Compared with notifiable disease surveillance, claims-based algorithms estimate higher Lyme disease incidence, but their accuracy is unknown. We applied a previously developed Lyme disease algorithm (diagnosis code plus antimicrobial drug prescription dispensing within 30 days) to an administrative claims database in Massachusetts, USA, to identify a Lyme disease cohort during July 2000-June 2019. Clinicians reviewed and adjudicated medical charts from a cohort subset by using national surveillance case definitions. We calculated positive predictive values (PPVs). We identified 12,229 Lyme disease episodes in the claims database and reviewed and adjudicated 128 medical charts. The algorithm's PPV for confirmed, probable, or suspected cases was 93.8% (95% CI 88.1%-97.3%); the PPV was 66.4% (95% CI 57.5%-74.5%) for confirmed and probable cases only. In a high incidence setting, a claims-based algorithm identified cases with a high PPV, suggesting it can be used to assess Lyme disease burden and supplement traditional surveillance data.