More hospitals to face high readmission penalties in fiscal 2026
Readmission prevention continues to be a valuable offering by EMS-Based MIH programs. This recent news may spur even more interest, especially considering the likelihood of additional financial pressures on hospitals in the near future.
We will provide an update once the CMS data is officially published. CMS offers a site where you can view/compare hospital readmission percentages (as well as other quality metrics) at their ‘Care Compare’ site here.
Upon accessing the site, find the hospital that interests you, click on ‘Unplanned Hospital Visits’ to see the hospital’s readmission rate.
More hospitals to face high readmission penalties in fiscal 2026
By Diane Eastabrook
September 22, 2025
https://www.modernhealthcare.com/providers/mh-cms-hospital-readmission-penalties-2026/
The number of hospitals faced with readmissions penalties of at least 1% come Oct. 1 is set to rise to the highest number since fiscal 2022.
Prior to fiscal 2026, the number of hospitals facing readmissions penalties of 1% or more had dropped for five consecutive years. But preliminary data released Friday by the Centers for Medicare and Medicaid Services showed the number of hospitals set to pay penalties of 1% or more under the Hospital Readmissions Reduction Program will increase to 8.1%, or 240 hospitals, in fiscal 2026 compared to 7%, or 208 hospitals, in fiscal 2025.
However, the number of hospitals facing no readmissions penalties next fiscal year, which starts Oct. 1, remained relatively flat compared to fiscal 2025, rising to 21.8%, or 641, from 21.4%, or 638.
For the upcoming year, 70.1% of hospitals will be charged penalties of less than 1%, compared to 71.6% in fiscal 2025.
The average fiscal 2026 readmission penalty for hospitals with the highest proportion of Medicare-Medicaid dual-eligible patients is 0.33%. For hospitals with the lowest number of dual-eligible patients, the average penalty is 0.35%.
During fiscal 2025, those two groups had penalties of 0.31% and 0.32% respectively.
CMS will release the final data Oct. 1.
The Hospital Readmissions Reduction Program is a Medicare value-based purchasing program that began over a decade ago to encourage hospitals to better communicate and coordinate care with patients and caregivers to avoid hospital readmissions. Penalties reduce fee-for-service Medicare payments CMS makes to hospitals.
The hospital readmissions performance period for fiscal 2026 pulls in claims from July 2021 through June 2024. The report is based on a rolling three-year time period. The most recent period included data generated during the tail-end of the COVID-19 pandemic.
Akin Demehin, senior director for quality and patient safety policy at the American Hospital Association, said the increase in the number of hospitals receiving higher penalties could be partly attributed to CMS reinstating data on pneumonia patients, which it excluded from the previous period because the illness overlapped with COVID-19. “That could potentially be part of the explanation of why there was some change. I think what we are seeing is some of the normal year to year fluctuations,” he said.
However, he also warned hospitals could soon start seeing rising penalties as CMS begins looking at Medicare Advantage enrollees, as well as those in traditional Medicare, when considering hospitals’ performance in fiscal 2027, Demehin said.
Demehin estimates between 75% and 82% of hospitals will see some penalties in fiscal 2027, with an average penalty of .44%.
The inclusion of Medicare Advantage patients in future performance calculations is a concern for hospitals, because prior authorizations used by private insurers can result in delayed or denied post-acute care, Demehin said.
“We know that timely access to post-acute care can be a key determinant in how patient recovers and, therefore, the likelihood of readmission,” he said. “We do worry about how that will show up in readmissions for hospitals so we are going to be watching that very closely.”
