Accuracy of Medicaid payer coding in hospital patient discharge data: implications for Medicaid policy evaluation

Abstract

Background: Ambulatory care-sensitive hospitalization rates derived from hospital discharge data have been used to compare ambulatory care across insurance and delivery system groups.

Objective: We sought to quantify the impact of coding inaccuracies in hospital discharge data on counts of hospitalizations for ambulatory care-sensitive conditions among Medicaid beneficiaries.

Methods: This was a cross-sectional comparison of administrative databases of all California Medicaid beneficiaries younger than 65 years of age. We compared the number of hospitalizations that were attributed to Medicaid beneficiaries in California's hospital discharge data for 1994 to 1999 with the number derived from a file that linked hospital discharge data with the Medicaid eligibility file.

Results: Hospital discharge data undercounted 28.2% of hospitalizations for ambulatory care-sensitive conditions among Medicaid beneficiaries and overcounted 13.4% of such admissions among non-Medicaid beneficiaries. Approximately 5% of hospitalizations for ambulatory care-sensitive conditions captured as Medicaid admissions in routine hospital discharge data were among patients who gained Medicaid coverage as a result of the hospitalization. Patients who acquire Medicaid coverage as a result of a hospitalization are much more likely to be placed into Medicaid fee for service rather than Medicaid managed care which biases comparisons of these 2 delivery models.

Conclusion: Caution should be used in the interpretation of Medicaid hospitalization rates as calculated from routine hospital discharge data. State agencies that provide hospital discharge data should consider the opportunity to improve the evaluation of Medicaid services by linking hospital discharge data with Medicaid enrollment files.