CMS is penalizing 2,334 hospitals, about 80% of those evaluated, under the Hospital Readmissions Reduction Program in fiscal 2027, according to new CMS data. The penalties took effect on Oct. 1.
Here are six things to know:
- On Oct. 1, 244 hospitals (8.4%) began facing penalties of 1% or more under the Hospital Readmissions Reduction Program, up from 240 hospitals (8.1%) in fiscal 2026.
- Ten hospitals will face the maximum 3% penalty, with 34 facing penalties of 2% or more.
- The share of hospitals receiving no penalty will drop to 19.8% (578 hospitals) from 21.8% (641) in 2026. The bulk of hospitals, 71.8% in fiscal 2027 compared with 70.1% in 2026, will see penalties below 1%.
- Fiscal 2027 is the first time CMS calculated hospitals’ performance using both Medicare Advantage and fee-for-service data. Penalties continue to apply only to traditional Medicare payments.
- Hospitals with the highest proportion of patients dually eligible for Medicare and Medicaid will see an average penalty of 0.33%, the same compared to fiscal 2026. Hospitals with the lowest proportion will see an average penalty of 0.32%, down from 0.35%.
- The performance period includes discharges from July 1, 2023, to June 30, 2025. CMS reduced the period from three years to two starting in fiscal 2027.
The Hospital Readmissions Reduction Program was developed under the ACA to reduce avoidable hospital readmissions by applying payment reductions to hospitals that have higher-than-expected rates for specific conditions and procedures.
