The medicare database is commonly used for epidemiology and health ser
vices research, but validation of its data by chart review or question
naire may be difficult and expensive. Since hospital and physician bil
ls are independent in Medicare, however, these two data sources can be
used to supplement and corroborate each other. This ''internal valida
tion'' is illustrated here for hip fracture and prostatectomy. Agreeme
nt of the hospital and physician data streams regrading site of hip fr
acture (neck vs other), treatment of hip fracture (internal fixation v
s arthroplasty), and type of prostatectomy (transurethral resection of
prostate, open, or radical) was excellent with percentage of agreemen
t generally between 89% and 99%, and kappa statistics typically betwee
n 0.74 and 0.95. When validation with outside data sources is not read
ily available, such internal validation of Medicare data may be valuab
le.