OBJECTIVES: To estimate hospital and facility costs resulting from falls in long term care facilities (LTCFs). METHODS: The study employed a non-randomized, before and after with comparison group design. Propensity scoring and matching were used to control for baseline differences between fallers and non-fallers. A multi-facility long-term care company provided data from residents institutionalized between January 1, 2002 and October 30, 2004. Data included Minimum Data Set (MDS) observations, Resource Utilization Group (RUG) classifications, and demographics. An index date was assigned to each resident to identify pre-and post-periods. The index date was defined as the date of the first fall for fallers. The index date was assigned to non-fallers such that the time in the pre-period was equal for fallers and non-fallers. Hospital costs were estimated from MDS measures of the numbers of hospitalizations in each period and a mean fall-related hospital reimbursement of $14,769. LTCF costs were estimated from RUG classifications and associated payment rates. Total reimbursement per resident per year (PRPY) was calculated as the sum of annualized LTCF and hospital reimbursement. Fall-related costs were estimated as the difference in changes in reimbursement between groups from pre- to post-periods. RESULTS: The matched sample included 1130 fallers and 1130 non-fallers. Fallers had substantially more fractures and hospitalizations in the post-period than non-fallers. The sum of LTCF and hospital costs increased $4722 PRPY for fallers from pre- to post-periods; non-fallers' costs decreased by $1,537 PRPY. The difference in changes - $6,259 (95% CI = $2,034 to $10,484) PRPY– represents fall-related costs. About 60% of the difference was attributable to higher hospitalization costs for fallers. In, addition fallers were more likely to be discharged to hospitals or to die. CONCLUSION: Falls in LTCFs result in substantial costs, primarily due to higher rates of fractures and hospitalizations.