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OBJECTIVE. This study explored the relationship between participation in a home/community-based long-term care case management intervention (known as the Channeling demonstration), use of formal in-home care, and subsequent nursing home utilization. STUDY DESIGN. Structural analysis of the randomized Channeling intervention was conducted to decompose the total effects of Channeling on nursing home use into direct and indirect effects. DATA COLLECTION METHOD. Secondary data analysis of the National Long-Term Care Data Set. PRINCIPAL FINDINGS. The use of formal in-home care, which was increased by the Channeling intervention, was positively associated with nursing home utilization at 12 months. However, the negative direct effect of Channeling on nursing home use was of sufficient magnitude to offset this positive indirect effect, so that a small but significant negative total effect of Channeling on subsequent nursing home utilization was found. CONCLUSIONS. This study shows why Channeling did not have a large total impact on nursing home utilization. The analysis did not provide evidence of direct substitution of in-home care for nursing home care because the direct reductions in nursing home utilization due to other aspects of Channeling (including, but not limited to case management) were substantially offset by the indirect increases in nursing home utilization associated with additional home care use.