OBJECTIVES: State Medicaid programs are scrutinizing atypical antipsychotic prescribing given relatively high costs and use with other psychotropic medications. This study assessed healthcare costs associated with antipsychotic polypharmacy in five state Medicaid programs over six years. METHODS: A retrospective cohort study using Medicaid claims data from California, Oregon, Tennessee, Utah, and Wyoming evaluated 64,411 patients who filled an antipsychotic prescription (1998-2003) and who were eligible 180 days prior to 365 days after the index claim. Analysis was stratified by antipsychotic regimen: polypharmacy (multiple antipsychotic initiation or concomitant antipsychotic therapy, 60 day overlap); concomitant psychotropics (30 day overlap, no polypharmacy), polypharmacy + psychotropics; or monotherapy (no polypharmacy or psychotropics). ICD-9 codes (290.xx-319.xx) were used to identify mental health diagnoses and related hospitalizations. Total health care and drug costs were calculated for 365 days after the index antipsychotic claim. Groups were compared using chi-square and ANOVA tests. RESULTS: A total of 53.1% receiving antipsychotics began and stayed on monotherapy; 39.8% received concomitant psychotropics only; 3.2% polypharmacy only; and 3.9% polypharmacy + psychotropics. Polypharmacy rates varied by year (p<0.001), declining between 1998 and 2000, then increasing through 2002. Patients receiving polypharmacy were more likely to be male (p<0.001), have diagnosed schizophrenia (p<0.001) and a mental health-related hospitalization (p<0.001). Median total healthcare costs varied by therapy regimen (Mono, $3156; Psycho, $5131; Poly, $6396; Poly+Psycho, $9342; p<0.001). Median total drug costs varied by therapy regimen (Mono, $1575, Psycho, $3169; Poly, $3838; Poly+Psycho, $5833; p<0.001). The weighted contribution of total health care costs by regimen was: Mono, 49%; Psycho, 41%; Poly, 4%; Poly+Psycho, 6%. CONCLUSION: Polypharmacy rates were low during the study period, were higher in patients with more severe mental illness, and represented a small yet significant component of health care costs. Future research will investigate predictors of polypharmacy and health care costs.