This article describes the Community Nursing Organization, a federal health care model designed to provide specific ambulatory and outpatient services to medicare beneficiaries via a nurse managed delivery system under capitated financing. A primary nurse provider, working with the elderly client, family, physician, health care service providers, and community organizations, assesses the need for care and arranges for appropriate services. This nurse must also authorize payment of those services covered by the Community Nursing Organization (CNO). A 3-year demonstration project is currently under way. Findings at 1 year indicate that the system may have a positive effect on client health status.