Unplanned readmissions generated a $4416 median contribution margin. The initial hospitalizations (when the TJA was performed) were financially unfavorable for patients subsequently readmitted relative to those not readmitted due to increased costs of care (P = .002), but these costs were more than outweighed by the increased reimbursement earned during the readmission (P < .001), ultimately making readmitted patients financially preferable (P < .001). Going forward, penalties will be levied for risk-adjusted readmission rates above the national rate of 4.8%. For the institution under review, the penalty per readmission outweighs the financial gains earned through readmission by $12,184, resulting in a net loss from readmissions if the rate exceeds 6.5%. It will be financially optimal to maintain a readmission rate (after risk adjustment) equal to the national average but exceeding that rate will be $7768 more expensive per readmission than undershooting that target.