OBJECTIVES: The Affordable Care Act established the Hospital Readmission Reduction Program (HRRP) and the Bundled Payments for Care Initiative (BPCI), which may reduce Medicare payments to hospitals.  We assessed these programs’ impact on hospital budget, focusing on the potential to reduce penalties via improved short-term percutaneous coronary intervention (PCI) outcomes. METHODS: A budget impact model was developed to quantify the financial penalties associated with HRRP and the difference between fee-for-service and bundled payments under BPCI for a hospital.  HRRP penalties were associated with excess readmissions for patients admitted with acute myocardial infarction (AMI), pneumonia, and heart failure.  The model also computed payment reductions under BPCI for all PCI patients regardless of diagnosis.  An example hospital with high volume catheterization lab (1000 PCIs/year; 50% Medicare) and total Medicare DRG-based payments of $110 million/year was considered.  The hospital was assumed to have excess readmission ratios at the seventy-fifth percentile for each condition.  Based on recent clinical trials of stent platforms, we assumed an absolute 1% reduction in PCI-related readmission due to AMI and revascularization over 30 days following PCI. RESULTS: Total HRRP penalties for the example hospital were calculated to be $669,025, with $199,130 additional reduction in payments under BPCI.  Our model projected that reducing readmission post-PCIs by 1% would reduce excess readmission ratio for patients with AMI from 1.052 to 1.037 and thus HRRP penalties by $80,975. Total cost of care for the 500 Medicare patients receiving PCI was reduced by $43,791 due to reduction of subsequent clinical events, a savings accrued by hospitals under BPCI, resulting in net hospital savings of $124,766.  Achieving these savings with newer stent platforms would result in effective hospital savings of $156/stent.  CONCLUSIONS: A 1% reduction in PCI-related readmissions may substantially reduce penalties under HRRP and BPCI.  Such reductions may be achievable using new stent platforms.