Adding a financial incentive for nursing homes to treat certain conditions onsite could reduce hospital readmissions, according to results of the second phase of a major study.

The investigation is part of the second phase of the Indiana University Center for Aging Research’s ongoing OPTIMISTIC innovation model, which embeds clinicians in the nursing home to help manage chronic conditions. In the first phase, without that incentive, they were able drop readmissions by 33%.

Now, the researchers want to see if adding a financial sweetener at 40 Indiana nursing homes will help further move the needle, Indiana University announced Monday. Under the current Centers for Medicare & Medicaid payment system, facilities do not receive any additional dollars for providing care to residents who become sicker, unless they send them to the hospital and then readmit them.

“Phase Two of OPTIMISTIC removes financial barriers to keeping people in nursing homes where they can be treated safely in place,” said the Regenstrief Institute’s Laura Holtz, senior research manager of the project, in a press release. She said that more than three times as many nursing homes as could be accommodated applied to be part of OPTIMISTIC’s second phase.

Nursing homes taking part will be reimbursed for onsite treatment of the six conditions most commonly linked to unnecessary rehospitalizations for nursing home residents: pneumonia, urinary tract infections, congestive heart failure, dehydration, skin ulcers and chronic obstructive pulmonary disease.

OPTIMISTIC (Optimizing Patient Transfers, Impacting Medical Quality and Improving Symptoms: Transforming Institutional Care) was first implemented in 2012 and will receive more than $30 million in CMS funding through the Initiative to Reduce Avoidable Rehospitalizations Among Nursing Facility Residents by 2020.