Accuracy of Medicare Expenditures in the Medical Expenditure Panel Survey

This paper examines underreporting and underrepresentation of high expenditure cases in the Medical Expenditure Panel Survey (MEPS) and their implications for analyses. Our data come from a sample of Medicare beneficiaries in the MEPS who were matched to their Medicare claims and enrollment files, with supplemental data from the Medicare Current Beneficiary Survey (MCBS). Underreporting of expenditures affected all groups of Medicare beneficiaries in the matched sample, but uniformly so that behavioral analyses were largely unaffected. Straightforward adjustments to the MEPS expenditure estimates could align them with aggregate sources, such as the National Health Expenditure Accounts, while preserving underlying relationships between expenditures and key correlates.