Abstract Introduction The Bundled Payment for Care Improvement (BPCI) Initiative is a Centers for Medicare and Medicaid services (CMS) program designed to promote coordinated and efficient care. This study seeks to report costs of readmissions within a 90-day episode of care for BPCI Initiative patients receiving total knee or hip arthroplasty (TKA or THA). Methods From January 2013 through December 2013 one urban, tertiary, academic orthopaedic hospital admitted 664 patients undergoing either primary TKA or THA through the BPCI Initiative. All patients readmitted to our hospital or an outside hospital (OSH) within 90-days from the index episode were identified. The diagnosis and cost for each readmission was analyzed. Results Eighty readmissions in 69 patients (11%) were identified within 90-days. There were 53 readmissions (45 patients) following THA, and 27 readmissions (24 patients) following TKA. Surgical complications accounted for 54% of THA readmissions and 44% TKA readmissions. These complications had an average cost of $36,038 (range $6,375-$60,137) for THA and $38,953 (range $4,790-$104,794) for TKA. Eliminating the TKA outlier of greater than $100,000 yields an average cost of $27,979. Medical complications of THA and TKA had an average cost of $22,775 (range $5,678-$82,940) for THA and $24,183 (range $3,306-$186,069) for TKA. Eliminating the TKA outlier of greater than $100,000 yields an average cost of $11,682. Conclusion Hospital readmissions following THA and TKA are common and costly. Identifying the causes for readmission and assessing the cost will guide quality improvement efforts.