Objectives Postpartum depression impacts 6.5-12.9% of U.S. women. Postpartum depression is associated with impaired bonding and development, marital discord, suicide, and infanticide. However, the current standard of care is to not screen women for postpartum depression. This study modeled the cost-effectiveness of physicians screening for and treating postpartum depression and psychosis in partnership with a psychiatrist. Methods This study follows a hypothetical cohort of 1000 pregnant women experiencing one live birth over a 2-year time horizon. We used a decision tree model to obtain the outcomes of screening for and treating postpartum depression and psychosis using the Edinburgh Postnatal Depression Scale. We use a Medicaid payer perspective because they cover approximately 50% of births in the U.S. The cost-effectiveness of the intervention is measured in cost per remission achieved and cost per quality-adjusted life-year (QALY) gained. We conducted both deterministic and probabilistic sensitivity analyses. Results Screening for and treating postpartum depression and psychosis produced 29 more healthy women at a cost of $943 per woman. The incremental cost-effectiveness ratios of the intervention branch compared to usual care were $13,857 per QALY gained (below the commonly accepted willingness to pay threshold of $50,000/QALY gained) and $10,182 per remission achieved. These results were robust in both the deterministic and probabilistic sensitivity analyses of input parameters. Conclusions for Practice Screening for and treating postpartum depression is a cost-effective intervention and should be considered as part of usual postnatal care, which aligns with the recently proposed recommendations from the U.S. Preventive Services Task Force.