OBJECTIVE: State governments are exploring the potential of various forms of case management to control the costs of substance abuse treatment programs. This report describes an experimental program in one Iowa county in which clients are assessed and referred elsewhere if treatment is needed. Outcomes of clients in that county are compared with those of clients served elsewhere in the state. METHODS: All claims submitted by provider agencies to the Iowa Department of Public Health for substance abuse treatment of eligible clients in 1994 were analyzed to test the effect of the experimental intake-and-referral program on clients' utilization of outpatient treatment, rate of treatment completion, and rate of abstention at discharge from treatment. RESULTS: In the county with the experimental program, 27 percent of clients recommended for treatment actually attended, compared with 48 percent in other counties. Clients who used the experimental program were also less likely to complete treatment. These differences persisted after adjusting for baseline differences in client characteristics. CONCLUSIONS: Lower utilization arising from failure to attend recommended treatment may reduce treatment costs but is not the intended outcome of the intake-and-referral program. Failure to complete treatment also is an adverse outcome. Outcomes of various types of case management programs should be carefully evaluated before statewide implementation is considered.