An asthma disease management program designed specifically for low-income patients experiencing significant adverse events can improve health outcomes substantially, while lowering costs. The Virginia Health Outcomes Partnership aimed to help physicians in a fee-for-service primary care case management program manage asthma in Medicaid recipients. Approximately one-third of physicians treating asthma in an area designated as the intervention community volunteered to participate in training on disease management and communication skills. This large-scale study discovered that the rate of emergency visit claims for patients of participating physicians who received feedback reports dropped an average of 41% from the same quarter a year earlier, compared to only 18% for comparison community physicians. Although only a third of the intervention community physicians participated in the training, emergency visit rates for all intervention community physicians nonetheless declined by 6% relative to the comparison community among moderate-to-severe asthma patients when data for participating and nonparticipating physicians were combined. At the same time, the dispensing of some reliever drugs recommended for asthma increased 25% relative to the comparison community. A cost-effectiveness analysis projected direct savings to Medicaid of $3 to $4 for every incremental dollar spent providing disease management support to physicians. The results of this study demonstrate the potential this program offers, especially for Medicaid programs in other states that want to improve the care of their primary care case management networks and, at the same time, manage costs.