To better understand the relationship between a hospital's Total Performance Score (TPS) and unplanned readmissions, a multivariate linear regression analysis was used to examine the relationship between hospital TPS and readmission rates for acute myocardial infarction (AMI), heart failure (HF), and pneumonia (PN). Hospital TPS was significantly and inversely related to AMI, HF, and PN readmission rates. The higher the hospital TPS, the lower the readmission rates for patients with AMI, HF, and PN. Hospitals with higher Medicare and Medicaid patients had higher readmission rates for all three conditions. The TPS methodology will likely evolve to include additional measures or dimensions to assess hospital quality and payment. Policymakers and hospital administrators should consider other structure elements and process measures to assess and improve patient safety and quality.