One hundred eleven patients with burns who were age 60 years or older were treated from January 1984 through December 1992. Twenty-nine patients had pulmonary failure defined as 7 or more days of ventilatory support from the day of burn. The mortality rate for these patients was 41%; only four were discharged to home. The mortality rate for patients without pulmonary failure was 11%. Billing information was analyzed for 102 of the 111 patients. Charges for patients without pulmonary failure were two to three times greater than reimbursement. Charges for patients with pulmonary failure were 4 to 14 times greater than reimbursement. Reimbursement for elderly patients with burns is inadequate. Altering the Diagnosis-Related Group (DRG) definition of extensive burn to reflect the severity of injury in the geriatric population is one step toward reimbursement reform. Patients who require 7 or more days of ventilatory support after burn injury should be reimbursed under a separate DRG category or should have a DRG modifier.