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For more than two decades, the federal government has been concerned with rising health care costs. In 1983, the Health Care Financing Administration sought to control hospital costs by making diagnostic and procedural data the primary determinant of hospital reimbursement through the prospective payment system. Recently, the US Congress has implemented a similar approach to control physician costs in the ambulatory care setting for the Medicare program. Through the Omnibus Budget and Reconciliation Act of 1989, any office procedure provided to Medicare patients and the reason (ie. diagnosis) must be reported in a standard format. From these data, Medicare authorities determine medical necessity and "appropriated" level of reimbursement; payment may be denied or reduced for diagnostic and office procedural services that do not fall within the defined limits for the given diagnosis.

The hospital discharge database and its ambulatory care analogue, the patient encounter database, are the sources of diagnostic and procedural information for patient and third-party billing. These databases also are used for health services research, such as the assessment of quality of care.(1-7) Consequently, the reliability and validity of the data are essential for appropriate reimbursement and valid research.

The reliability and validity of hospital discharge data have been investigated since the 1970s. Reports consistently demonstrate that inpatient data are inaccurate, particularly for diagnoses.(1-6) Some researchers believe sufficient error exists in the diagnostic information to render hospital discharge data inadequate for "detailed research and evaluation."(3(p1003)

Few similar evaluations of the reliability and validity of the ambulatory care database have been conducted, and the results vary.(8-12) Level of agreement between diagnoses listed in the office medical record and the observed events of the visit range from 20% to 90%.(8-10) Studies of the quality of computerized medical files, including patient billing files, show that between 30% and 50% of visits contain errors in the recorded data.(11-12) Underreporting of diagnoses in the major type of error; coding errors are a minor problem.(10-12) These reports are based on relatively few visits, however, ie, 26 to 150 visits; hence, they may not reflect the actual degree of validity and reliability of billing files.

This study presents the results of an investigation into the accuracy of billing information in a family practice, and is based on a large number of visits. The recording behavior of physicians on the faculty, physicians in training, family nurse practitioners (FNPs), and registered nurses was examined.

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