Are You Ready for the SNF PEPPER?

Are You Ready for the
SNF PEPPER
Presented by:
Elisa Bovee Vice President of Operations
Harmony Healthcare International,
(HHI)
Copyright © 2014 All Rights Reserved 1Harmony Healthcare International, Inc.

Copyright © 2014 All Rights Reserved Harmony Healthcare International, Inc.
About Elisa
Elisa Bovee, MS OTR/L
Elisa Bovee is the Vice President of Operations at
Harmony Healthcare International, (HHI)
an industry leader in Long Term Care consulting.
Over 20 years of experience in the long-term care
industry
Appeals Coordinator for a National nursing
home company
Follow Me! @ElisaBovee
2

Objectives
The learner will be able to:
State three variables contributing to initiation
of the PEPPER in the long-term care setting
State the Pepper Target Areas.
Describe CMS Comparative Data
Copyright © 2014 All Rights Reserved Harmony Healthcare International, Inc. 3

SNF PEPPER
How PEPPER was born;
OIG Audits

Wall Street Journal, November 12, 2012
Thomas Burton, November 2012
“More intensive services were done than
actually performed”
“Patients could not benefit from it”
“Cutting fraud” Obama

Wall Street Journal
Sample 499 claims by 245 (stays)
nursing facilities
1 home reached a settlement agreement on
allegations of fraudulent billing for
“medically unnecessary” therapy
“More therapy during the period on which
bills were based”
“Look-Back Period”

OIG Report:
Claims in 2009
25% billed all claims in error 1.5 billion
26% claims not supported in the
medical record
542 million in over payment
“Majority” error “upcoded”*
Many Ultra High
* Original RUG was a higher paying RUG than the revised RUG

OIG Report:
Claims in 2009
20.30%
2.50%
2.10%
75.10%
Billing Errors
Issues found with skilled-nursing
facilities’ Medicare claims, based on
an outside review of 2009 data
Properly billed
Billed for a more
expensive treatment
than was provided
Billed for a less
expensive treatment
than was provided
Billed for a condition
not covered by
Medicare
Source: Department of Health and Human Services
Office of Inspector General

OIG Report:
Claims in 2009
Remaining, “downcoded”*
Did not meet Medicare coverage
requirements
47% claims, misreported information on
the MDS
“SNF’s commonly misreported
therapy”
* If the original RUG was a lower paying RUG than the revised RUG
Harmony Healthcare International, Inc. 9Copyright © 2014 All Rights Reserved

MedPac noted that the payment system
“encourages SNF’s to furnish therapy,
even when it is of little or no benefit”
20062008 SNF’s increasingly billed for
higher paying categories even though
beneficiary characteristics remained
largely unchanged
Harmony Healthcare International, Inc. 10
OIG Report:
Claims in 2009
Copyright © 2014 All Rights Reserved

3 RN Nurses reviewed the claims along
with the PT/OT/ST
Analysis
Upcoded
Downcoded
Both considered errors
OIG Report:
Claims in 2009

Paid $1.5 billion for these claims. This
represents 5.6 percent of the $26.9
billion paid to SNFs in 2009
See Table 1 for the percentage of SNF
claims that were in error and Appendix
D for the confidence intervals
OIG Report:
Claims in 2009

Table 1: Percentage of SNF Claims That
Were in Error - 2009
Type of Error Percentage of SNF Claims
Inaccurate RUGs 22.8%
Upcoded 20.3%
Downcoded 2.5%
Did Not Meet Coverage Requirements 2.1%
Total Error Rate 24.9%
Source: OIG analysis of medical record review results, 2012
OIG Report:
Claims in 2009

SNFs billed inaccurate RUGs in 23
percent of claims. Most of these claims
were upcoded; far fewer were
downcoded.
Claims with inaccurate RUGs
amounted to a net $1.2 billion in
inappropriate Medicare payments
OIG Report:
Claims in 2009

Notably, 20 percent of claims billed by
SNFs had higher paying RUGs than
were appropriate
In these cases, the SNFs upcoded the
RUGs on the claims. For approximately
half of these claims, SNFs billed for
Ultra High Therapy RUGs when they
should have billed for lower levels of
therapy or nontherapy RUGs
OIG Report:
Claims in 2009

For 57 percent of the upcoded claims,
SNFs reported providing more therapy
on the MDS than was indicated in the
medical record
OIG Report:
Claims in 2009

