Health Information Management

Healthcare News: CMS releases new short-term acute care PEPPER

JustCoding News: Inpatient, July 18, 2012

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In late May, CMS released nationwide a new short-term (ST) acute care Program for Evaluating Payment Patterns Electronic Report (PEPPER). The ST PEPPER provides short-term acute care hospital (STACH) statistical data for the most recent 12 federal fiscal quarters, ending with the first quarter of fiscal year 2012.

CMS contracted with TMF Health Quality Institute to develop and distribute the ST PEPPER. The report is distributed electronically through a My QualityNet secure file exchange to hospital QualityNet administrators and user accounts with the ST PEPPER recipient role.

Hospital-specific reporting

The report released to each hospital is hospital specific, focusing on inpatient discharges in 30 areas potentially at risk for improper Medicare payments. The data in each free report is presented in tabular form, as well as in graphs, that depict the hospital’s target area percentages over time. The data also includes reports on the hospital’s top medical and surgical MS-DRGs for one-day stays. All of the data tables, graphs, and reports in the ST PEPPER are designed to assist the hospital in identifying potential overpayments as well as potential underpayments.

Use of reporting data

The ST PEPPER will also permit a hospital to compare its Medicare billing practices with other hospitals
  • Within the same state
  • Within the same Medicare administrative contractor (MAC) or fiscal intermediary (FI) jurisdiction
  • Throughout the nation
These comparisons will enable a hospital to determine if it is an outlier, differing from other short-term acute care hospitals. The ST PEPPER determines outliers based on preset control limits. The upper control limit for all target areas is the 80th percentile. Coding-focused target areas also have a lower control limit, which is the 20th percentile. The report draws attention to any findings that are at or above the upper control limit or at or below the lower control limit.

Facilities can also use the risk areas identified in the ST PEPPER as a basis for current and future auditing and monitoring activities. Such activities comprise one of the seven components of an effective hospital compliance program, according to the Office of Inspector General (OIG).

Editor’s Note: For more information on the ST PEPPER, including specific target areas, check the following website: This news originally appeared in the Medicare Mentor blog.

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