Efforts to measure quality of care have focused on ambulatory care providers. We examined the performance of community health centers serving children on Medicaid in 3 states. Descriptive analysis showed considerable patient population heterogeneity, and regression analysis demonstrated that variation explained by the assigned provider was small (mean R(2) = 4.3%) compared with the variation explained by patient demographic variables (mean R(2) = 29.9%). The results reinforce the need for caution when one is attributing quality differences to provider performance.