Abstract This study examined the effect of managed care and other reimbursement mechanisms on the outcome of substance abuse treatment at a single treatment facility. A retrospective review of 1594 patient records yielded treatment utilization, diagnostic, and demographic data. Recidivism rates for intensive managed care, traditional managed care, private pay, and state-funded groups of patients were compared. Results showed that, contrary to expectations, recidivism rates were not different for managed vs nonmanaged care patients. In addition, recidivist patients had significantly more ICD-9 diagnoses than nonrecidivist patients. A discussion of future research suggests that other outcome measures need to be examined in addition to recidivism rate, such as psychosocial functioning following treatment and indicator(s) of severity of illness, to better determine the effect of managed care and other reimbursement mechanisms on treatment outcome.