The delivery of antibiotics within four hours of hospital arrival for patients who are admitted with pneumonia, as mandated by the Joint Commission for the Accreditation of Healthcare Organizations and the Centers for Medicare and Medicaid Services, has gained considerable attention recently because of the plan to implement pay-for-performance for adherence to this standard. Although early antibiotic administration has been associated with improved survival for patients with pneumonia in two large retrospective studies, the effect on actual patient care and outcomes for patients with pneumonia and other emergency department patients of providing financial incentives and disincentives to hospitals for performance on this measure currently is unknown. This article provides an in-depth case-based description of the evidence behind antibiotic timing in pneumonia, discusses potential program effects, and analyzes how the practical implementation of pay-for-performance for pneumonia conforms to American Medical Association guidelines on pay-for-performance.