Using the Inpatient Rehabilitation Facility (IRF) PEPPER to Support Auditing and Monitoring Efforts: Session 1

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Using the Inpatient Rehabilitation

Facility (IRF) PEPPER to Support

Auditing and Monitoring Efforts:

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Agenda

Session 1:

– History and basics of PEPPER – IRF PEPPER target areas

– Percents and percentiles – Comparison groups

Session 2: PEPPER Demonstration Session 3:

– How to use and obtain PEPPER – Helpful resources

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Objective:

To help you understand PEPPER so that you

can use this tool, provided at no cost by the Centers for Medicare & Medicaid Services (CMS), to support auditing and monitoring efforts with the goal of ensuring compliance with Medicare regulations and preventing improper Medicare payments.

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What is PEPPER?

Program for Evaluating Payment Patterns Electronic

Report (PEPPER) summarizes Medicare claims data statistics for one IRF in areas (“target areas”) that may be at risk for improper Medicare payments.

PEPPER compares an IRF’s Medicare claims data

statistics with aggregate Medicare data for the nation, MAC jurisdiction and state.

PEPPER cannot identify improper Medicare payments!

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What is PEPPER?

PEPPER was originally developed in 2003 for

short-term acute care PPS hospitals; it was made available through the Quality Improvement Organizations in support of efforts to identify and prevent improper Medicare payments through 2008.

PEPPER is also available for long-term (LT) acute care

PPS hospitals, critical access hospitals (CAHs), inpatient psychiatric facilities (IPFs), inpatient rehabilitation

facilities (IRFs), partial hospitalization programs (PHPs), hospices, skilled nursing facilities (SNFs) and in 2015 for home health agencies (HHAs).

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Why are IRFs Receiving PEPPER?

CMS is tasked with protecting the Medicare

Trust Fund from fraud, waste and abuse.

The provision of PEPPER supports CMS’

program integrity activities.

PEPPER is an educational tool that is intended

to help providers assess their risk for improper Medicare payments.

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PEPPER Summarizes Medicare Data

Paid inpatient Medicare claims

– Inpatient rehabilitation facility or distinct part unit

– Claim facility type = hospital

– Inpatient part A claim

– Claim has a valid medical record number

– Medicare claim payment amount > $0

– Final action claim

– Exclude HMO claims

– Exclude canceled claims

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PEPPER Data

Organized in three 12-month time periods

based on federal fiscal year (FY).

Q4FY14 release contains statistics for

discharges at the IRF that end between Oct. 1, 2011 through Sept. 30, 2014 (fiscal years

2012, 2013 and 2014). 8

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PEPPER Data Restriction

Due to CMS data restrictions,

the PEPPER will not display statistics when the numerator or denominator count is less than 11 for a target area in any time period.

– Some providers may not see any data for some target areas or time periods.

– A few providers will not have a PEPPER available.

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IRF Improper Payment Risks

PEPPER does not identify improper payments.

IRFs are reimbursed through the IRF prospective payment

system (PPS).

IRFs can be at risk for improper Medicare payments due to

coding errors or unnecessary admissions.

IRF PEPPER target areas were identified based on a review

of the IRF PPS, coordination with CMS IRF subject matter experts and analysis of national claims data.

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Target Area

Area identified as potentially at risk for improper

payments

Focused on admission necessity or coding issues Constructed as a ratio:

– Numerator = discharges identified as potentially problematic (likely to be miscoded or admitted unnecessarily)

– Denominator = larger reference group that contains

the numerator

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IRF PEPPER Target Areas

Target Area Target Area Definition

Miscellaneous

CMGs N: count of discharges for Case-Mix Groups (CMGs) 2001 (Miscellaneous M>49.15), 2002 (Miscellaneous M>38.75 and M<49.15), 2003 (Miscellaneous M>27.85 and M<38.75) or 2004 (Miscellaneous M<27.85)

D: count of all discharges

CMGs at Risk for

Unnecessary Admissions

N: count of discharges with no tier group assignment for

CMGs 0101 (Stroke M>51.05), 0501 (Non-traumatic Spinal Cord Injury M>51.35), 0601 (Neurological M>47.75), 0801 (Replacement of Lower Extremity Joint M>49.55), 0802 (Replacement of Lower Extremity Joint M>37.05 and

M<49.55), 0901 (Other Orthopedic M>44.75), 1401 (Cardiac M>48.85), or 1501 (Pulmonary M>49.25)

D: count of all discharges

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IRF PEPPER Target Areas, 2

Target Area Target Area Definition

Outlier

Payments N: count of discharges with an outlier approved amount greater than $0

D: count of all discharges

STACH

Admissions following IRF Discharge

N: count of beneficiaries discharged from the IRF during the

12-month time period that were admitted to a short-term acute care hospital within 30 days of discharge from the IRF; excluding beneficiaries that were transferred to a STACH, LTCH or IRF within one day of discharge as evidenced by a subsequent claim; excluding patient discharge status codes 07 (left against medical advice), 20 (expired)

D: count of all discharges excluding beneficiaries that were

transferred to a STACH, LTCH or IRF within one day of discharge as evidenced by a subsequent claim; and

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Three Basic Statistics

Count of discharges (numerator and

denominator)

Payments (sum and average)

Average length of stay

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Percents and Percentiles

Percents and percentiles are at the heart of

PEPPER.

It is easy to confuse these terms.

The following slides clarify the definitions

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Target Area Statistics

Numerator – number of target area

discharges; will not display if <11

Denominator – number of all denominator

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Target Area Percents

Target area percents are calculated by dividing

the number of target discharges by the

number of denominator discharges for each provider for each time period, then

multiplying by 100.

Example: Miscellaneous CMGs

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Percentiles

The target area percent lets the IRF know its

billing patterns.

More useful information comes from knowing

how it compares to other IRFs, which is why we calculate percentiles.

Definition of a percentile:

– The percentage of IRFs with a lower target area

percent

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Percentiles, cont.

To calculate percentiles for all IRFs in a

comparison group (nation, jurisdiction or state), the target area percents are sorted

from largest to smallest for each time period.

Example:

– If 40% of the IRFs’ target area percents were lower

than IRF A, then IRF A would be at the 40th

percentile.

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Percentile Calculation Example

The top two IRFs’

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About the MAC Jurisdiction

The MAC jurisdiction in PEPPER closely

corresponds to current CMS MAC jurisdictions (see next slide).

These jurisdictions have evolved as the

transition from legacy Part A FIs to the MACs completed and as MACs consolidate.

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MAC Jurisdictions

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Review: How does PEPPER

identify Providers at Risk?

A provider’s target area percent is compared to other

providers’ percents in the nation, MAC jurisdiction and state.

If the provider’s target area percent is at/above the

national 80th percentile it is identified as at risk for

improper Medicare payments.

Compare and Target Area reports:

Red bold print – at or above the national 80th percentile

for the target area.

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Top CMGs Report

Lists the IRF’s top CMGs by number of

discharges that end in the most recent fiscal year.

Includes number of discharges for the CMG,

the proportion of discharges for the CMG to total discharges and the ALOS for the CMG.

Supplemental report; has no impact on

outlier status or risk for improper payments.

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Jurisdiction Top CMGs Report

Lists the top CMGs by number of discharges in

the most recent fiscal year for all IRFs in the MAC jurisdiction.

Include same data elements as the

IRF-specific report, as well as the jurisdiction and national ALOS for the top CMGs

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References

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