Harmony Healthcare Blog

Program for Evaluating Payment Patterns Electronic Report (PEPPER)

Posted by The Harmony Team on Wed, Aug 07, 2013

Edited by Kris Mastrangelo

Skilled Nursing Facilities (SNFs) should check the mailbox on and around August 30, 2013 for an envelope with red print on the outside containing your facility specific PEPPER. What is PEPPER? CMS has announced that they will be mailing all SNFs a “Program for Evaluating Payment Patterns Electronic Report” (PEPPER). This report will detail Medicare claims data in certain targeted areas and compare your facility to other SNFs nationally.

The PEPPER is not a new report for CMS. Historically, CMS has provided this report since 2003 to other Medicare provider types. PEPPER will now be distributed to SNFs. PEPPER gives provider-specific Medicare data statistics for services vulnerable to improper payments, according to the federal government, and allows providers to see how their facility compares to all other SNFs across the state, nation or Medicare Audit Contractors (MAC) jurisdiction. PEPPER data is also shared with both Medicare Audit Contractors (MACs) and the Medicare Recovery Auditor Contractors (RACs).

Targeted areas were derived from two recent Office of Inspector General (OIG) Reports titled “Inappropriate Payments to Skilled Nursing Facilities Cost Medicare More Than a Billion Dollars in 2009” (November 2012) and “Questionable Billing by Skilled Nursing Facilities” (December 2010). These reports identified increased utilization of High ADL and Upper Rehabilitation RUG categories as well as increased length of Medicare stays “even though beneficiary characteristics remained largely unchanged”. The reports also detailed how inaccuracies in MDS coding contributed to over-payments.

The 2012 OIG report stated that SNFs billed “one-quarter of claims in error in 2009, resulting in $1.5 billion in inappropriate Medicare payments.”  The OIG recommended further actions “to deter SNFs from billing inappropriately and to prevent Medicare from paying for these claims.” Since the release of these reports, Harmony (HHI) has seen a significant increase in Medicare reviews.

OIG based their findings on documentation reviews coupled with Medicare data statistics. Documentation must support reasonable and necessary therapy provision, MDS coding and a clinically appropriate length of Medicare stay.  Although a patient may receive reasonable and necessary services, facilities must remember that Medicare reviewers can only base their determination on the documentation they review. Documentation must reflect the critical thought process of the therapist and the nurse. SNF documentation is the only way to communicate that services are reasonable, necessary and meet Medicare skilled coverage requirements.

CMS indicates they expect to include the following comparative data:

  • Therapy RUGs with High ADLs
  • Non-Therapy RUGs with High ADLs
  • Change of Therapy Assessment

SNFs should prepare for continued Additional Documentation Requests (ADRs) through establishing an audit process for their records to ensure all documentation supports Medicare coverage criteria. SNFs should ensure all Nursing and Rehabilitation staff receive education in regard to Medicare coverage criteria to ensure the professionals providing care have a clear understanding of the requirements that the documentation is expected to reflect. 

Do your medical records support skilled care?

 PEPPER Analysis


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