PROJECT ABSTRACT Bundled payments provide a fixed reimbursement for services related to the treatment of a condition or procedure through a defined “episode-of-care”. Based on cost savings reported from demonstration projects, Medicare recently initiated the Comprehensive Care for Joint Replacement Model (CJR), a mandatory bundled payment for hip and knee joint replacement in 67 randomly selected population centers. While advocates suggest that CJR could slow the rate of medical spending and improve the quality of patient care, its value has “not been definitively shown in rigorously tested and validated studies”. If CJR has value (decreased costs with similar quality, or improved quality with reasonable costs), Medicare could expand it nationwide, fundamentally shifting the financial risk of patient care on to hospitals. Reimbursement policies are the primary structural element of health care that influences patient outcomes for joint replacement. However, little empirical information is available about the full impact of bundled payment programs. Specifically, we do not know how they will (a) affect patient-reported pain and functioning;; (b) influence the volume of procedures and post-discharge services;; (c) stimulate hospitals’ response to improve value;; (d) generalize to a national program;; and (e) trigger potential unintended consequences. We propose to answer these critical questions for hip and knee joint replacement by pursuing three aims: 1) To determine whether CJR reduces episode-of-care costs, improves patient safety, and increases procedure volume;; 2) To compare patient-reported pain and functional outcomes (pre- versus post-surgery change) based on hospital participation in a bundled payment program;; and 3) To identify the implementation strategies (i.e., improved clinical pathways, post-operative care coordination, implant standardization, patient risk management) that most effectively improve value under bundled payment programs. We will uniquely link Medicare claims with patient reported outcomes from the AHRQ-funded Function and Outcome Research for Comparative Effectiveness in Total Joint Replacement registry and a Patient-Centered Outcomes Research Institute (PCORI)-funded large pragmatic clinical trial, Comparative Effectiveness of Pulmonary Embolism Prevention after Hip and Knee Replacement. Leveraging the random selection of CJR participant and non-participant hospitals will help clarify the full spectrum of policy effects due to the program. We will also build on the survey expertise within Dartmouth’s AHRQ-sponsored Center of Excellence in high performing health care systems to identify the most effective implementation strategies adopted by hospitals to improve value under bundled payments. The findings from this proposed evaluation will be of critical interest to patients, policy makers, public and private payers, and hospitals concerned with improving health car...