Aims Health services research (HSR) is affected by a widespread problem related to service terminology including non-commensurability (using different units of analysis for comparisons) and terminological unclarity due to ambiguity and vagueness of terms. The aim of this study was to identify the magnitude of the terminological bias in health and social services research and health economics by applying an international classification system. Methods This study, that was part of the PECUNIA project, followed an ontoterminology approach (disambiguation of technical and scientific terms using a taxonomy and a glossary of terms). A listing of 56 types of health and social services relevant for mental health was compiled from a systematic review of the literature and feedback provided by 29 experts in six European countries. The disambiguation of terms was performed using an ontology-based classification of services (Description and Evaluation of Services and DirectoriEs – DESDE), and its glossary of terms. The analysis focused on the commensurability and the clarity of definitions according to the reference classification system. Interrater reliability was analysed using κ. Results The disambiguation revealed that only 13 terms (23%) of the 56 services selected were accurate. Six terms (11%) were confusing as they did not correspond to services as defined in the reference classification system (non-commensurability bias), 27 (48%) did not include a clear definition of the target population for which the service was intended, and the definition of types of services was unclear in 59% of the terms: 15 were ambiguous and 11 vague. The κ analyses were significant for agreements in unit of analysis and assignment of DESDE codes and very high in definition of target population. Conclusions Service terminology is a source of systematic bias in health service research, and certainly in mental healthcare. The magnitude of the problem is substantial. This finding has major implications for the international comparability of resource use in health economics, quality and equality research. The approach presented in this paper contributes to minimise differentiation between services by taking into account key features such as target population, care setting, main activities and type and number of professionals among others. This approach also contributes to support financial incentives for effective health promotion and disease prevention. A detailed analysis of services in terms of cost measurement for economic evaluations reveals the necessity and usefulness of defining services using a coding system and taxonomical criteria rather than by ‘text-based descriptions’.