PEPPER arrives: Are you an outlier?

What is PEPPER?

By now, skilled nursing facilities should have received the CMS Program for Evaluating Payment Patterns Electronic Reports ("PEPPER"). PEPPER is a Medicare Part A claims data report that compares your SNF to aggregated state, national and Medicare Administrative Contractor (MAC) or Fiscal Intermediary (FI) jurisdiction data. PEPPER includes this comparative data for six "Target Areas": 1) Therapy RUGs with high ADLs; 2) Nontherapy RUGs with high ADLs; 3) Change of therapy assessments; 4) Ultrahigh therapy RUGs; 5) Therapy RUGs; and 6) 90+ day episodes of care.

How to use PEPPER

Your PEPPER report can help you compare your facility to other SNFs, and determine whether you have been identified as an outlier at risk for improper payments. PEPPER considers a SNF to be an outlier if its Target Areas are at or above the 80th percentile, or at or below the 20th percentile, depending on the area. If your PEPPER shows you are an outlier, an internal audit should be conducted to identify any improper payments or non-compliant practices. CMS is quick to point out that variances from the national data do not necessarily mean billing irregularities have occurred. However, it would be wise to know whether there is a reason why the government has identified you as an outlier.

The following chart shows the six Target Areas, and recommendations for when and what to audit:
 

Learn more

You can learn more about PEPPER from CMS here: www.pepperresources.org, where you will find background information, training videos, and reports addressing PEPPER.

MPA can help

While PEPPER, a new reporting format, is sure to evolve, it is clear that data-driven analysis should be a central part of your compliance auditing plan. Contact MPA if you need assistance in designing and auditing strategy.