Hospice Billing Compliance: Review Your PEPPER Data

The Program for Evaluating Payment Patterns Electronic Report, or PEPPER, is a valuable tool that helps identify billing danger spots within your hospice organization. It provides essential Medicare data statistics for discharges and services for hospice patients.

As Carrie Cooley, RN, MSN, emphasized in her recent webinar jointly presented by Relias and Wetherbee Resources:

“Around 2013 or 2014, hospices really started to understand more about the PEPPER report and how valuable the information contained in it is to mitigate payment-related risk.”

She echoed the importance of having confidence in reading the PEPPER and knowing what to do with the data to identify problem areas within your hospice organization.

This article reveals why reviewing your institution’s PEPPER data is so important, how it can highlight fixable areas where improper billing may be occurring, and how you can use it as part of your organization’s internal compliance program.

What Is the PEPPER?

The Centers for Medicare and Medicaid Services (CMS) contracted the TMF Quality Institute to create PEPPER in 2012. The goal was to collect and distribute PEPPER data for individual hospice organizations to use and audit their facilities. In essence, it is an educational tool for providers to proactively prevent improper payments.

The TMF Quality Institute collects, compiles, and distributes the PEPPER data every year in April. CMS expects providers to retrieve their PEPPER and take action if needed to protect them from hospice fraud, waste, and abuse.

What Information Does a PEPPER Contain?

The PEPPER contains each hospice organization’s paid Medicare claims for the three most recent fiscal years. Hospices are analyzed by how they compare within the following three groups:

  • State
  • National
  • Jurisdiction/Medicare Administrative Contractor (MAC)

Percent and Percentile Reporting

There are two main terms to understand on your PEPPER: The target area percent and percentile data. Hospices can use these terms to understand their facility’s data and compare how they perform against other hospices.

The target area percent refers to the provider’s actual provision of services and billing data.

The percentile data shows how a hospice provider compares to other hospital providers in the three comparison groups mentioned above: national, jurisdictional (MAC), and state.

Significance of 80th Percentile

You do not want your facility to be above the 80% target area percentile. This means you are at high risk for receiving improper payment. In addition, CMS conducts audits using the data.

Here is another way to look at this: If your hospice’s target area score is at the 82nd percentile nationally, 82% of hospices in the U.S. have a better score than yours.

PEPPER Target Areas

Target areas are data categories that Medicare officials identify as putting hospices at the most significant risk for improper payment. Some of these include:

  • Live discharges where the patient is not terminally ill or for revocation
  • Claims with a single diagnosis code
  • A long length of stay
  • Continuous home care provided for in an assisted living facility
  • Routine home care provided for in an assisted living facility
  • Average Medicare Part D claims per hospice episode (new in 2020)

Having a high percentage in these target areas may indicate an increased risk of improper billing. For example, in cases where the patient has a long length of stay, it may suggest that patients are being enrolled in hospice Medicare benefits when they have not met the criteria.

Make a PEPPER Plan

Cooley encourages hospices to craft a “PEPPER plan” to improve procedures and the resulting data. To start, you can form a PEPPER review and analysis committee that includes:

  • Executive leadership team members (CFO, CEO, CNO)
  • Sales and marketing directors
  • Governing board members
  • Outside experts, if needed

Your first goal will be to focus on target areas above the 80th percentile. But don’t forget to analyze trends to make sure you stay out of the red in the future.

PEPPER Review and Analysis Process

Your hospice must look beyond the red areas that signify outlying target areas. Even if you are below the 80-percentile group for target areas, you should still examine your results in detail. Your PEPPER is the most comprehensive tool available to review and analyze payment-related risk data.

What to review on your PEPPER:

  • Definitions used on the report (they are updated every year)
  • Each of the 12 Target Area Reports
    • What are your target areas percent and target count?
    • Are you trending up or down?
    • How do you compare your data on the state, jurisdictional, and national level?
  • Top terminal diagnoses and jurisdictional comparative data
  • Hospice live discharge by type and comparative jurisdictional data
  • Observations you can use to improve your data.

Your PEPPER might appear overwhelming at first, but there are steps you can take to help you analyze your data. Start by clearly identifying all of your hospice’s problem areas and rank them in terms of organizational risk. Consider prioritizing high volume and high-dollar areas.

Then create your individualized PEPPER plan:

  • Make a list of actionable items and interventions for each one.
  • Decide who will be responsible for follow-through on each intervention.
  • Establish due dates for completion of interventions.
  • Decide what determines a successful intervention.
  • Determine how you will continually monitor and audit results.

PEPPER Success Story

Officials at Norton Healthcare, a hospital system in Kentucky, used their PEPPER to help identify documentation discrepancies for pulmonary diagnoses in their facility. Their PEPPER data showed an inconsistency between their pulmonary diagnoses and the actual health of that patient population. They created a PEPPER plan to help identify underpayments and other areas for improvement.

Dee Banet, RN, MSN, CCDS, CDIP, Director of Clinical Documentation Improvement (CDI) at Norton hospital system, said PEPPER data alerted them to the issue. She explained that they used a post-process improvement plan to track and monitor progress and that they saw quick improvement, as the data better reflected Norton’s patient population. Banet applauded the beneficial insights the free data can provide.

Final Key PEPPER Points

The PEPPER helps hospices determine priority areas for auditing to prevent incorrect billing issues. Each hospice is responsible for retrieving its PEPPER online.

Though facilities benefit from and are required to receive their reports, so far in 2021, the national PEPPER retrieval rate is only 55%.

There are two issues with either not retrieving or remedying negative information on your report. Since the data is available, hospice officials cannot say they didn’t have access to the information.

In addition, by failing to act and fix your PEPPER data, “the government can say you showed blatant disregard,” Cooley states.

By failing to review and analyze your PEPPER data, you may be putting your facility at risk in numerous ways and missing out on opportunities to improve your financial standing.

Sarah Jividen

Sarah Jividen, RN, BSN, is a trained neuro/trauma and emergency room nurse turned freelance healthcare writer. As a journalism major, she combined her love for writing with her passion for high-level patient care. Jividen is the creator of Health Writing Solutions, LLC, specializing in writing about healthcare topics, including health journalism, education, and evidence-based health and wellness trends. She lives in Northern California with her husband and two children.

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