BACKGROUND: Most health insurance plans monitor ambulatory care quality using the Healthcare Effectiveness Data and Information Set (HEDIS), publicly reporting results at the plan level. Plan-level comparisons obscure the influence of patients served or settings where care is delivered. Mental illness, substance abuse, and other physical comorbidities, particularly prevalent among Medicaid beneficiaries, can impact adherence to recommended care. We analyzed individual-level HEDIS measures for diabetes and asthma from 5 Medicaid managed care plans to understand how these factors contribute to quality. METHODS: We used claims and medical records to study HEDIS measures for persistent asthma (n = 9103) and diabetes (n = 1790) among beneficiaries enrolled in Massachusetts' Medicaid program during 2004 and 2005. Logistic regression models included patient-level demographic and health factors, provider type, region, and managed care plan. RESULTS: Alcohol and drug use disorders and emergency department use were associated with lower quality care for most measures. Glycemic control was better for patients with diabetes and severe mental illness. Patients with higher illness burden and with more frequent ambulatory visits received higher quality care for both conditions. Younger adults received recommended care less often than older adults. Quality varied across plans. CONCLUSIONS: Additional efforts to improve quality of care for asthma and diabetes for Medicaid beneficiaries are needed for individuals with substance use disorders and young adults. Although evidence of higher quality for patients with multiple conditions is encouraging, improving quality for comparatively healthier individuals might also produce significant long-term benefits.