The impact of acute renal failure (ARF) on cost was evaluated in elderly patients with congestive heart failure (CHF). METHOD: We reviewed medical records of 2,176 Connecticut Medicare beneficiaries, aged 65 and older who were hospitalized with CHF, excluding CHF due to severe AS, MS, or primary non-cardiac illness, between January 1994 and December 1995 at 20 hospitals. ARF was defined as an increase in serum creatinine level of 25% from admission, to at least 2 mg/dL during hospitalization. We excluded patients who did not have at least two creatinine measurements (N=251). To avoid including patients with ARF as a result of procedures or complications, we excluded all patients with major complications or procedures during hospitalization (n=531). Linear regression models were used to examine the relationship between ARF and length of hospital stay and hospital cost. RESULTS: A total of 1,681 patients were included in the study sample. Of those, 164 (10%) developed ARF during hospitalization. After adjusting for confounding effects of sex, age, history of CHF, history of hypertension, diabetes, rales, hematocrit, creatinine, systolic blood pressure, and left ventricular ejection fraction, ARF was associated with a significant increase in the length of stay (LOS) by 3.31 days (p<0.0001) and a significant increase in hospital cost by $2,714 (p<0.0001). CONCLUSION: ARF in hospitalized older patients with CHF is associated with a longer LOS and higher cost. Strategies to prevent the development of ARF in high-risk hospitalized patients may provide the opportunity for marked reductions in cost.