Objectives.This study investigated racial differences in procedure use among elderly Medicare beneficiaries. It is hypothesized that providers do not discriminate inappropriately in treating black and white patients and that the apparent differences in black-white treatment could be attributed to other differences between the two populations.Methods.Rates of use for selected procedures were examined among two patient groups: (1) the universe of Medicare beneficiaries in 10 states and the District of Columbia and (2) a subset of this sample created by matching beneficiaries on the basis of zip code of residence to neutralize the effects of black-white differences in provider access and regional practice patterns. Because all Medicare beneficiaries have a common core of standard benefits, the importance of financial access differences in accounting for black/white utilization differences is diminished.Results.Three major findings were indicated from this study: (1) area-controlled comparisons find even larger black-white disparities than those shown from uncontrolled comparisons, (2) the disparities are larger in southern states, and (3) the disparities vary substantially with procedure cost.Conclusions.Although no clinical data were analyzed, providers appeared to be giving less intensive treatment to otherwise similar black Medicare beneficiaries.