PEPPER – A Tool with a Wealth of Information

PEPPER or the Program for Evaluating Payment Patterns Electronic Report is a relatively new term to the home health agency market.  A PEPPER summarizes provider-specific Medicare data statistics for different target areas determined by the Centers for Medicare and Medicaid Services (CMS).  These target areas are often associated with improper Medicare payments due to billing, DRG coding and/or necessity issues.  The first PEPPER came out in 2003, but since then others have followed, providing data on many different types of healthcare providers:

  • Short and long term acute care hospitals,
  • Critical access hospitals,
  • Inpatient psychiatric facilities,
  • Inpatient rehabilitation facilities,
  • Hospices,
  • Partial hospitalization programs,
  • Skilled nursing facilities, and
  • Home health agencies

Today we are focusing on the PEPPER for home health agencies (HHAs).  The HHA version was launched in July 2015, making it the newest addition to the PEPPER family.

The HHA PEPPER summarizes a home health agency’s Medicare claims data statics and compares them against aggregate Medicare data for other HHAs in three different groups – the nation, the MAC jurisdiction and in the state.  These comparisons can help to determine areas where your agency may be at a higher risk for improper Medicare payments due to billing procedures that vary with the majority of other HHAs in the comparison group.  The PEPPER should be considered an educational tool that helps you to be more proactive.  It can help to guide auditing and monitoring activities, and preventative or corrective measures can be implemented before issues such as fraud and abuse escalate.

Statistics Used in PEPPER

The HHA PEPPER is calculated per traditional Medicare fee-for-service claims as identified from the UB-04 claims submitted for reimbursement to the MAC.  These claims are based on the following criteria:

  • Either Part A or Part B Medicare claim,
  • HHA final claim,
  • Services provided during the 12 month period,
  • Must be greater than zero dollars, and
  • Medicare secondary payer claim greater than zero dollars

The claims in your PEPPER are organized into three 12 month periods based on the calendar year in which the home health agency episode ends.  In order for your PEPPER to include the state percentiles there must be greater than 11 agencies in your state that have reportable data for the targeted area and time period.

A Summary of Claims Data

Remember that a PEPPER is a report that summarizes claims data for target areas.  These target areas are evaluated annually and can be adjusted accordingly.  A new PEPPER is scheduled to be released any day now.  However, below are the target areas presently being used:

  • Average case mix
  • Average number of episodes
  • Episodes with five or six visits
  • Non-LUPA payments
  • High therapy utilization episodes
  • Outlier payments

The PEPPER can serve as a benchmark and help you to identify where your data differs.  This variance can be an indicator of potential issues such as fraud and abuse as stated previously.
Also remember in the PEPPER you will see percentiles calculated for the three comparison groups mentioned earlier, the nation, the MAC jurisdiction and the state.  If your agency is at or above the national 80th percentile then you will be identified as an outlier and displayed in bold red print.  The outlier status is based on the national comparison group.

Be Sure to Access PEPPER

According to recent stats only 26% of home health agencies have accessed PEPPER.  You may consider it just a summary of data, but it really provides much, much more.  This valuable tool can help you to be more proactive in combatting possible issues and determine where your agency stands against other HHAs not only in your state, but across the nation.  Access it at to ensure your agency is in compliance today.

Southern Web SupportPEPPER – A Tool with a Wealth of Information
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