Early discharge of newborns has led to an increase in the rate of readmission for hyperbilirubinemia. We reviewed our experience from 7/93 to 7/95.Monthly, there were an average of 510 deliveries and 8 readmissions with jaundice (1.6%) following early discharge. Five of the most severely affected required intensive care. Three patients required exchange transfusion (.024%). The first baby presented on day 4 of life with a total serum bilirubin (TSB) of 33.7 mg/dl. A red cell eluate revealed Anti-A. The second infant presented with a TSB of 34.1 mg/dl on day 5 of life and no identifiable cause. The third patient had a TSB of 41.9 mg/dl on day 7 of life, required 3 exchange transfusions, had signs of kernicterus and a presumptive diagnosis of Lucey-Driscoll Syndrome. Early discharge has increased hospital readmissions for jaundice and placed some infants at risk for bilirubin encephalopathy. If early hosital discharge is to continue, new techniques are needed which can identify those infants with increased bilirubin production in order to prevent the reemergence of severe hyperebilirubinemia and its' sequelae as a threat to the health of neonates. Insurers must share in the responsibility of developing medical systems to prevent the consequences of early discharge.