Under Washington State's 1915(b) Medicaid waiver authority, mental health clubhouse (MHC) services were offered from 2005 until 2012 to individuals with mental illness and/or co-occurring mental health and substance use disorders. Legislative interest in expanding MHC services prompted this evaluation, which compares Medicaid MHC clients—served between January 2009 and June 2012—to a matched comparison group who received some other form of mental health treatment (“treatment as usual”) during the same time period. Clubhouse services were expected to reduce outpatient emergency department utilization, inpatient hospitalizations, arrests, homelessness, and use of crisis/stabilization services while increasing employment rates and engagement in ongoing behavioral health treatment services. This study found that, relative to treatment as usual, MHC service receipt was associated with improvements in arrest rates and increased SUD treatment utilization but worsening rates of crisis mental health service utilization and homelessness. MHC services, as provided in Washington State during the study period, did not systematically outperform treatment as usual on other key behavioral health and quality of life measures for Medicaid-only clients.