This study was undertaken in order to estimate the accuracy of disease code of the Korean National Medical Insurance Data and disease the characteristics related to the accuracy. To accomplish these objectives, 2,431 cases coded as notifiable acute communicable diseases (NACD) were randomly selected from 1994 National Medical Insurance data file and family medicine specialists reviewed the medical records to confirm the diagnostic accuracy and investigate the related factors. Major findings obtained from this study are as follows: 1. The accuracy rate of disease code of NACD in National Medical Insurance data was very low, 10.1% (95% C.I.: 8.8-11.4). 2. The reasons of inaccuracy in disease code were 1) claiming process related administrative error by physician and non-physician personnel in medical institutions (47.0%), 2) input error of claims data by key punchers of National Medical Insurer (31.3%) and 3) diagnostic error by physicians (21.7%). 3. Characteristics significantly related with lowering the accuracy of disease code were location and level of the medical institutions in multiple logistic regression analysis. Medical institutions in Seoul showed lower accuracy than those in Kyonngi, and so did general hospitals, hospitals and clinics than tertiary hospitals. Physician related characteristics significantly lowering disease code accuracy of insurance data were sex, age group and specialty. Male physicians showed significantly lower accuracy than female physicians; thirties and forties age group also showed significantly lower accuracy than twenties, and so did general physicians and other specialists than internal medicine/pediatric specialists. This study strongly suggests that a series of policies like 1) establishment of peer review organization of National Medical Insurance data, 2) prompt nation-wide expansion of computerized claiming network of National Medical Insurance and 3) establishment and distribution of objective diagnostic criteria to physicians are necessary to set up a national disease surveillance system utilizing National Medical Insurance claims data.