The use of botulinum toxin type A (BTX) in the management of spasticity in childhood cerebral palsy (CP) is increasing. This study examined annual health care service utilization and costs associated with BTX therapy for spastic CP in Medicaid-enrolled children receiving complete health care coverage (1997 to 1999). We used pair matching as well as recent statistical technique improvements (bootstrap method) to work with limited samples. The introduction of BTX was associated with an increase of approximately $62 per month in prescription costs for the patient. However, these costs were made up by reductions in hospitalization. When each year was examined individually, reimbursements for BTX users were not different from those for pair-matched non-BTX users. These data suggest that BTX therapy does not significantly add to the costs of treating Medicaid-enrolled children with CP.