For a quarter of the upcoded claims,
reviewers determined that the amount
of therapy indicated in the beneficiaries’
medical records was not reasonable and
necessary
OIG Report:
Claims in 2009

For example, in one case, the SNF provided
the highest level of therapy to the
beneficiary even though the medical record
indicated that the physician refused to
sign the order for therapy
In another example, the SNF provided an
excessive amount of therapy to the
beneficiary given her condition
OIG Report:
Claims in 2009

In another example, the SNF report on the
MDS that speech therapy was provided
even though the record contained an
evaluation of the beneficiary concluding
that no speech therapy was needed and
that speech therapy had not been provided
OIG Report:
Claims in 2009

Two percent of SNF claims did not
meet Medicare coverage requirements
For some of these claims, beneficiaries
were not eligible for SNF care, either
because they did not need skilled nursing
or therapy on a daily basis or because there
were no physician orders for these services
OIG Report:
Claims in 2009

SNFs misreported information on the
MDS for 47 percent of claims.
SNFs reported inaccurate information,
which was not supported or consistent
with the medical record, on a least one
MDS item for 47 percent of claims
For 30 percent of claims, SNFs
misreported the amount of therapy that
the beneficiaries received or needed
OIG Report:
Claims in 2009

MDS Category
With Misreported Information
Percentage of Claims
Therapy (i.e., physical, occupational, speech) 30.3%
Special Care (e.g., intravenous medication, tracheostomy care) 16.8%
Activities of Daily Living (e.g., bed mobility, eating) 6.5%
Oral/Nutritional Status (e.g., parenteral feeding) 4.8%
Skin Conditions and Treatments (e.g., ulcers, wound dressings) 2.4%
Source: OIG analysis of medical record review results, 2012
Note: The rows do not sum to 47 percent because some claims had more than on problem
OIG Report:
Claims in 2009

In addition, reviewers found several
instances in which SNFs provided more
therapy during the look-back period
than they did during periods that did not
determine payment rates
Look Back Period

In one example, the SNF provided 90 to
110 minutes of therapy a day to the
beneficiary during the look-back
period; however, after that period, the
SNF provided only about half that
amount of therapy to the beneficiary
Therapy Minutes

In another example, the SNF provided
50 to 55 minutes of therapy a day to the
beneficiary during the look-back
period. It lowered the amount to 30 to
40 minutes a day during the rest of the
coverage period but then raised it back
to 50 to 55 minutes during the next
look- back period.
Therapy Minutes

misreported whether the beneficiaries
received special care. The inaccuracies
came primarily from one MDS item in this
category – intravenous medication. At
the time of our review, SNFs were allowed
to report intravenous medication if the
beneficiary received it in the hospital prior
to or during the SNF stay.
MDS

For these claims, the medical records
either did not indicate that intravenous
medication was provided during the
hospital or SNF stay or clearly
contradicted that these services were
provided
MDS

misreported the amount of assistance
beneficiaries needed with activities of
daily living (e.g., bed mobility,
transfers, eating, and toilet use)
SNFs also misreported MDS items
related to oral and nutritional status
and items related to skin conditions and
treatments
MDS

SNFs did not always report the correct
number of stage of skin ulcers or they
reported the presence of burns or open
lesions inaccurately. They also did not
always correctly report skin treatments,
such as surgical wound care or ulcer
care.
Skin

Increase and expand reviews of SNF
claims
CMS should instruct its contractors to
conduct more medical reviews of SNF
claims
OIG Recommendations

OIG Recommendations
Use its Fraud Prevention System to
Identify SNFs that are Billing for Higher
Paying RUGs
CMS should use its Fraud Prevention
System to identify and target these SNFs

Monitor Compliance with the New
Therapy Assessments
As of October 2011, SNFs must complete a
“change of therapy” assessment when the
amount of therapy provided no longer
reflects the RUG and an “end of therapy”
assessment when therapy is discontinued
for 3 days
OIG Recommendations

CMS should instruct its MACs and
RACs to closely monitor SNFs
utilization of these assessments through
analyses of claims data. Such analyses
will identify SNFs that are using the
assessments infrequently or not at all.
OIG Recommendations

Change the Current Method for
Determining How Much Therapy is
Needed to Ensure Appropriate
Payments
OIG Recommendations

