Vol. 16 •Issue 12 • Page 24
Pepper: An Effort to Reduce the National Payment Error
Specific target areas at high risk for payment errors are the focus of this Centers for Medicare and Medicaid Services program.
PEPPER, the Program for Evaluating Payment Patterns Electronic Report, is an electronic data report containing hospital-specific data for a number of problem areas (specific DRGs and discharges) that have been identified by the Centers for Medicare and Medicaid Services (CMS) at a high risk for payment errors. The intent of PEPPER is to assist hospitals in their payment error reduction initiatives by providing hospital-specific and aggregate statewide claims data statistics for these CMS target areas. The PEPPER data allow hospitals to compare their performance to that of other short-term, acute-care prospective payment system (PPS) hospitals.
PEPPER cannot be used to identify the presence of payment errors but it can support hospital compliance initiatives and guide auditing and monitoring efforts to help hospitals identify and prevent payment errors. In addition, PEPPER can present the pattern of Medicare payments made to your hospital compared to the rest of the hospitals in your state.
Launching PEPPER
CMS launched the Payment Error Preven-tion Program (PEPP) in 1999 as part of the 6th Scope of Work (SOW) contract with the quality improvement organizations (QIOs). QIOs were responsible for implementing PEPP and proposed their own individual state-specific projects focusing on medical necessity of admissions and DRG/coding issues.
In the 7th scope of work, which began in 2002, the CMS Hospital Payment Monitoring Program (HPMP) replaced PEPP. While there were improvements to the program, the overall goal remains the same: to measure, monitor and reduce the incidence of Medicare fee-for-service payment errors for short-term, acute-care, inpatient PPS hospitals. To achieve this goal, QIOs work with hospitals by analyzing data, conducting audits, helping hospitals identify errors, sharing interventions and tools, and working with hospitals to implement system changes to prevent payment errors.
The TMF Health Quality Institute (formerly known as the Texas Medical Foundation) serves as the QIO support center (QIOSC) to support CMS and QIOs with the implementation of HPMP. As the QIOSC, they were asked to develop a tool that QIOs could utilize to identify hospitals that might benefit from QIO support and assistance. TMF developed the First-look Analysis for Hospital Outlier Monitoring (FATHOM), which is a cutting-edge data analytic tool that provides administrative hospital and state-specific data for specific CMS target areas to QIOs.
Development of PEPPER
PEPPER was developed by the QIOSC in response to the QIO community’s desire to be able to share the hospital-specific information in the FATHOM reports with the hospitals in their respective states. PEPPER provides hospitals with administrative claims data that can be used to prioritize areas in which to focus their efforts.
CMS Target Areas
PEPPER is a Microsoft Excel program that provides Medicare claims data statistics in a number of CMS-designated target areas. CMS selected the target areas based on historical knowledge, experience and analysis of payment errors related to medically unnecessary admissions, inappropriate readmissions and DRG coding errors. Results of the national analysis of payment errors identified these target areas as high risk in terms of dollars in error or proportion of payment errors. The current CMS target areas include:
These target areas may change over time in response to changes in payment error trends. The HPMP QIOSC provides all QIOs with quarterly hospital-specific data for inpatient acute care PPS hospitals.
Have You Used PEPPER?
PEPPER data can be helpful for the hospital community in so many ways and can support QIOs in their HPMP efforts. Compliance officers can incorporate PEPPER information into their ongoing internal auditing and monitoring activities. PEPPER displays data tables and graphs comparing hospital data to statewide aggregate data for target areas. PEPPER allows the user to sort this data in a variety of ways, because the data is provided as an Excel spreadsheet. PEPPER reports are very useful for presentation to administration, physicians and for educational training activities. PEPPER can assist hospitals in the following ways:
A Look at PEPPER
PEPPER provides comparative data for each target area, including data, tables and graphs comparing hospital data to statewide aggregate data for the 10th percentile median, 75th and 90th percentiles to the target areas percents.
PEPPER provides hospitals with their percentile value for each target area, as well as suggestions if the hospital is an outlier in any target area.
Example #1: DRG 079
If at or above the 75th percentile:
If at or below 10th percentile:
Remember: The physician must determine a diagnosis of pneumonia. The coder should not assign codes based on the laboratory or radiological findings without seeking clarification from the physician.
Example #2: One-Day Stay
If at or above the 75th percentile:
If at or below 10th percentile:
PEPPER Data Tables
PEPPER provides data tables for each target area, summarized over fiscal year and the current fiscal year to date. Please note that QIOs may select different numbers of time periods to include in PEPPERs; QIOs may choose to provide data for fiscal years or for fiscal quarters. The measures include the total number of discharges in the target area (numerator), the denominator count of discharges, the proportion of these two figures, and average length of stay and Medicare payment data. In addition, aggregate statewide data are provided for comparative purposes. For an example of this data table, go to our Web site at www.advanceweb.com/him.
PEPPER Compare Worksheet
The Compare Worksheet helps hospitals prioritize auditing and monitoring efforts by using the product of two factors: the number of discharges for area times the hospital’s “outlier value” for that area. The greater this value, the more emphasis the hospital should give to the target area with regard to auditing and monitoring. Positive outlier value findings identify possible overcoding errors, while negative values generally identify possible undercoding errors. An example of the PEPPER Compare Worksheet can be found on our Web site at www.advanceweb.com/him. Note that the “Per-cent” column is color-coded; red indicates the hospital’s percent is at or above the 75th statewide percentile, while green indicates the hospital’s percent is at or below the 10th statewide percentile.
PEPPER Graphs
PEPPER graphs provide a visual representation of the proportion for each target area over time. The graphs can assist hospitals in identifying trends in discharges from one year to the next. This could be a result of changes in the medical staff, coding staff, utilization review process or hospital services. Graphs are particularly useful in presentations where a picture is “worth a thousand words.” An example of a PEPPER graph can also be found at www.advanceweb.com/him.
The PEPPER User’s Guide can assist you with interpreting the data in PEPPER. To review the PEPPER Users Guide, go to www.hpmpresources.org.
PEPPER for Success
How can PEPPER benefit hospitals?
Auditing and Monitoring
Hospital System Comparison
Reach Out to Physicians
Utilization Management
Compliance Officers
HIM Professionals
Review the medical record to:
Get Involved
A payment error results when the medical record documentation does not support the medical necessity of the services received, when services should have taken place in a setting other than an acute level of care or when the assignment of ICD-9-CM codes is not supported by medical record documentation resulting in incorrect DRG assignment.
While efforts to reduce payment errors have been a QIO priority for the past several years, improvements can only be attained with hospital involvement and assistance. It is critical that hospitals continue their commitment and efforts to work with the QIOs to reduce payment errors.
PEPPER does not identify billing and payment errors; however it can flag areas that may have problems that require auditing and monitoring efforts. Use PEPPER to support your hospital compliance program, including current and future auditing and improvement activities.
The QIO in your state is available to offer their expertise, experience and resources to support your use of PEPPER with the goal of reducing payment errors. Contact your QIO (see the QIO finder at www.ahqa.org) for further assistance in using PEPPER; or to learn more about PEPPER you may also go to www.pepper-info.org/general-qa.html.
Renato Estrella has been with IPRO Inc. (New York Quality Improvement Organization) for 7 years, where he is the director of HIM and serves as adjunct professor in allied health sciences at Molloy College in Rockville Center, NY.