Purpose This paper investigates patient outcomes including length of stay (LOS), cost of hospitalization, bounce‐back rates, transition to hospice care, and mortality, following back‐transfer. Methods This study was an observational case‐control study of adults hospitalized in Iowa between 2005 and 2013 to identify back‐transferred patients. Back‐transfer was defined as the transfer of rural patients near the end of their acute hospitalization in a comprehensive medical center back to a local community hospital for the completion of their medical care. Demographic, geographic, rurality, procedural, and disease information was compared between case and control groups, then propensity score (PS) matching was performed to create comparable groups to perform analyses. Findings Over the 9‐year period, 1,056,773 patients meeting inclusion criteria were admitted, of which 430 (0.04%) were back‐transferred. After PS matching, LOS was 60% (95% CI: 0.50‐0.71) higher and costs were 42% (95% CI: 0.33‐0.50) higher in the back‐transferred group. Back‐transferred cases had 8.34 (95% CI: 3.66‐19.0) times the odds of hospice transition and 2.17 (95% CI: 1.37‐3.46) the odds of mortality compared to controls. Four percent of back‐transfers “failed” with the patient being returned to the larger hospital before discharge. Conclusions Back‐transfer is a rare occurrence, and it is associated with longer LOS, higher hospitalization cost, higher mortality, more hospice transfers, and occasional bounce‐backs to comprehensive medical centers. Future work should focus more on prospective indications for transfer, the role of end‐of‐life care, financial impact, and identifying patient populations for whom back‐transfer is safest.