The Medicare database is commonly used for epidemiology and health services research, but validation of its data by chart review or questionnaire may be difficult and expensive. Since hospital and physician bills are independent in Medicare, however, these two data sources can be used to supplement and corroborate each other. This "internal validation" is illustrated here for hip fracture and prostatectomy. Agreement of the hospital and physician data streams regarding site of hip fracture (neck vs other), treatment of hip fracture (internal fixation vs arthroplasty), and type of prostatectomy (transurethral resection of prostate, open, or radical) was excellent, with percentage of agreement generally between 89% and 99%, and kappa statistics typically between 0.74 and 0.95. When validation with outside data sources is not readily available, such internal validation of Medicare data may be valuable.