The Centers for Medicare and Medicaid Services (CMS) published a draft notice on April 12 announcing the opportunity for hospitals and community-based organizations to participate in the Medicare Community-Based Care Transitions Program created by section 3026 of the Affordable Care Act (ACA). This program offers $500 million in competitive grants over five years for organizations adopting evidence-based strategies to help manage Medicare beneficiaries’ transitions from acute care hospitals to community-based settings so as to improve quality of care, prevent unnecessary readmissions, achieve better treatment outcomes, and control costs. The Medicare Payment Advisory Commission (MedPAC) estimates that Medicare spends as much as $12 billion annually on hospital readmissions that could have been prevented by better communication between inpatient and outpatient care teams, better post-discharge follow-up, and other proven methods that are crucial for patients with complex, potentially life-threatening medical conditions. The problem is not limited to the Medicare program. The California Public Employees Retirement System (CalPERS) has already achieved a 17 percent reduction in hospital readmissions (see below) using an innovative, integrated care model, and state Medicaid agencies as well as private payers are confronting this critical problem also. Organizations eligible to compete for funding under the new CMS program include community-based organizations and acute care hospitals partnering to attack the root causes of unnecessary readmissions to hospitals. Strong candidates for CMS funding include applicants that are Administration on Aging grantees (e.g., an Aging and Disabilities Resource Center or an Area Agency on Aging) working with multiple hospitals; primary care and other organizations serving small communities, rural areas, and medically underserved populations; and other organizations demonstrating prior success managing care transitions and preventing readmissions to hospitals. Community-based organizations will obtain payments per Medicare discharge for beneficiaries at high risk for readmission, such as individuals with heart disease and other chronic conditions, depression, and/or cognitive impairments. Applications for CMS funding will be accepted on a rolling basis and successful applicants will obtain approvals on an on-going basis until the $500 million in ACA funds are exhausted. Official publication of the funding opportunity in the Federal Register is expected on April 15.  CMS will be accepting applications immediately. This opportunity is part of CMS’ unfolding “Partnership for Patients”, a $1 billion ACA program that seeks to save lives and control costs through better care management, patient safety, medication management, and other evidence-based strategies supported by research of the Institute of Medicine and other distinguished clinical organizations.