OBJECTIVE: To determine the prevalence of organ-threatening and mental health co-morbidities and examine their effects on total medical costs in systemic lupus erythematosus (SLE) patients. METHODS: A total of 2395 California Medicaid patients with a diagnosis of SLE were included in this retrospective analysis. Diagnosis of mental co-morbidities (depression, anxiety, and fatigue) was based on ICD-9 codes from the claims record as was the presence of organ involvement (heart, lung, kidney, liver, and serious blood involvement). The analyses were conducted from an insurer's perspective; payments were used as a proxy measure for costs. Total medical costs included inpatient costs, ambulatory and outpatient costs, prescription costs, and nursing facility/intermediate care facility costs. Descriptive analysis was performed to determine the prevalence of these co-morbidities. The effect of mental and organ-threatening co-morbidities on total medical costs of SLE patients was modeled using a mixed regression estimation controlling for age, gender, ethnicity, and eligibility in both Medicaid and Medicare. RESULTS: The incidence rates for depression, anxiety and fatigue were 14.7%, 8.2%, and 15.8%, respectively. About 37% of the patients have at least one affected organ. Pulmonary manifestation was the most common organ involvement, occurring in 20.4% of the SLE patients. About 11% of the patients had kidney involvement while 18% had heart involvement. Higher incidence rates of fatigue was observed in patients with organ-threatening SLE (21.6% vs. 12.5%, p<0.01). Organ-involvement results in an average increase of $1144/per month in total medical costs (p<0.01). Among the three mental co-morbidities, fatigue is significantly associated with increased total costs of $536 (p<0.0001). The ethnicity influence on total medical costs dissipates with the inclusion of organ-threatening co-morbidities and fatigue. CONCLUSIONS: Both mental health and organ involvement co-morbidities are significant predictors of medical costs of treating SLE.