Objective: To develop a claims-based Markov model for Crohn's disease (CD) based on the American College of Gastroenterology (ACG) criteria. Methods: A Markov model was developed using disease states as defined by ACG CD practice guidelines. The study sample consisted of unique individuals ³18 years old from the Medstat Marketscan databases (Medicare and Commercial) with ³3 years of continuous enrollment from 2000-2005, and with an ICD-9 diagnosis code of 555.xx. Patients were classified as severe-fulminant, moderate-severe, mild-moderate, or remission based on the ACG criteria. Patient exposure was divided into six month intervals, starting on first day of exposure. For each interval, disease state was defined according to the most severe disease activity. Transition probabilities between disease states were calculated based on movement from one six month period to the next. Costs of disease states were calculated using mean per member per month (PMPM) medical claim costs, and the model was run separately for males and females due to differences in life expectancy, assuming 30 years old at start. Quality-adjusted life year (QALY) estimates were obtained from the literature. Results: There were 23,419 unique individuals, with 198,497 eligible 6-month intervals. The distribution of disease states were: remission (99,584; 50.2%), mild-moderate (24,788; 12.5%), moderate-severe (56,686; 28.6%), severe-fulminant (17,439; 8.8%). Model results for both males and females showed that, as disease severity increased, cost per QALY also increased. Cost per QALY for mild-moderate disease in males was $4,310 whereas for severe-fulminant disease, it was $68,538. Results were similar for females ($4,311 vs. $68,643). Conclusion: Results of this model indicate that cost of CD increases as disease severity increases. In addition, although less time is spent in the severe disease state, the cost per QALY was high, suggesting that therapies that can keep patients in other disease states may prove to be beneficial.