Case management has been widely used with the intent of improving clinical outcomes while reducing medical costs. Studies of case management, however, have shown variable effectiveness. This study assessed the impact of a state health department case management program on hospitalizations, emergency department (ED) visits, and preventive services among persons with diabetes receiving Medicaid fee-for-service health care. The patients enrolled in the non-disease-specific case management program were low-income, chronically ill and medically complex. Nurse case managers authorized and coordinated services in the home for these patients and established links to health-care professionals and community resources. A retrospective, non-randomized, controlled time series design using paid claims files was employed. Case management reduced admissions and hospital days but did not significantly impact ED visits or use of preventive services.