PEPPER can identify areas where denials may occur
Report aims at reducing Medicare payment errors
If it’s not currently doing so, your case management department should make use of your Program for Evaluating Payment Patterns Electronic Report (PEPPER) to identify areas where you may be overcoding or undercoding, medical necessity of admissions is questionable, or readmissions are too frequent.
The PEPPER data alert hospitals to potential problems and can be used to determine the focus of internal audits or validation studies.
The information also may be helpful in evaluating the effectiveness of your clinical documentation improvement program, because the report identifies areas of potential overcoding and undercoding, explains Deborah Hale, CCS, president of Administrative Consultant Services Inc., a health care consulting firm in Shawnee, OK.
The report, issued quarterly through your state’s quality improvement organization (QIO), can guide your auditing and monitoring activities to reduce compliance risk in utilization and coding.
PEPPER contains data in 14 target areas that have been identified by the Centers for Medicare & Medicaid Services (CMS) as high risk for payment errors. (See box, below.)
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PEPPER Target Areas
Source: PEPPER User’s Guide, FY 2004. Texas Medical Foundation, Austin. |
The risk areas targeted in PEPPER were identified by CMS based on analysis of the review by QIOs of the National Payment Error Sample, says Robin Fletcher, RN, MPH, assistant director of health service assessment for the Texas Medical Foundation (TMF) in Austin, a QIO that developed PEPPER under contract with CMS.
Hospitals should use PEPPER to identify areas that look unusual compared to the rest of their state, Fletcher suggests. Then take the data one step further and drill down to see if it represents a problem, she adds.
Each hospital’s report contains hospital-specific Medicare claims data for the target areas, which include one-day stays, hospital readmissions, and DRGs that historically have been associated with payment errors.
The report shows the percentile in which your hospital falls in each target area and compares your rank to other acute care hospitals in your state, identifying areas that may be questionable in terms of medical necessity. The report includes data on both the high and low statistical outlier target areas for your hospital.
Worksheets included with PEPPER list each hospital’s top 20 DRGs for one-day stays for the current fiscal year along with the statewide top 20 DRGs for one-day stays.
"PEPPER gives hospitals a picture of their one-day stay rates in comparison to the rest of the acute care hospitals in their state and gives them a starting point for conducting a compliance audit," Hale says.
Higher values may indicate questionable medical necessity or coding errors. If a hospital’s scores are consistently low, that may indicate overutilization of observation status, she adds.
The DRG comparisons included in the report may indicate opportunities for improvement. If a hospital’s scores are consistently low, that may reflect undercoding or lack of clinical documentation to support accurate coding, Hale says.
If a hospital’s rates are at or above the 75th percentile, that may indicate coding errors or be a reflection of the effectiveness of their clinical documentation improvement programs, she points out.
Hospital-specific data are provided to all QIOs, which in turn may make it available to hospitals. The QIOs are not required to share the data with their hospitals, Fletcher says.
The data are intended to assist the QIOs in identifying and preventing payment errors, with an overall goal of reducing the Medicare payment error rate within each state and nationally.
Steps to take
Admissions with a length of stay of one day account for 38% of all admission denials from CMS. Stays of five or fewer days account for 89% of all denials, according to the PEPPER User’s Guide published by the TMF.
PEPPER is available in spreadsheet form and contains data for the most recent full fiscal years and the current fiscal year to date. The data are updated quarterly.
The first step case managers should take is to find out who in their hospital has access to the PEPPER data. Typically, it is the person in your hospital who has been appointed to receive official communications from your state’s QIO. In many states, the QIO makes the information available on the QualityNet Exchange, the electronic communication tool for the CMS core measures.
Your hospital’s Q-Net administrator should be able to give you a pass code that will allow you access to the data.
Some states may not yet have it available on the QualityNet Exchange but may have sent a hard copy to your hospital’s QualityNet administrator or QIO contact person, Hale says. "Most QIOs don’t make the PEPPER data available indefinitely. It’s on-line for a short period of time."
Case managers should review their hospital’s PEPPER data on a quarterly basis and study it to find out what is going on, suggests Teresa Fugate, RN, BBA, CPHQ, CCM, a manager with Pershing, Yoakley & Associates, a Knoxville, TN-based health care consulting firm.
When you get the report, look at where your hospital falls in terms of the 14 indicators. If your hospital falls in the 75th percentile or above, or below the 10th percentile, you’d be advised to look carefully at those categories to find out why.
If your hospital’s PEPPER data are in a high percentile, it doesn’t necessarily mean you won’t get paid or that you have errors, but it is highly suspect and should be evaluated further. It points to areas where you may have the greatest opportunity for improvement, Hale says.
Having admissions in the outlier range does increase your risk of review by your QIO, which could mean the hospital has to pay back money it has received because of noncompliance in reviewing cases prior to admission, Fugate adds.
Case managers should look to see where their hospital falls in the 14 categories monitored on PEPPER and use the data as a springboard for an internal audit if you fall below the 10th percentile or above the 75th percentile, Hale advises.
For instance, a high number of short stays may imply that the admission wasn’t necessary or the patient should have been treated on an outpatient basis. If certain DRGs fall in the 75th percentile or above or the 10th percentile or below, it may be an indication that your hospital isn’t using observation status appropriately.
Look at which DRGs are generating the most one-day stays and why, and determine whether you need to examine them further. Your data may be correct for your particular circumstances, Hale says.
For instance, if your hospital performs a large number of coronary stents, you’re likely to have a higher rate of one-day stays because these generally are done in the inpatient setting for Medicare patients.
Look beyond the percentiles in which your hospital falls and examine the number of cases that fall into the outlier categories, Hale says.
"If there are just a few cases, that doesn’t raise as much concern as something that involves a high volume of cases," she says.
If your hospital is reporting an unusual number of readmissions on the same day, take a look to make sure that the discharge status code is correctly documented on the claim and the skilled nursing care or rehabilitation admission was reported with the correct bill type. You may be discharging the patient to a skilled bed in your facility and generating two DRGs on the same day because of incorrect bill types and provider numbers reported on the UB-92.
If your hospital has more seven-day readmissions than the rest of the state, look at whether the patient was provided incomplete care during the first admission and readmission was needed to provide services that should have been provided during the first stay, Hale advises.
Outlier status could be caused by an incorrect DRG assignment or overutilization of observation status, she points out.
If your hospital falls below the median level, particularly if you are in the 10th percentile or below, you may be overutilizing observation status. "Hospitals must not get the idea that they cannot have a one-day stay," Hale says.
Use your hospital’s PEPPER data as a starting point to work with the emergency department staff and educate them on appropriate status, Fugate suggests. Include the nursing staff and the house supervisor in addition to the physicians, she adds.
"Appropriate status is not just a case management responsibility. Hospitals should develop a team approach to ensure that patient care and status assignment is a coordinated effort among all disciplines and not just something that happens reactively," Fugate says.
If a particular DRG falls into an outlier status for inappropriate admissions, look at which physicians treat the majority of these patients and discuss the problem with them. Share the data with the emergency department staff and educate them on the appropriate assignment of patient status.
The TMF offers a free on-line training session on the use of PEPPER. The two-hour session includes a discussion of the 14 target areas, how to navigate in PEPPER, and how to use the COMPARE Worksheet, as well as data tables and graphs in PEPPER to examine your hospital’s data and determine if problems exist.
For more information, go to the TMF web site at www.tmf.org.
If its not currently doing so, your case management department should make use of your Program for Evaluating Payment Patterns Electronic Report (PEPPER) to identify areas where you may be overcoding or undercoding, medical necessity of admissions is questionable, or readmissions are too frequent.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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