Mississippi Foundation for Medical Care (MFMC) conducted a review of gallbladder surgery performed on Mississippi Medicare Patients using hospital claims files and limited record review for verification of claims file data. Significant error rates in the surgeon identification number were found in the claims files. It should also be noted that the current ICD-9-CM coding system does not allow for identification of laparoscopic cholecystectomies converted to open procedures. Past studies have attempted to use claims data alone for these types of analyses. These findings demonstrate the importance of using caution by those attempting to use claims data (without verification) to define patterns of hospital utilization, clinical outcomes and/or physician profiling. Claims data must be tested for validity for reliable pattern analysis. In addition, considerable variation was found among providers in elements such as conversion rates, complication and readmission rates. A few surgeons showed patterns for critical variables that were quite different from the universe. There was however, no statistically significant differences associated between volume of cases performed and outcomes. Time frame comparisons over several years show significant (> 80%) increase in gallbladder surgery since the introduction of the laparoscopic procedure.