OBJECTIVES: There is accumulating evidence of sub-therapeutic dosing of second-generation antipsychotics (SGAs), leading to suboptimal control of disease and higher overall treatment costs.  Additional evidence is needed to better understand the clinical and economic outcomes of patients who receive clinically effective doses of SGAs. The objectives of this study were to distinguish patients receiving clinically recommended doses of SGAs and compare their medical care costs.  METHODS: Patients with schizophrenia (N=12,133) on an oral SGA (aripiprazole, olanzapine, quetiapine, risperidone or ziprasidone) were identified in Medicaid claims databases (2001-2008) from 8 states.  Patients were followed for 18 months (6 month pre-index period during which patients did not receive an SGA, followed by a 12-month post-index utilization period to determine total costs). For patients on recommended dosing, costs were compared using a generalized linear model with a gamma distribution and log-link function, adjusting for baseline covariates (age, gender, race, pre-index costs, Charlson co-morbidity score, and specific psychiatric co-morbidities) with ziprasidone as the reference group. RESULTS: Of the 12,133 patients meeting study criteria 7,213 (59%) were taking clinically recommended doses by day 61 of their follow-up period. Patients on quetiapine had the lowest percentage at 37% (N=1,057/2,869). Other results were aripiprazole 66%(N=996/1515), olanzapine 65% (N=1831/2828), risperidone 73% (N=2807/3821), and ziprasidone, 47% (N = 522/1,100). When comparing groups of patients with recommended dosing, mental health-related costs (p=0.006) and all-cause costs (p=0.0005) were statistically higher for the quetiapine group compared to the ziprasidone group.  CONCLUSIONS: Less than two-thirds of the Medicaid patients with schizophrenia who were started on an SGA were taking clinically recommended doses 2 months after their initial start.  For patients using clinically recommended doses, those taking quetiapine had higher mental health-related costs and higher all-cause costs compared to patients taking ziprasidone.