Reliance on prescription opioids to manage pain has been associated with increases in diversion, overdose, and addiction. Prevalence of misuse and abuse has been shown to be higher among government-insured populations than commercially insured populations. However, the prevalence and costs of misuse/abuse among the Medicare fee-for-service (FFS) population has not been studied. To (a) determine the prevalence and costs of prescription opioid misuse/abuse and (b) evaluate the prevalence and costs associated with those identified as at risk for opioid misuse/abuse in Medicare FFS beneficiaries. This retrospective case-control study used Medicare claims data for the calendar years of 2010 and 2011 and included Medicare beneficiaries aged at least 18 years. The index date was the date of first diagnosed misuse/abuse or at risk for abuse and had to occur between July 1, 2010, and June 30, 2011, and beneficiaries had to have at least 6 months continuous eligibility before and after the index date. Matching (1:1) was used for comparing opioid misusers/abusers with nonabuser controls, as well as comparing patients at risk for opioid abuse with controls not at risk for abuse. Controls were matched to cases by gender, age, disability, and geographic region. The index date of the control patient was set equal to the index date of the matched case. Prevalence of misuse/abuse in the Medicare FFS population was 13.1 per 1,000 persons, with the majority among patients receiving Medicare based on disability (76.2%). The prevalence of at risk for misuse/abuse was 117.4 per 1,000 persons. Approximately half of the Medicare FFS patients used an opioid. Overall total annual unadjusted mean costs of health care resources were significantly greater for abusers than for matched controls ($46,194 vs. $21,964; P < 0.0001), with a mean annual excess cost of $24,230. The overall total adjusted 6-month post-index mean costs of health care resources for abusers was significantly greater than that of matched controls ($33,942 vs. $10,754; P < 0.0001), with a mean excess cost of $23,188. The prevalence of diagnosed abuse among Medicare FFS population (13.1 per 1,000 persons) was higher than other payer groups studied using similar ICD-9-CM codes, and the majority of abuse was among those receiving Medicare based on disability (76.2%). The prevalence of at-risk abuse was 9 times higher than the prevalence of diagnosed abuse. As with other studies, health care resource utilization and costs were significantly greater for diagnosed abuse than matched controls. This study was sponsored by Pfizer. Roland is a Pfizer employee and stockholder and was involved in all aspects of the study as part of a mid-career fellowship in pharmacoeconomics with the University of Utah. Ye and Stevens are employees of University of Utah, and Oderda was an employee of University of Utah, which received financial support from Pfizer in connection with the development of this manuscript. Oderda also reports consulting fees from Pfizer, Trevena, and Pacira, unrelated to this study. The results of this study were presented at the Academy of Managed Care Pharmacy Nexus 2015; October 26-29, 2015; Orlando, FL, and the AMCP Managed Care & Specialty Pharmacy Annual Meeting 2016; April 19-22, 2016; San Francisco, CA.