Accuracy of Hospital Discharge Codes in Medicare Claims for Knee and Hip Replacement Patients

Background:Despite the importance of the hospital discharge destination field ("discharge code" hereafter) for research and payment reform, its accuracy is not well established.Objectives:The aim of this study was to examine the accuracy of discharge codes in Medicare claims.Data Sources:2012-2015 Medicare claims of knee and hip replacement patients.Research Design:We identified patients' discharge location in claims and compared it with the discharge code. We also used a mixed-effects logistic regression to examine the association of patient and hospital characteristics with discharge code accuracy.Results:Approximately 9% of discharge codes were inaccurate. Long-term care hospital discharge codes had the lowest accuracy rate (41%), followed by acute care transfers (72%), inpatient rehabilitation facility (80%), and home discharges (83%). Most misclassifications occurred within 2 broad groups of postacute care settings: Home-based and institutional care. The odds of inaccurate discharge codes were higher for Medicaid-enrolled patients and safety-net and low-volume hospitals.Conclusions:Inaccurate hospital discharge coding may have introduced bias in studies relying on these codes (eg, evaluations of Medicare bundled payment models). Inaccuracy was more common among Medicaid-enrolled patients and safety-net and low-volume hospitals, suggesting more potential bias in existing study findings pertaining to these patients and hospitals.