Objective To test the effectiveness of a telephone care management intervention to increase the use of primary and preventive care, reduce hospital admissions, and reduce emergency department visits for Medicaid beneficiaries with disabilities in a managed care setting. Data Source Four years (2007–2011) of Medicaid claims data on blind and/or disabled beneficiaries, aged 20–64. Study Design Randomized control trial with an intervention group (n = 3,540) that was enrolled in managed care with telephone care management and a control group (n = 1,524) who remained in fee‐for‐service system without care management services. Multi‐disciplinary care coordination teams provided telephone services to the intervention group to address patients' medical and social needs. Data Collection/Extraction Medicaid claims and encounter data for all participants were obtained from the state and the managed care organization. Principal Findings There was no significant difference in use of primary care, specialist visits, hospital admissions, and emergency department between the intervention and the control group. Care managers experienced challenges in keeping members engaged in the intervention and maintaining contact by telephone. Conclusions The lack of success for Medicaid beneficiaries, along with other recent studies, suggests that more intensive and more targeted interventions may be more effective for the high‐needs population.