Introduction: Administrative claims data have not commonly been used to study the clinical effectiveness of medications for rheumatoid arthritis (RA) because of the lack of a validated algorithm for this outcome. We created and tested a claims-based algorithm to serve as a proxy for the clinical effectiveness of RA medications.Methods: We linked Veterans Health Administration (VHA) medical and pharmacy claims for RA patients participating in the longitudinal Department of Veterans Affairs (VA) RA registry (VARA). Among individuals for whom treatment with a new biologic agent or nonbiologic disease-modifying agent in rheumatic disease (DMARD) was being initiated and with registry follow-up at 1 year, VARA and administrative data were used to create a gold standard for the claims-based effectiveness algorithm. The gold standard outcome was low disease activity (LDA) (Disease Activity Score using 28 joint counts (DAS28) ≤ 3.2) or improvement in DAS28 by > 1.2 units at 12 ± 2 months, with high adherence to therapy. The claims-based effectiveness algorithm incorporated biologic dose escalation or switching, addition of new disease-modifying agents, increase in oral glucocorticoid use and dose as well as parenteral glucocorticoid injections.Results: Among 1,397 patients, we identified 305 eligible biologic or DMARD treatment episodes in 269 unique individuals. The patients were primarily men (94%) with a mean (± SD) age of 62 ± 10 years. At 1 year, 27% of treatment episodes achieved the effectiveness gold standard. The performance characteristics of the effectiveness algorithm were as follows: positive predictive value, 76% (95% confidence interval (95% CI) = 71% to 81%); negative predictive value, 90% (95% CI = 88% to 92%); sensitivity, 72% (95% CI = 67% to 77%); and specificity, 91% (95% CI = 89% to 93%).Conclusions: Administrative claims data may be useful in evaluating the effectiveness of medications for RA. Further validation of this effectiveness algorithm will be useful in assessing its generalizability and performance in other populations. © 2011 Curtis et al.; licensee BioMed Central Ltd.