Objective To assess rural–urban differences in quality of postdischarge care among Medicare beneficiaries, controlling for selection bias of postdischarge services. Data Sources The Medicare Current Beneficiary Survey (MCBS), Cost and Use Files from 2000 to 2010, the Area Resource File, Provider of Services File, and the Dartmouth Atlas of Health Care. Study Design Retrospective analysis of 30‐ and 60‐day hospital readmission, emergency department (ED) use, and mortality using two‐stage residual inclusion; receipt of 14‐day follow‐up care was the main independent variable. Data Extraction Method We defined index admission from the MCBS as any admission without a previous admission within 60 days. Principal Findings Noninstrumental variables estimation was the preferred estimation strategy. Fourteen‐day follow‐up care reduced the risk of readmission, ED use, and mortality. There were no rural– urban differences in the effect of 14‐day follow‐up care on readmission and mortality. Rural beneficiaries experienced a greater effect of 14‐day follow‐up care on reducing 30‐day ED use compared to urban beneficiaries. Conclusions Follow‐up care reduces 30‐ and 60‐day readmission, ED use, and mortality. Rural and urban Medicare beneficiaries experience similar beneficial effects of follow‐up care on the outcomes. Policies that improve follow‐up care in rural settings may be beneficial.