Hyperbilirubinemia is a serious condition affecting many neonates, and there is a clinical need to monitor the bilirubin levels in susceptible infants. Transcutaneous bilirubinometry by means of an optical patch taped onto the skin would offer an inexpensive, non-invasive method to measure the bilirubin levels in infants. Such a system should give reliable bilirubin readings invariant with the melanin pigmentation, water content, and condition of the skin. We have determined the optical properties of neonatal skin. We are using these optical properties to create scaled phantom models of the skin, and to conduct Monte Carlo computer simulations of light propagation in skin. These models are being used to study how reflectance spectroscopy is affected by the spatial distribution of absorbing chromophores in the skin, and by the wavelength dependence of light collection.