OBJECTIVES: To assess the utilization patterns and costs for healthcare services for chronic arthritis treatment among children and adolescents enrolled in a state Medicaid program. METHODS: A cross-sectional, descriptive analysis of a state Medicaid administrative claims dataset was conducted. Medical services claims with a primary diagnosis code for rheumatic diseases (ICD-9-CM 696.0, 695.4, 710.X, 714.0, 714.2, 714.3X, and 720.X) during calendar year 2003 for recipients under 21 years of age were extracted. Prescription medication claims were extracted using de-identified unique recipient numbers obtained from medical services claims. Prevalence and medical services use rates were calculated by demographic categories. Costs were reported from the perspective of Medicaid. RESULTS: There were 171 children and adolescents who used medical services for care of chronic arthritis, at an overall rate of 0.8/1000 recipients. The highest rates by demographic groups occurred among females (1.0/1000), whites (0.9/1000), and recipients between 15-20 years of age (1.9/1000). Office visits accounted for the majority of medical services utilized (99%), at a rate of 3.4 visits/1,000 recipients. Medicaid paid approximately $415/child and adolescent recipient for chronic arthritis-related medical services during the year. Dollars paid for office visits accounted for 85% of the medical services costs at an average cost of $86 per visit. A majority of the sample (63%) had a diagnosis for rheumatoid arthritis (RA)/juvenile rheumatoid arthritis (JRA). Among these children and adolescents, 62% had at least one prescription claim for a narcotic analgesic, NSAID, oral steroid, DMARD, or biologic agent at an average cost of $74/claim. CONCLUSION: The prevalence and medical services utilization patterns for chronic arthritis among children and adolescent recipients in this State Medicaid population differed by demographic characteristics. Office visits accounted for a majority of medical services use and dollars. Most of the children and adolescents with chronic arthritis had a diagnosis for RA/JRA.