The current literature provides limited information about the cost-burden of Hepatitis C. OBJECTIVES: To identify all medical and pharmacy costs accrued by members with Hepatitis C in a Medicaid MCO during 1999. METHODS: Hepatitis C-infected patients were identified from a database of continuously enrolled members from an inner-city Medicaid MCO in Philadelphia during 1999 using ICD-9 codes indicative of Hepatitis C. Medical and pharmacy claims for these identified members during this study period were obtained and analyzed. A subanalysis comparing patients prescribed combination ribavirin/interferon alfa-2b therapy with patients not prescribed combination therapy was performed. Costs were reported as reimbursements paid for medical claims and pharmacy claims (AWP–14.5%). RESULTS: From a cohort of 73,869 members, 395 members (0.535%) met inclusion criteria for Hepatitis C. The mean age was 46.5 years (SD=9.5; range=4 - 81) and 213 (53.9%) were male. These members had 17,507 medical claims resulting in payments of $4,075,082. Inpatient hospital services accounted for 48% of these costs. There were 27,681 pharmacy claims that totaled $1,495,096. Sixty patients received combination therapy, which totaled $375,468 in pharmacy claims (n=444). Comparing patients prescribed combination therapy and patients not prescribed combination therapy, medical costs were $2,580/member and $11,702/member, respectively. In addition, pharmacy costs were $8,610/member and $2,920/member, respectively. Total costs in 1999 for patients prescribed combination therapy was $11,190/member and for patients not prescribed combination therapy was $14,622/member. These results were not adjusted for disease severity. CONCLUSIONS: Hepatitis C is a very costly disease. Total healthcare costs to this Medicaid MCO during 1999 for the 395 members identified with Hepatitis C exceeded $5.5 million. In addition, total costs were less for members prescribed combination ribavirin/interferon alfa-2b therapy compared with members not prescribed combination therapy. Further investigation is needed to explain the observed differences in healthcare expenditures between these two populations.