How an MA Readmission Lands on Your Fee-for-Service Check
On October 1, Medicare Advantage patients enter all six readmission measures and the applicable period drops from three years to two. The dollars the penalty gets applied to stay fee-for-service. We price the asymmetry, take apart the new sepsis measure, and map the rest of the measure stack running the same change.
When CMS built the excess days and mortality measures, Medicare Advantage was 35 percent of the Medicare population. The rule that published this morning puts it at over 50 percent.
The measures never moved. For eleven years the government has been grading hospitals on a cohort that shrank underneath them.
That ends on October 1, and it ends in the program with a penalty attached.
The FY 2027 program year is the first in which all six Hospital Readmissions Reduction Program measures count Medicare Advantage beneficiaries, and the first in which the applicable period runs two years instead of three. Both were finalized a year ago in the FY 2026 IPPS rule at 90 FR 36923. Neither appears in this morning's rule as news, which is roughly why nobody is talking about them eight weeks out.
The applicable period for FY 2027 is already set: admission dates from July 1, 2023 through June 30, 2025. It closed thirteen months ago.
Whatever your MA readmissions did in that window, they are in the ratio now (chart above), and three of the four measurement windows CMS is rebuilding are either closed or already running.
What Actually Flips
Three things change in the six measures at once.
MA admissions enter the cohort. CMS's own testing says this nearly doubles the annual cohort size, and that the combined effect with the shorter window is a roughly one-third increase in overall hospital volume. More low-volume hospitals clear the 25-discharge floor now, on measures they used to sit out.
The window shortens to two years, which CMS justified on the volume it just added. Median reliability went up on almost every measure: AMI to 0.5589 from 0.4458, heart failure to 0.5832 from 0.4914. Total joints was the exception, and CMS blames the ongoing migration of THA and TKA to the outpatient setting.
And the COVID-19 exclusion comes out. Index admissions and readmissions with COVID-19 are back in, the secondary-diagnosis exclusion codes are gone, and the history-of-COVID-19 risk variable is gone with them.
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