As part of CMS’ goal of preventing Medicare fraud, waste and abuse, PEPPER (Program for Evaluating Payment Patterns Electronic Report) analyzes billing patterns to determine the level of risk for improper payments in key target areas. PEPPER compares your SNF’s Medicare billing patterns to the aggregate nationally, as well as to peer facilities across your jurisdiction (MAC) and state. PEPPER focuses on target areas that have been selected as indicators of correct coding, billing, and medical necessity; however, outliers in particular areas do not necessarily indicate improper payments. PEPPER is meant to be used by providers as a window to identify potential areas for a deeper review of coding and medical record documentation. Understanding your data is critical—especially outlier target areas that may make your facility more likely to be selected for future medical review.

What you need to know about Q4FY20 PEPPER

Typically, PEPPER has provided three fiscal years of data; however, the Q4FY20 report provides only one year of data due to the transition to PDPM from RUGs. Q4FY20 target areas and follow up compliance audit recommendations are described in the table below: include:

Reading the Reports

Percentile rankings are used to identify high outliers identified in red on the reports (at or above the 80th percentile) and low outliers identified in green on the report (at or below the 20th percentile).  For each target area, statistics are provided for your facility target area percent for that factor—the numerator made up of the total count of that particular target over the denominator made up of the count of all claims or episodes of care that meet the parameters for each particular target area for your facility. See the definitions page of the report which defines each target area including the details for each numerator and denominator.  Only target areas that have reportable data (11+ targets) will include statistics.

What you need to do

      • Download your PEPPER! SNF PEPPER became available for download in early April, but reports have only been downloaded by 23% of facilities nationwide as of today. The SNF PEPPER is available at  for secure download by the CEO, Administrator, President, QAPI Officer, or Compliance Officer. Reports are not publicly available. The six-digit CMS certification number (i.e., CCN, provider no., PTAN) will be required along with a validation code from a paid facility UB-04 claim form for a patient who received services from July 1, 2020-September 30, 2020. Alternative options for access are described on the portal.
      • Review your data and identify outliers, but don’t stop there.
      • Develop and implement a follow-up audit plan with your compliance team. Document findings as part of the QA and/or Compliance Program including any training activities or other actions taken in response to audit findings.

Contact Proactive for assistance in analyzing SNF PEPPER, trending multi-facility organization reports, and reviewing a sample of claims for target areas for which your facility is an outlier compared to peers. Proactive’s PDPM coding and documentation experts will help to identify risks and opportunities for improvement and implement corrective actions as indicated. Prepare for pending PDPM medical review activity with a compliance action plan that investigates outliers promptly and demonstrates a commitment to compliance.



Blog by Amie Martin, MSN, MBA, RN, LNHA, QCP, CHC, CLNC, Proactive Medical Review

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