As part of the Centers for Medicare & Medicaid Services' plan to implement Outcome-Based Quality Improvement (OBQI) in home health settings nationwide, a pilot project was initiated in 5 states. This article analyzes the results of the Michigan Peer Review Organization's (MPRO's) pilot project in terms of changes in patient outcomes that occurred in participating home health agencies between 2000 and 2001. Participating agencies had statistically significant improvements when comparing their performance in 2001 versus their performance in 2000. They did not achieve significant improvement though in comparison to the national reference group. Agencies should implement the OBQI process in its entirety annually until the desired outcome is achieved.