Hospitals in Leeds are being penalised because of the high number of patients who have to be readmitted.
Compared to national figures, the city's hospitals have a higher than average proportion of emergency readmissions of patients after they have been sent home.
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In the 12 months up until July 2010, nearly 4,000 had to go back into hospital after just two days.
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Across the country, the number of people being readmitted to hospital within 28 days of being discharged is increasing.
However rates at Leeds hospitals are higher than at similar hospital trusts.
Between August last year and this July, 12,931 patients were readmitted within 14 days, a rate of 5.7 per cent compared to 3.9 per cent at similar hospitals.
It's also an increase on the previous year when the rate was 5.5 per cent.
Directors at Leeds Teaching Hospitals NHS Trust were told they faced penalties within their contract with NHS bodies which pay for healthcare because of the high number of emergency readmissions.
Finance director Neil Chapman said in a report: "Work is going on to unpick this, including the effect of inappropriate recording of patients whose return to hospital is planned."
Hospital bosses say the figures do not take into account whether patients were readmitted because of something totally unrelated to the original stay, whether it was planned and people with chronic conditions who often need hospital care.
Work is now underway to look into the reasons for the readmissions.
Earlier this year the coalition Government announced that hospitals were to become responsible for patients for 30 days after they are discharged, meaning they could not be paid twice for looking after someone who had been readmitted.
In Leeds, the hospitals trust is facing financial penalties for the number of readmissions.
Even though they have admitted more patients, so bringing in more money, income for unplanned treatments has not increased as much as expected due to the penalties for patients being readmitted to hospital.
Restrictions on filling vacancies and using bank and agency nurses are still in place as the hospitals trust struggles to balance the books.
A programme of saving cash is being devised but until that starts, controls on spending on staff will meet the shortfall.
It is estimated that the savings programme will save 60m annually from next year.
During the 12 months from next April, Leeds hospitals will need to find 44m savings as the national spending cuts bite.
Mr Chapman said they were still on track to break even at the end of this year.
"The measures put in place to improve the financial position in the second half of the financial year will allow the trust to hit its income and expenditure target for the year," he said.