PEPPER Report: Targeted Areas for Rehabilitation – Realities of Rehabilitation

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Renee Kinder

It’s been a little over a month since the Q4FY21 release of the Skilled Nursing (SNF) Facility Program for Payment Model Assessment Electronic Report (PEPPER).

Have you downloaded your reports yet? Revised with your team?


If not, first: To get your SNF PEPPERCEO, President, Administrator, Compliance Officer, Quality Assurance/Performance Improvement Officer, or other authorized user within your organization (selecting the closest job title of his title) must:

  1. Review the PEPPER Secure Access Guide.
  2. Review the instructions and obtain the information required to authenticate access. To note: A new validation code will be required. This will either be a Patient Control Number (found at Form 03a locator on the UB-04 application form) or a Medical Record Number (found at Form 03b locator on the UB application form -04) for a traditional Medicare Part A Fee-for. -Service patient who received services from July 1, 2021 through September 30, 2021 (“from” or “to” dates on a paid claim). Additionally, as a second option, a Supplier Registration, Chain, and Ownership System (PECOS) contact will receive an email and receive a validation code to be used to access PEPPER from the portal. Validation code may be shared with others in the facility if deemed appropriate. SNFs that are mobile bed units of acute care hospitals will use the validation codes provided to the Access Roles and Profiles (HARP) security administrators of the healthcare quality information systems (HCQIS) to access their PEPPER from the PEPPER portal.
  3. Visit the PEPPER Resource Portal.
  4. Fill in all fields.
  5. Download your PEPPER.

Now we are ready to go!

To begin, let’s look at the reason behind the PEPPER reports.

Remember that the Payment Methods Evaluation Program Electronic Report (PEPPER) was designed in part to help guide FNS audit and oversight activities.

Why do you ask?

The Government Accountability Office has designated Medicare as a program at high risk for fraud, waste, and abuse.

Payments to skilled nursing facilities have been identified as vulnerable to abuse. In 2012, the Office of the Inspector General found that approximately 25% of SNF claims were billed in error.

The OIG encourages NFCs to develop and implement a compliance program to protect their operations against fraud and abuse. As of 2013, under the wording of “Section 6102” of the Affordable Care Act, NFCs are required to have a compliance program. As part of its compliance program, an SNF must perform regular audits to ensure that the services provided are necessary and that charges for Medicare services are properly documented and billed.

What is PEPPER?

National SNF claims data was analyzed to identify areas of the SNF Prospective Payment System (PPS) that may be at risk of incorrect Medicare payment.

These areas are called “target areas”.

PEPPER is a data report that contains the data statistics of single SNF Medicare claims (obtained from UB-04 claims submitted to the Medicare Administrative Contractor [MAC]) for these target areas.

All SNFs that have enough data to generate a report receive a PEPPER, which contains statistics for those target areas.

The report shows how an SNF’s data compares to aggregate jurisdictional, state, and national statistics. The statistics in PEPPER are presented in the form of tables and graphs that illustrate the percentages of the target area of ​​the SNF over time.

All PEPPER data tables, graphs and reports have been designed to help FNS identify potentially abusive payments

Who receives PEPPER?

PEPPER is available for SNFs. PEPPERs are also available for short and long-term acute care inpatient prospective payment system (IPPS) hospitals, critical access hospitals (CAH), inpatient psychiatric facilities, rehabilitation facilities for inpatients, hospices, partial hospitalization programs, and home health agencies (report format and target fields are customized for each type of provider).

What’s new in this year’s report?

PDPM has now been in use for nearly two years. The PEPPER team determined that the target area of ​​PDPM high usage codes was not associated with the highest paying PDPM codes.

In response, the PEPPER team removes this target area and replaces it with two new target areas:

  • High Target Area of ​​Physiotherapy and Occupational Therapy Case Combination
  • Target area of ​​high speech therapy case suit

Great, so what exactly does that mean?

PEPPER determines outliers based on predefined control limits. The upper control limit for all target areas is the national 80th percentile. Undercoding risk areas also have a lower control limit, which is the national 20th percentile.

PEPPER draws attention to any result that is equal to or greater than the upper control limit (high outliers) or equal to or less than the lower control limit (low outliers; for undercoding risk areas only) .

How are these areas defined and what are the suggested interventions?

High case mix in physical and occupational therapy (new as of Q4FY21 publication)

  • Definition: N: number of claims for reimbursement to the SNF where the first character of the HIPPS (Health Insurance Prospective Payment System) code, representing the physiotherapy and occupational therapy component, is one of the following: C, D, F, G, J, K, N or O; D: number of all SNF complaints
  • Suggested interventions if at/above the 80th percentile: this could indicate problems with MDS coding of patients’ functional score. The SNF should review the nursing and therapy documentation in the medical record to ensure the adequacy of the MDS coding, particularly with respect to the ten elements of section GG, which is used for the PT and OT component.
  • Suggested interventions if at or below the 20th percentile: This could indicate issues with insufficient medical documentation, which is necessary to accurately reflect patients’ functional scores. The SNF should review the accuracy or completeness of the medical record with nursing and therapy staff members, particularly with respect to the 10 elements of section GG, which is used for the PT and OT component.

High Speech Therapy Case Mix (new from Q4FY21 release)

  • Definition: N: number of SNF requests where the second character of the HIPPS code, representing the SLP component, is one of the following: C, F, I or L; D: number of all SNF complaints
  • Suggested interventions if at/above 80th percentile: This could indicate issues with the MDS coding of any of the five patient characteristics included in the SLP component: acute neurological condition, SLP-related comorbidity, cognitive impairment, swallowing or mechanically modified diet. The SNF should review the documentation to ensure that all patient characteristics comprising the speech therapy coded on the MDS are substantiated in the medical record.
  • Suggested interventions if at or below the 20th percentile: this could indicate issues related to insufficient medical documentation, which is necessary to accurately reflect one of the five patient characteristics included in the SLP component: acute neurological condition, comorbidity related to SLP, cognitive impairment, swallowing disorder, or mechanically modified diet. The SNF should review the accuracy or completeness of medical record documentation with nursing, therapy, and other staff to ensure that all patient characteristics associated with SLP components are correctly captured on the MDS.

In conclusion, when reviewing reports, trends and practices with your teams, also keep in mind the following key point: An SNF can use PEPPER to compare its claims data over time to identify areas potential concerns and identify changes in billing practices. However, PEPPER does not identify the presence of abusive payments.

It should be used as a guide for auditing and monitoring efforts, an opportunity to open conversations about trends across teams, and a way to assess clinical practice.

Renee KinderMS, CCC-SLP, RAC-CT, is Executive Vice President of Clinical Services for Broad River Rehabilitation and winner of the 2019 APEX Award of Excellence in the Writing Category – Departments and Regular Columns. Additionally, she is the Gerontology Professional Development Lead for the American Speech Language Hearing Association (ASHA) Gerontology Special Interest Group, is a community faculty member at the University of Kentucky College of Medicine, and is Advisor to the American Medical Association’s Current Procedural Terminology CPT. ® Editorial Board. She can be reached at [email protected]

The opinions expressed in McKnight Long Term Care News guest submissions are those of the author and not necessarily those of McKnight Long Term Care News or its editors.

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