This study compared outcomes for rural Medicaid clients with severe mental illness in fee for service versus managed care programs. Interviews were conducted with 305 Medicaid clients in rural Oregon (166 in fee for service and 139 in managed care). Logistic and multivariate regression analyses were used to examine client satisfaction, safety, symptoms, functioning, and family satisfaction in the fee for service versus managed care groups. There was no evidence that conversion of the Medicaid mental health system from fee for service to managed care led to changes in outcomes for rural clients with severe mental illness.