In an increasingly cost-conscious health care environment, average length of hospital stay has decreased. Although psychiatric inpatient treatment is largely exempt from the constraints of the Medicare diagnosis related groups (DRG's), length of stay for geropsychiatric hospital services has decreased also. A trend toward higher rates of early readmission and a greater probability of a more restrictive setting has been observed. Community mental health centers have apparently been overwhelmed by the needs of earlier discharged elderly persons. An intermediary program to carry the patient from hospital discharge to ongoing aftercare through a firm establishment of an outpatient therapeutic relationship at a psychiatric aftercare facility was undertaken utilizing nurse therapy. The goal of this intervention was to aid the former psychiatric inpatient in his transition to an outpatient psychiatric system. It was not intended to replace outpatient therapy, but to formalize a link between the helping networks. A preliminary evaluation has shown that the nursing intensive care model may have been a factor in the return to previous rates of recidivism and disposition. Although data demonstrating the impact of nursing interim care apart from other factors is needed, this nurse therapy model does provide continuity of care from hospital ward therapy through the clinic. (ABL)