to be operational before the first episode activates. Humbi Actuarial Intelligence supports CARA episode pricing and EBRA stress-testing. Innovaccer's population health infrastructure provides the episode-level claims visibility that preferred provider conversations and ongoing CARA monitoring depend on.
What CARA Signals About Where CMS Is Heading
CARA is the clearest signal yet that CMS understands the structural limitation of primary-care-only ACO accountability. The administrative barriers CMS is removing through CARA (bilateral contracting complexity, payment reconciliation infrastructure) are real and were genuine deterrents to specialist engagement in prior models.
Whether CARA achieves meaningful specialist integration across a 10-year model is an open question. The cultural and relationship barriers don't disappear because the administrative ones are addressed. Specialists whose identity and practice is organized around fee-for-service episode economics don't shift to risk-sharing arrangements because CMS created the infrastructure for it. The shift requires relationship, data sharing, and a period of demonstrated mutual benefit.
What's different about LEAD is that CMS is providing the infrastructure and a 10-year timeline to build on it. The organizations that use both, to establish genuine preferred provider relationships, share episode performance data before CARA activates, and negotiate EBRA terms grounded in real cost dynamics, will have a competitive position that compounds as the model matures.
The preparation for CARA is the same preparation that the rest of LEAD requires: unified data, actuarial modeling, and clinical workflows that respond to signals before costs land in settlement. Organizations that build this infrastructure for LEAD performance broadly will find that CARA readiness follows naturally. Those that treat it as a separate initiative will be assembling it under pressure in 2027.
If you're preparing your organization for LEAD and want to see how Innovaccer supports ACOs across benchmark modeling, care gap closure, HCC capture, and CARA readiness, connect with our value-based care team.
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