The Centers for Medicare and Medicaid Services policy on nonpayment for certain hospital-acquired conditions serves as a strong incentive to prevent adverse events during hospitalization. This observational study examined Medicare's nonpayment policy for conditions such as health care–associated infections. As with prior studies, investigators determined that the incidence of hospital-acquired conditions declined following implementation of nonpayment. For certain conditions, such as catheter-associated urinary tract infections, hospitals with a larger proportion of Medicare patients had greater improvements. The authors note the variation in rates of hospital-acquired conditions and differing magnitude of improvement. They recommend further study to understand how to achieve similar successes in reducing hospital-acquired conditions.