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OBJECTIVE -- The purpose of this study was to evaluate the effect of telephonic care management within a diabetes disease management program on adherence to treatment with hypoglycemic agents, ACE inhibitors (ACEIs), angiotensin receptor blockers (ARBs), statins, and recommended laboratory tests in a Medicaid population. RESEARCH DESIGN AND METHODS -- A total of 2,598 patients with diabetes enrolled for at least 2 years in Florida: A Healthy State (FAHS), a large Medicaid disease management program, who received individualized telephonic care management were selected if they were eligible for at least 12 months before and 12 months after beginning care management. Patients were matched one-to-one on all baseline characteristics to 2,598 control patients. The impact of care management on utilization and adherence rates for diabetes-related medications and tests was analyzed with the difference-in-difference estimator. RESULTS -- Changes in utilization were evaluated separately for those who were characterized as adherent to treatment at baseline ("users") and those who were not ("nonusers"). Both groups achieved significant improvement in adherence between baseline and follow-up. Nonusers increased their overall hypoglycemic use by 0.7 script (P < 0.001), by 0.7 script for ACEIs and statins (both P < 0.001), by 0.8 test for A1C (P < 0.001), and by 0.7 test for lipids (P < 0.001). Users increased hypoglycemic use by 1.5 scripts (P < 0.001) and insulin use by 0.9 script (P < 0.001). CONCLUSIONS -- The FAHS telephonic care management intervention effectively induced Medicaid patients with diabetes to begin treatment and improved adherence to oral hypoglycemic agents and recommended tests. It also substantially improved adherence among baseline insulin users. [ABSTRACT FROM AUTHOR]