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The ill elderly are more at risk for recurrent hospitalizations than any other segment of the population. What is known about hospital admission/readmission of chronically ill older adults and how can this information be used to develop cost-effective strategies? The authors found variation in percent reimbursement (43% to 93%) of overall/average charges, which indicates that further examination of low reimbursement major diagnostic categories can be useful. Hospital readmission data should be used to improve quality of care while containing hospital costs.