BACKGROUND: Trends in the prevalence of cognitive impairment (CI) based on cognitive assessment instruments are often inconsistent with those of neurocognitive disorders (ND) based on Medicare claims records. OBJECTIVE: We hypothesized that improved ascertainment and resulting decrease in disease severity at the time of diagnosis are responsible for this phenomenon. METHODS: Using Medicare data linked to the Health and Retirement Study (1992-2012), we performed a joint analysis of trends in CI and ND to test our hypothesis. RESULTS: We identified two major contributors to the divergent directions in CI and ND trends: reductions in disease severity explained more than 60% of the differences between CI and ND prevalence over the study period; the remaining 40% was explained by a decrease in the fraction of undiagnosed individuals. DISCUSSION: Improvements in the diagnoses of ND diseases were a major contributor to reported trends in ND and CI. Recent forecasts of CI and ND trends in the U.S. may be overly pessimistic.