OBJECTIVES: The study objective was to use administrative claims to create episodes of acute respiratory care as a means of better understanding the economic burden of acute treatment of COPD. METHODS: Respiratory-related medical (ICD-9-CM 480.xx - 519.xx) and pharmacy claims were extracted from a managed care database for all patients 30 years of age or more who were diagnosed with COPD (ICD-9-CM 491.xx, 492.xx, and 496.xx) between 1997 and 2001. Acute respiratory-related services were categorized as inpatient treatment, emergency room (ER) treatment, or an office visit combined with an antibiotic or oral steroid dispensed within three days of the visit. Episodes of care were created by continuously combining acute medical claims until a gap of 14 days or longer were found between claims. Acute services after such a gap began a new episode. Each patient was tracked longitudinally and all episodes during the study period were included. Study measures included service location, duration, and health plan payments (in 2002 $US). RESULTS: The average age of the 164,566 patients was 68 years, and 50% were male. Patients received more than 510,000 unique acute respiratory medical services; 37% were inpatient, 22% ER, and 41% office visits. These services were combined to create 385,352 episodes (1.3 unique medical services per episode), of which 45% involved inpatient care. The average duration of episodes involving hospitalization was 10.6 days, with a mean payment of $12,661. These episodes lasted 2.6 days longer and payments were 12% more than individual hospital stays. Approximately 10-15% of outpatient episodes involved multiple ER or office visits. Mean payments for office visit and ER episodes, including acute drug costs, were $231 and $841, respectively. CONCLUSIONS: Combining individual claims for acute respiratory services into episodes of care provide a more comprehensive estimate of the costs of respiratory exacerbations for patients with COPD.