BACKGROUND: Inpatient utilization associated with incidence of geriatric new-onset epilepsy has not been characterized in any large study, despite recognized high levels of risk factors (comorbidity). METHODS: Retrospective study using administrative data (Oct '01-Sep '05) from the Veterans Health Administration from a nationwide sample of 824,483 patients over age 66 in the retrospective observational Treatment In Geriatric Epilepsy Research (TIGER) study. Psychiatric and medical hospital admissions were analyzed as a function of patient demographics, comorbid psychiatric, neurological, and other medical conditions, and new-onset epilepsy. RESULTS: Elderly patients experienced a 15% hospitalization rate in FY00 overall, but the subset of new-onset epilepsy patients (n = 1,610) had a 52% hospitalization rate. New-onset epilepsy was associated with three-fold increased relative odds of psychiatric admission and nearly five-fold increased relative odds of medical admission. Among new-onset epilepsy patients, alcohol dependence was most strongly associated with psychiatric admission during the first year after epilepsy onset (odds ratio = 5.2; 95% confidence interval 2.6-10.0), while for medical admissions the strongest factor was myocardial infarction (odds ratio = 4.7; 95% confidence interval 2.7-8.3). CONCLUSION: From the patient point of view, new-onset epilepsy was associated with an increased risk of medical admission as well as of psychiatric admission. From an analytic perspective, omitting epilepsy and other neurological conditions may lead to overestimation of the risk of admission attributable solely to psychiatric conditions. Finally, from a health systems perspective, the emerging picture of the epilepsy patient with considerable comorbidity and demand for healthcare resources may merit development of practice guidelines to improve coordinated delivery of care.