Recurrent hospitalizations represent a substantial and often preventable human and financial burden in the United States. In 2008 North Carolina initiated a statewide population-based transitional care initiative to prevent recurrent hospitalizations among high-risk Medicaid recipients with complex chronic medical conditions. In a study of patients hospitalized during 2010-11, we found that those who received transitional care were 20 percent less likely to experience a readmission during the subsequent year, compared to clinically similar patients who received usual care. Benefits of the intervention were greatest among patients with the highest readmission risk. One readmission was averted for every six patients who received transitional care services and one for every three of the highest-risk patients. This study suggests that locally embedded, targeted care coordination interventions can effectively reduce hospitalizations for high-risk populations.