Background and aims: To evaluate the effect of interdisciplinary outpatient geriatrics on the use, cost, and quality of health services in a fee-for-service (FFS) environment of two networks of primary care clinics operated by a not-for-profit provider organization in Dallas County, Texas. Methods: The Senior Health Network (SHN) provides interdisciplinary primary care to patients aged 55 years or older; the Health Texas Provider Network (HTPN) provides "usual" primary care to patients of all ages. We conducted a two-year retrospective cohort study of 13,098 fee-for-service Medicare beneficiaries who had 2+ visits to one of the networks in 2000. In the SHN, interdisciplinary teams supplemented primary care with social services, specialized clinics, and health education. We compared the use, cost and quality of health services, as reflected by paid Medicare claims, provided to eligible patients in the SHN vs the HTPN. Results: Medicare payments for hospital, skilled nursing facility, and home health care services were lower for SHN patients than HTPN patients (-32.7%, -19.8%, and -23.8%, respectively, p <= 0.05). SHN patients had a lower likelihood of admission to hospitals for treatment of five "ambulatory care sensitive conditions" (aOR 0.69, 95% CI 0.580.81), and they were less likely to receive several preventive services. Total Medicare payments for the two cohorts did not differ significantly. Conclusions: Interdisciplinary outpatient geriatric care in a FFS setting has the potential to avert hospital admissions for ambulatory care sensitive conditions and to reduce Medicare payments for hospital, skilled nursing facility, and home health care services.