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OBJECTIVE Integrating primary care services into specialty mental health clinics has been proposed as a method for improving health care utilization for medical conditions by adults with serious mental illness. This paper examines the impact of a mental health based primary care program on emergency department (ED) visits and hospitalizations. METHOD The program was implemented in seven New York City outpatient mental health clinics in two waves. Medicaid claims were used to identify patients treated in intervention clinics and a control group of patients treated in otherwise similar clinics in New York City. Impacts of the program were estimated using propensity score adjusted difference-in-differences models on a longitudinally followed cohort. RESULTS Hospital stays for medical conditions increased significantly in intervention clinics relative to control clinics in both waves (ORs = 1.21 (Wave 1) and 1.33 (Wave 2)). ED visits for behavioral health conditions decreased significantly relative to controls in Wave 1 (OR = 0.89), but not in Wave 2. No other significant differences in utilization trends between the intervention and control clinics were found. CONCLUSION Introducing primary care services into mental health clinics may increase utilization of inpatient services, perhaps due to newly identified unmet medical need in this population.