The US spends more annually per capita on health care than any other country, with inpatient care accounting for approximately 20% to 30% of total expenditures. 1,2 In an effort to eliminate waste, the US health care system is evolving away from fee-for-service payment models toward value-based reimbursement models. Highstakes applications of health care quality measures, such as attaching financial incentives to performance and public reporting of data regarding quality or cost, are central to the effort to optimize health care spending. Because administrative data (ie, diagnosis and procedural codes) are standardized and can be accessed at a low cost in virtually every practice setting, these codes are commonly used to construct process and outcome quality measures used in value-based payment and quality assessment programs.Although the use of administrative data for quality measurement is convenient, this approach creates opportunities to "game the system" because hospitals can optimize their coding practices to maximize reimbursement or perceived performance. [3][4][5][6] For outcome quality measures, risk adjustment has a critical role by accounting for underlying variation in the level of risk across patient populations, thereby ensuring that measurement, comparisons, and reimbursement are fair