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The impact of home infusion therapies on the pharmaceutical services drug budget of the Colorado Medicaid program was evaluated retrospectively. Pharmacy billing claims and prior authorization forms for home infusion therapies submitted to the Colorado Department of Social Services during a 26-month period were reviewed to determine the costs of the drug or hydration solutions and ancillary products necessary for the preparation and administration of the solutions. A dispensing fee of +3.40 per dose was figured into calculations of total costs of home infusion therapies, and an estimated cost of +100-+150 per day for follow-up care was added. Equivalent costs of hospitalization were calculated using an average per diem charge of +315. A total of 61 patients received 1361 days of home infusion therapy during the study period. The majority of patients received home antimicrobial therapy; 752 days of hospitalization theoretically were avoided because of home administration of antimicrobial agents, which translates into a cost savings of +76,716-+114,316. Patients also received home parenteral nutrition therapy, analgesic therapy, and rehydration therapy that yielded cost savings of +48,374-+78,824 but in some cases resulted in higher costs than hospitalization would have. Home infusion therapies increased pharmaceutical services costs by +99,475, representing an important shift of costs from the hospital services budget to the pharmaceutical services budget. Home infusion therapies generally incur lower costs than would be incurred during an equivalent hospital stay. The Colorado Medicaid budget should be adjusted to compensate for the shift of costs from hospital to pharmaceutical services.