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Abstract Background Individual-patient data meta-analysis (IPD-MA) is an increasingly popular approach because of its analytical benefits. IPD-MA of observational studies must overcome the problem of confounding, otherwise biased estimates of treatment effect may be obtained. One approach to reducing confounding bias could be the use of propensity score matching (PSM). IPD-MA can be considered as two-stage clustered data (patients within studies) and propensity score matching can be implemented within studies, across studies, and combining both. Methods This article focuses on implementation of four PSM-based approaches for the analysis of data structure that exploit IPD-MA in two ways: (i) estimation of propensity score model using single-level or random-effects logistic regression; and (ii) matching of propensity scores (PS) across studies, within studies or preferential-within studies. We investigated the performance of these approaches through a simulation study, which considers an IPD-MA that examined the success of different treatments for multidrug-resistant tuberculosis (MDR-TB). The simulation parameters were varied according to three treatment prevalences (according to studies, 50% and 30%), three levels of heterogeneity between studies (low, moderate and high) and three levels of pooled odds ratio (1, 1.5, 3). Results All approaches showed greater biases at the higher levels of heterogeneity regardless of the choices of treatment prevalences. However, matching of propensity scores using within-study and preferential-within study reported better performance compared to matching across studies when treatment prevalence varied across-studies. For fixed prevalences, a random-effect propensity score model to estimate propensity scores followed by matching of propensity scores across-studies achieved lower biases compared to other PSM-based approaches. Conclusions Propensity score matching has wide application in health research while only limited literature is available on the implementation of PSM methods in IPD-MA, and until now methodological performance of PSM methods have not been examined. We believe, this work offers an intuition to the applied researcher for the choice of the PSM-based approaches.