OBJECTIVE: To explore whether payment mechanisms for the treatment of conditions often reimbursed outside of the health-care industry could benefit by incorporation of severity or case-mix adjustments. METHODS: Data were culled from a fully integrated medical and pharmacy claims database, and were obtained on acute treatment episodes for all skin and soft tissue injuries, major/minor trauma, and fractures over a two-year period (N=4.8 million). Episodes were stratified by type; selected comorbidities (arthritis, diabetes, osteoporosis) and complications (device/graft failure, post-operative infection or hemorrhage) thought to potentially affect recovery and hence total utilization and costs were identified. Measures of interest were estimated at an episode level, and included total episode duration (in days), number of services provided, and total billed charges. Measures were analyzed using techniques of multiple linear regression; in addition to markers for complications and comorbidities, independent variables included age, gender, and geographic region. RESULTS: While absolute measures of episode duration, utilization, and charges increased with age for patients with comorbidity or complication diagnoses, the independent effects of these conditions decreased in older age groups; in particular, effect sizes in patients aged =65 years were minimal. Among individual conditions for patients aged <65 years, arthritis and osteoporosis were generally found to significantly increase episode duration but not utilization or costs. In contrast, the impact of diabetes on adjusted mean episode duration (139.5 vs 74.8 days with and without diabetes respectively), number of services (16.8 vs 9.9, p<.001), and total episode charges ($3,473 vs $1,482) was significant (p<.001), using uncomplicated trauma as an example. The effects of post-operative complications were even more pronounced (e.g., $6,908 vs $1,482 for uncomplicated trauma episodes). CONCLUSIONS: These findings suggest that accident and injury payments should adjust for the impact of post-operative complications and diabetes on treatment duration, intensity, and costs.