Readmission is a large problem after both medical and surgical admissions. Recent policy changes that include substantial financial penalties have made readmission an important, if not the most important, pay-for-performance program for health care in the United States. The CMS Hospital Readmissions Reduction Program currently applies only to patients with certain medical diagnoses, but it is expanding into orthopedic surgery in 2014, and will likely involve more surgical procedures in the future. Accordingly, hospitals and researchers will increasingly be focused on understanding and preventing readmission. Definitions of readmission must be standardized between organizations to allow for comparison. The accepted definition for any organization tracking rehospitalization should be 30-day all-cause readmission. In addition, any hospital profiling applications or studies comparing readmission rates between hospitals should use hierarchical rather than standard logistic regression modeling. Rather than relying on findings from medical patients, further studies on the specific causes of readmission after surgery should be conducted. Predictive modeling has some utility in focusing readmission prevention efforts on high-risk patients, but understanding the underlying causes of readmission is key to designing effective prevention interventions. Current evidence suggests that postoperative complications play a key role in surgical readmission, but efforts on improving discharge planning and coordination of care developed in medical patients will also be critical in decreasing unnecessary readmissions in the future.