Objective: To determine how changes in eligibility criteria for early discharge affected quality and costs of home nursing follow-up care for Medicaid patients. Methods: A nurse screened women delivering vaginally to determine eligibility for discharge at 24-47 h. Maternal criteria were a vaginal delivery, no serious medical problems, ≥ 8 h after bilateral tubal ligation and, if 24 h postpartum, by 21.00 on day of discharge. Newborn criteria were 36 weeks' gestation or more, 2000 g or greater and a normal examination at 24 h of age. By 48 h after discharge, a nursing visit was ordered for each mother and newborn. Nursing consultations were tracked and later entered into a database linked to hospital financial data. Results: Of 3133 vaginal deliveries occurring from 1 August 1997 to 31 January 1999, eligibility criteria allowed 1799 mothers (58%) and 1587 newborns (51%) to be discharged early. Medical problems were rarely detected at follow-up (1% mothers, 2% newborns). To perform the increased number of visits, more personnel were hired and home nursing costs rose 150%. Despite the increased staff and costs, 19 mothers (1%) and ten newborns (0.6%) were lost to follow-up and 25 mothers (1%) and 20 newborns (1%) were visited beyond 72 h after discharge. Conclusions: Liberal changes in maternal and newborn eligibility criteria did not adversely affect the quality of home nursing follow-up care following early discharge. For hospitals performing a large number of early discharges, follow-up care using only a home nursing visit may be too expensive and difficult to organize. Alternative follow-up plans, such as clinic visits or phone calls, may also need to be utilized.