The Hospital Readmissions Reduction Program (HRRP) has penalized hospitals with higher 30-day readmission rates more than $3 billion to date. Clinicians and policy experts have raised concerns that the 30-day readmission measure used in this program provides an incomplete picture of performance because it does not capture all hospital encounters that may occur after discharge. In contrast, the excess days in acute care (EDAC) measure, which currently is not used in the HRRP, captures the full spectrum of hospital encounters (emergency department, observation stay, inpatient readmission) and their associated lengths of stay within 30 days of discharge. This study of 3173 hospitals that participated in the HRRP in fiscal year 2019 compared performance on the readmission and EDAC measures and evaluated whether using the EDAC measure would change hospitals' penalty status for 3 conditions targeted by the HRRP. Overall, only moderate agreement was found on hospital performance rankings by using the readmission and EDAC measures (weighted κ statistic: heart failure, 0.45 [95% CI, 0.42 to 0.47]; acute myocardial infarction [AMI], 0.37 [CI, 0.35 to 0.40]; and pneumonia, 0.50 [CI, 0.47 to 0.52]). Under the HRRP, the penalty status of 769 (27.0%) of 2845 hospitals for heart failure, 581 (28.3%) of 2055 for AMI, and 724 (24.9%) of 2911 for pneumonia would change if the EDAC measure were used instead of the readmission measure to evaluate performance. Fewer small and rural hospitals would receive penalties. The Centers for Medicare & Medicaid Services should consider using the EDAC measure, which provides a more comprehensive picture of postdischarge hospital use, rather than the 30-day readmission measure to evaluate health care system performance under federal quality, reporting, and value-based programs.