The purpose of this study was to assess the effect of posthospital physician follow-up on readmissions in older adults. Physician follow-up visits after discharge have been promoted as a way to improve outcomes and reduce readmissions, but the evidence base for this recommendation is limited. A retrospective analysis of data from the Medicare Current Beneficiary Survey (MCBS) was conducted for 2001 to 2003. Data were extracted on elderly Medicare beneficiaries with an index hospitalization in 2002, and physician follow-up visits and readmissions within 90 days of discharge were identified. Analysis was conducted with multivariable logistic regression modeling to assess the independent effect on 90-day readmission of any physician follow-up, timing of physician follow-up, and follow-up with only primary care physicians. A generalized linear model was used to assess the effect of physician follow-up on total health expenditures. The analytical sample included 326 beneficiaries; 79% had a physician follow-up visit within 90 days, and 28% were readmitted within 90 days. In multivariable modeling, physician follow-up was negatively associated with 90-day readmissions (odds ratio=0.23, 95% confidence interval=0.13–0.43). Follow-up visits were protective against readmissions regardless of timing of visit and when restricted to those by primary care physicians. Having a follow-up visit was associated with approximately $10,000 lower annual health expenditures. In conclusion, physician follow-up protects against readmission after adjusting for important covariates and is associated with significantly lower expenditures. Future efforts should ensure that patients have adequate physician follow-up.