OBJECTIVES: Patients undergoing major surgeries often experience post-surgical complications. The impact of post-surgical complications on hospital costs has been extensively studied but the impact on margins remains a subject of controversy. We assessed the financial consequences of postsurgical complications in high-risk US Medicare patients undergoing specific procedures. METHODS: Data from Medicare patients with ≥1 comorbidity who had major cardiac, vascular, gastro-intestinal and orthopedic surgical procedures in 2011 were identified in the CMS database. Post-surgical complications and financial information (in 2011 US$) were extracted from Medicare Standard Analytic Files and Hospital Cost Reports. Hospital margin was calculated as Medicare payments minus hospital costs. A total of 63 procedure codes (ICD-9-CM) were analyzed. RESULTS: Of 303,432 Medicare patients undergoing major surgery, mean costs were significantly higher for patients with at least one complication than for patients without any complication in each procedure category. For example, the mean cost per cardiac procedure patient with complication was $46,535, but only $32,887 per cardiac patient without complication. For each of the four procedure categories, average hospital margins were approximately $1,500-$2,500 higher for patients without than with complications: $1,508 for cardiac patients, $2,336 for gastro-intestinal, $1,694 for orthopedic, and $2,515 for vascular patients (all p<0.0001). Weighted average margin were the Medicare cases with complication to be converted into cases without complication would be $1,870 higher per case.  For some procedure subgroups, the difference in average margin between cases with and without complications was even higher, such as in pancreatectomy ($3,907 per case), aorto-iliac & peripheral bypass ($3,614), resection of rectum ($2,602), and partial hepatectomy  procedures ($2,303) (all p<0.0001). CONCLUSIONS: Postsurgical complications have a significant impact on hospital margins. Enhanced Recovery Programs have potential not only to improve quality of care but also to improve hospital margins.