Analyzes Medicare outpatient claims to see if relatively poor quality of small rural hospitals' claims data have amplified the negative effects of the new payment system on small hospitals. Compares three indicators of quality across urban, rural, and small rural hospitals: 1) proportion of claims with missing procedure codes, 2) proportion of claims with multiple procedures codes, and 3) proportion of "low-intensity" versus higher intensity evaluation and management or emergency room services. Finds no significant differences among urban, rural, and low-volume rural hospitals with respect to missing codes; urban hospitals were more likely to have multiple codes; and small rural hospitals were substantially more likely to submit low intensity claims. Study does not refute the possibility that undercoding played a role in Centers for Medicare & Medicaid Services's forecasts of negative impact of the outpatient prospective payment system for small rural hospitals. Report available on request by contacting the Center.