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To understand the impact of the Hospital Readmission Reduction Program on both future targeted and nontargeted surgical procedures.The Hospital Readmission Reduction Program, established under the Affordable Care Act in March of 2010, placed financial penalties on hospitals with higher than expected rates of readmission beginning in 2012 for targeted medical conditions. Multiple studies have suggested a “spill-over” effect into other conditions, but the extent of that effect for specific surgical procedures is unknown.A retrospective review 5,122,240 Medicare beneficiaries who underwent future targeted procedures (total hip replacement, total knee replacements) or nontargeted procedures (colectomy, lung resection, abdominal aortic aneurysm repair, coronary artery bypass graft, aortic valve replacement, mitral valve repair) using an interrupted time series model to assess the rates of readmission before the Hospital Readmission Reduction Program was announced (2008–2010), whereas the program was being implemented (2010–2012) and after penalties were initiated (2012–2014). We also explored if the change in readmission rates were correlated with changes in index length of stay, use of observation status, or discharge to a skilled nursing facility.From 2008 to 2014 rates of readmission declined for both target conditions (6.8%–4.8%; slope change −0.07 to −0.10, P < 0.001) and nontarget conditions (17.1%–13.4%; slope change −0.04 to −0.11, P < 0.001). The rate of reduction was most prominent after announcement of the program between 2010 and 2012 for both targeted and nontargeted conditions. During the same time period, mean hospital length of stay decreased; nontargeted conditions (10.4–8.4 days) and targeted conditions (3.6–2.8 days). There was no correlation between hospital reduction in readmissions and use of observation-only admissions (Pearson correlation coefficient = 0.01) or discharge to a skilled nursing facility (Pearson correlation coefficient = 0.05).Trends in readmissions after inpatient surgery are consistent with hospitals responding to financial incentives announced in the Hospital Readmission Reduction Program. There appears to be both an anticipatory effect (future targeted procedures reducing readmission before payments implemented) and a spillover effect (nontargeted procedures also reducing readmissions).