To describe the results of a program developed to manage institutional postacute care (IPAC) (postacute skilled nursing, inpatient rehabilitation facility, and long-term acute care) in a CMS Bundled Payments for Care Improvement (BPCI) project for coronary artery bypass graft (CABG) surgery. We compared pre- and postutilization patterns during a 3-year period by evaluating risk-adjusted national, state, and other BPCI participant comparisons using a difference-in-differences (DID) analysis in a large urban community tertiary center with a CABG surgery program. Included in the analysis were all Medicare patients receiving CABG surgery at the institution (n = 504), across the nation (n = 213,423), and at other BPCI institutions (n = 4939). The intervention included (1) use of a standardized tool for evaluation and prognostication of patient placement, (2) programmatic changes to manage patient functional recovery, and (3) patient and family engagement in postacute placement and functional recoveryplan. Physical therapist/occupational therapist time with patients who had undergone CABG surgery increased by more than 179% between the pre- and postintervention periods. This was associated with a 41.2% and 51.6% decline in IPAC use at the institution on an observed basis and adjusted basis, respectively. DID comparison demonstrated a 14.40% (95% CI, -19.30% to -9.60%) greater reduction at the target hospital than at other participating BPCI hospitals. A strong association exists between a focused patient functional recovery program and IPAC use reduction after CABG surgery. Using a structured approach to clinical analytics and hypothesis testing of redesign efforts when managing postacute care populations removes waste from care delivery.