Increasing demands for episodic bundled payments in total hip and knee arthroplasty are motivating providers to wring out inefficiencies and coordinate services. This study describes a care pathway and gainshare arrangement as the mechanism by which improvements in efficiency were realized under a bundled payment pilot. Analysis of cut-to-close time, LOS, discharge destination, implant cost, and total allowed claims between pre-pilot and pilot cohorts showed an 18% reduction in average LOS (70.8 to 58.2 hours) and a shift from home health and skilled nursing facility discharge to home self-care (54.1% to 63.7%). No significant differences were observed for cut-to-close time and implant cost. Improvements resulted in a 6% reduction in the average total allowed claims per case.