WELCOME TO THE

CALIFORNIA ACDIS CHAPTER

PEPPER BASICS

Cheryl Ericson, MS, RN, CCDS, CDIPAssociate Director of Education, ACDIS

CDI Education Director, HCPro

cericson@hcpro.com

Hot Topics for Organizations

• Although there are many different government audits Program for Evaluating Payment Patterns Electronic Report (PEPPER) provides an organization with foresight into potential vulnerabilities that can result in denied claims and recoupment– The data is based on paid Medicare claims for a

particular organization

– Allows STAC version is a comparison across all paid MS-DRGs for a particular period of time

Hospital Vulnerability/Accountability

• An article in Healthcare Highlights quotes Asst. U.S. Attorney Robert Trusiak

– “If hospitals receive {PEPPER data} information that their billing is way out of line, the government expects them to act on it. . . When hospitals are outliers in a risk area, they are expected to audit medical records and find out if there’s a compliance problem or a reasonable explanation. . .”

• Failure to review PEPPER data can be interpreted as reckless disregard or deliberate ignorance in a False Claims Act case

Some Compliance Programs May Fail to Reduce the Risk of False Claims, Sept. 27, 2011; Wolters Kluwer Law & Businesses

What is PEPPER?

• A free resource released quarterly for short-term acute care hospitals through QualityNet

– Access is restricted to QualityNet

– Identify your facility’s administrator

• An annual version is available for other healthcare entities that may be direct mailed

– Long term acute care hospitals (LTAC)

– Critical access hospitals

– Inpatient psychiatric facilities

– Inpatient rehabilitation facilities 6

PEPPER Basics

• Provides a quarterly analysis of hospital-specific Medicare inpatient claims (MS-DRG) that are vulnerable to improper payment

– Potential overpayments

– Potential underpayments

• Official website for information, training and support

– http://www.pepperresources.org/

Definitions Page

• The MS-DRG target areas included in PEPPER are defined on this page and generally fall into one of two categories– Coding-focused

• MS-DRG assignment• CC/MCC capture rates

– Medical Necessity • Short stay (one or two days) admissions• Readmissions• Top one day stays medical DRGs• Top one day stays surgical DRGs

Our Focus is Coding Targets

• Reported as percentages (%)

– The numerator (top number) consists of those discharges prone to MS-DRG coding errors

– The denominator (bottom number) includes the numerator MS-DRGs as well as the MS-DRGs to which the claim is often reassigned

NumeratorDenominator

Target Area Definition

• Are cases being inaccurately assigned to the higher weighted respiratory infections (MS-DRG 177 & 178) compared to simple pneumonia (MS-DRG 193, 194, 195)?

MS-DRG 177 & 178

MS-DRG 177, 178, 179 & 193, 194, 195

PEPPER Interpretation

The percentage of cases and/or volume of cases within each target area are the basis for comparison across organizations within . . . 1.Medicare Administrative Contractor (MAC)2.The same state as the organization3.The United States

The value of these comparisons will vary with the type of organization •State comparison may not be as relevant to “flagship” organizations as community hospitals

Percentile by Comparison Group

Compare Page Data

• The volume of discharges for each target• The percent (%) of cases for each target

based on the target definition • How each target ranks by percentile in

comparison to other organizations– Jurisdiction, state and the Nation– A percentile is not the same as

“percentage” as it is a ranking value not on a scale of 0 to 100%

• Associated total value ($) of the paid claims (sum of payments)

Vulnerability

• Best practice is to review a sample of claims whenever the organization is a high outlier or when there is a sudden spike in the volume of cases within a particular target area– Verify the accuracy of DRG assignment

• Rebill overpayments whenever they are discovered

• Not limited to 60 days to rebill and overpayment

PEPPER Basics

• Identification of outliers– Comparison with other facilities in the U.S. with

paid MS-DRGs for the same time period

– Thresholds at the 80th and 20th percentile• High outliers are above the 80th percentile

– May result in overpayments

• Low outliers are below the 20th percentile– May result in underpayments

– May benefit from CDI implementation or refresh

Identifying Risk Areas at a Glance

High Outlier Ranking Report

Basic PEPPER Review for CDI

• A common metric of success for CDI departments is CC/MCC capture rate

• One of the basic reviews using PEPPER data is monitoring the trends associated with CC/MCC capture rates

• The measure of single CC or MCC can also be significant depending on the mission of the CDI department

– A high volume of cases with a single CC or MCC can impact mortality index and increase vulnerability to denials

Basic PEPPER Review for CDI

CC/MCC Capture for Medical DRGs

This is a positive trend and potentially shows the positive impact of a CDI department

CC/MCC Capture for Surgical DRGs

This is a “flat” or potentially negative trend, but is very low compared to the medical capture rate •Suggests opportunities for CDI

Evaluating Specific Targets

• A more in-depth review of PEPPER data from a CDI perspective would involve analysis within specific coding target areas

• If multiple high outliers the sum of payment column can be used to prioritize target areas based upon amount of money at risk of recoupment

Sum of Payments within a Target

Sum of Payments within a Target

• To prioritize cases focus on the cost per case at risk rather than the total dollars at risk– Both stroke and simple pneumonia are high

outliers the value of each is as follows• Stroke = $308,646/35 cases = $8,818 each

• Simple pneumonia = 224,829/29 = $7,753 each

Evaluating Specific Targets

• Can indicate opportunities of improvement

• Pneumonia can be the principal diagnosis in two different MS-DRGs

– Simple pneumonia cases can often be treated in the outpatient setting• A high volume of simple pneumonia cases is often a

documentation issue

• Pneumonia, unspecified (486) as the Pdx

Sum of Payments within a Target

Respiratory Infections

Simple Pneumonia

Evaluating Specific Targets

• Can indicate areas of vulnerabilities– Perform internal monitoring of the accuracy of coding

• Compare to volume of TIA cases

– Is the organization a destination for stoke patients?

Stroke Graph

Not Enough Cases to Graph

Summary

• PEPPER data can indicate possible opportunities or vulnerabilities

• CDI can demonstrate impact by influencing coding targets beyond CC/MCC capture

• Conduct internal audits to ensure coding/documentation accuracy when a high outlier and/or approaching high outlier status

– Ignorance is not a defense to false claims charges

Thank you. Questions?