PEPPER Frequently Asked Questions

What are hospitals expected to do with these reports?
What benefits will hospitals obtain from using PEPPER?
With which hospital staff members should this report be shared?
Does the PEPPER report include a list of the outlier cases?
What does the term "outlier" mean?
What does the term "outlier value" mean?
How did CMS compare hospitals?
How should I interpret this data?
What should hospitals look for in the "Top 20 DRGs for One-Day Stay Discharges in FY 2003"?
With what frequency does CMS plan to release the next PEPPER reports?
Will CMS change the target areas in the future?
What software applications does the hospital need to have to be able to access the electronic PEPPER format?
Has IPRO offered trainings on how to make use of the electronic PEPPER format?

What are hospitals expected to do with these reports?

Hospitals should perform internal monitoring and audits in the target areas that are at or above the 75th percentile, or at or under the 10th percentile. The volume of cases that exceed these percentiles should first be considered prior to initiating this process and using the interventions suggested in the PEPPER User's Guide (see pages 6 to 9) for the specific target area, as a reference.

What benefits will hospitals obtain from using PEPPER?

It will assist hospitals in identifying potential payment error areas and initiating corrective measures. It can serve as a guide to the auditing and monitoring efforts required as part of the hospital's compliance program. It provides specific hospital statistics with respect to the 14 target areas that were selected by CMS. It also provides tables and graphs for easy and fast interpretation. In addition, it provides a list that identifies the hospital's top 20 One-day stay DRGs, which may be associated with possible unnecessary admissions, errors in billing, and/or process or systems that may be in need of revision or correction. As an additional benefit, hospitals may use these reports to make presentations in their administrative meetings and educational activities.

With which hospital staff members should this report be shared?

With the Compliance Officer, the Utilization Program Manager, the Billing Director, the Medical Staff, and the Health Information Administrator, among others.

Does the PEPPER report include a list of the outlier cases?

No, the report only includes aggregated claims data paid by Medicare to your hospital.

What does the term "outlier" mean?

The term refers to the findings that are at or above the 75th percentile at the National level (percent identified in red), or at or below the 10th percentile at the National level (percent identified in green) for any given target area. It does not refer to the DRG Cost Outlier.

What does the term "outlier value" mean?

For example, if the value of the 75th percentile is 1.7%, this means that 75% of the hospitals in the state have a value less than 1.7%, and the other 25% of the hospitals have a percentage greater than or equal to 1.7%.

How did CMS compare hospitals?

Comparisons were made on a statewide basis according to the claims billed in the 14 target areas established by CMS; not by type of facility (nor by peer grouping, etc).

How should I interpret this data?

First, you should look in the table "Compare Targets Report of Quarter x FY 20xx Data" (the "Compare" tab at the bottom of the window) for the target areas in which the hospital exceeded the 75th percentile. This percent appears identified in red.
You should then look at the corresponding tables of the target area(s) (using the tabs at the bottom the window) for each target area identified in red for your hospital.
The first table presented displays information about the target area for your hospital for each fiscal year.
You can also find the "Statewide Comparative Data for Target Proportion" table on this worksheet with the statewide 75th percentile (identified in red) for each fiscal year, in addition to the 90th and 10th percentiles (identified in green), and the mediam. In this table you can compare the statewide percentile with hospital's percent (Percent -Target area count/denominator).
At the right side of the table you will find "Summary change from FY 2001 to FY 2004". Here you can find the percent of change between your hospital and the statewide mediam. If the result is negative, this means that the number of discharges decreased from one fiscal year to the next. If the result is positive it means that the number of discharges increased from one fiscal year to the next.
Look for the graph of the target area (the next tab). Identify the line that represents your hospital and compare it with the lines of the 75th, 90th, and 10th percentiles in each fiscal year. You can observe how your hospital relates to the rest of the hospitals in NY in the target area.

What should hospitals look for in the "Top 20 DRGs for One-Day Stay Discharges in Quarter x FY 20xx"?

Hospitals should look for the DRGs with the greatest volume of billed cases with a one-day stay (One Day Stay Count) and its proportion with respect to the total amount of discharges of that DRG. If there is a high volume of cases, a sample should be selected for a review of the medical record to determine whether the admission was medically necessary and whether the procedure or treatment was performed in the appropriate setting (i.e., should have been performed and billed in the Ambulatory Setting or Ambulatory Setting with Observation Services).

With what frequency does CMS plan to release the next PEPPER reports?

Every three months. Click here for the schedule of data distributions for NY hospitals. These dates are subject to change.

Will CMS change the target areas in the future?

CMS may change the target areas based on information/ feedback provided by the QIOs and the results of the Payment Error Cause Analysis in the hospitals under the Prospective Payment System (PPS).

What software applications does the hospital need to have to be able to access the electronic PEPPER format?

The software application the hospital needs to be able to open PEPPER that was sent through QualityNet Exchange is Microsoft Excel. It allows the user to manage, that is, modify the cells according to the needs of the user to create their own reports. Otherwise, the user will not be able to see the file that is sent. It is possible that the user may have some other spreadsheet application with which the user may access the electronic format. However, this will depend on the application installed in the user's computer.

Figure A represents one of the tables that can appear in your computer or file. In this case, the report model is "Compare Targets Report of FY 2003 Data". The screen shows the tabs, which identify the indicator or target areas under focus.

Figure B shows one of the included reports. In this case, the report is "One-Day Stay Including Transfers, % of All Discharges".

Figure C shows that the program or file may include graphs, which are subject to the reference data included in the report.

Has IPRO offered trainings on how to make use of the electronic PEPPER format?

Yes, IPRO has provided the following WebEx trainings (conference calls with computer-depicted powerpoint presentations):

January 2005 PEPPER in Detail / DRG 416 In Depth - View Presentation Slides, View WebEx presentation
February 2004 PEPPER General Training and Overview - View WebEx presentation

IPRO will continue to provide trainings on the use of PEPPER and specific topics of interest regarding hospital monitoring and auditing activities. Check our Web site and your e-mail inbox for upcoming events.

These FAQs have been modified from original works created by QIPRO. Used with permission.