BACKGROUND: Arizona Medicaid developed a Health Information Exchange (HIE) system called the Arizona Medical Information Exchange (AMIE). OBJECTIVE: To evaluate physicians' perceptions regarding AMIE's impact on health outcomes and healthcare costs. MEASUREMENTS: A focus-group guide was developed and included five domains: perceived impact of AMIE on (1) quality of care; (2) workflow and efficiency; (3) healthcare costs; (4) system usability; and (5) AMIE data content. Qualitative data were analyzed using analytical coding. RESULTS: A total of 29 clinicians participated in the study. The attendance rate was 66% (N=19) for the first and last month of focus-group meetings and 52% (N=15) for the focus group meetings conducted during the second month. The benefits most frequently mentioned during the focus groups included: (1) identification of "doctor shopping"; (2) averting duplicative testing; and (3) increased efficiency of clinical information gathering. The most frequent disadvantage mentioned was the limited availability of data in the AMIE system. CONCLUSION: Respondents reported that AMIE had the potential to improve care, but they felt that AMIE impact was limited due to the data available.