CMS should instruct the MACs to
provide education to all SNFs, as well
as specific training to selected SNFs, to
improve the accuracy of their MDS
reporting
OIG Recommendations

Follow up on the SNFs That Billed in Error
In a separate memorandum, we will refer to
CMS for appropriate action the SNFs with
claims in our sample that had inaccurate RUGs
or that did not meet coverage requirements
OIG Recommendations

Appendix D: Sample Sizes, Point Estimates, and 95 Percent
Confidence Intervals for Estimates Presented in the Report
Characteristic Sample Size
Point
Estimate
95 Percent
Confidence
Interval
SNF claims in error in 2009 499 24.9% 19.9%-30.4%
SNF claims with inaccurate RUGs 499 22.8% 18.0%-28.2%
SNF claims with higher paying RUGs than were
appropriate (upcoded)
499 20.3% 15.6%-25.6%
Upcoded SNF claims that had an Ultra High RUG 101 48.2% 34.9%-61.7%
Upcoded SNF claims in which SNFs reported
providing more therapy on the MDS than was
indicated in the medical record
101 56.8% 42.8%-70.2%
Upcoded SNF claims in which reviewers determined
that the amount of therapy was not reasonable and
necessary
101 25.6% 14.6%-39.4%
SNF claims with lower paying RUGs than were
appropriate (downcoded)
499 2.5% 1.3%-4.5%
SNF claims that did not meet Medicare coverage
requirements
499 2.1% 0.7%-4.7%
Total inappropriate Medicare payments for SNF
claims
499 $1.5 billion $988 million-
$2.0 billion
Inappropriate Medicare payments in proportion to
total payments to SNFs in 2009
499 5.6% 3.7%-7.6%
Medicare payments for SNF claims with inaccurate
RUGs
499 $1.2 billion $736 million-
$1.6 billion
SNF claims that had inaccurate information on the
MDS
487 47.3% 41.2%-53.5%
Source: Office of Inspector General medical record review, 2012

What is Skilled Care?

Why is this material important?
Which team members should be aware
of the Medicare Skilled Care criteria?
How often will this criteria be relevant
to current beneficiaries and applicable
for denied claims?

Requires the skills of qualified technical or
professional health personnel such as
RN, LPN, PT, OT or SLP
Must be provided directly by or under the general
supervision of a licensed nurse or skilled rehab
personnel to assure the safety of the resident and to
achieve the medically desired result
“General supervision” requires initial direction and periodic
inspection of activity
Ordered by a physician
Services are needed and provided on a daily basis

The need for skilled care must be
justified and documented in the
medical record
Conditions may have prompted the
initial hospitalization, but also include
the conditions that arose during
recovery in the SNF

What is Skilled Care ?
Direct Skilled Nursing Services
Management and Evaluation of a Care
Plan
Observation and Assessment
Teaching and Training
Skilled Rehabilitation

Skilled Services Categories:
Inherent Complexity
Inherent Complexity – Direct skilled
nursing services including:
IV feeding
IV meds
Suctioning
Tracheostomy Care
Ventilator support
Ulcers

Inherent Complexity
Inherent Complexity
Tube feedings
Respiratory Therapy 7 days per week
Surgical wound or open lesions with treatments
Unstable clinically with diabetes with injections
Transfusions
Chemotherapy
Colostomy Care, early post op care

Skilled Observation and Assessment
Reasonable probability or possibility for
complication
Potential for further acute episodes
Identify and Evaluate the need for
modification of treatment
Evaluate initiation of additional medical
procedures
Skilled observation can be required until the
treatment regimen is essentially stabilized

Fever
Dehydration
Septicemia
Pneumonia
Nutritional Risk
Chemotherapy
Weight loss
Blood sugar control
Impaired cognition
Severe Mood and
Behavior conditions

Identify and outline daily skilled
nursing observations and assessments
Record DAILY each itemized area listed
on your outline

Neurological
Respiratory
Cardiac
Circulatory
Pain/Sensation
Nutritional
Gastrointestinal
Genitourinary
Musculoskeletal
Skin

A patient with arteriosclerotic heart disease
with congestive heart failure requires close
observation by skilled nursing personnel for
signs of decompensation, abnormal fluid
balance, or adverse effects resulting from
prescribed medication
Skilled observation is needed to determine when the
digitalis dosage should be reviewed or whether other
therapeutic measures should be considered, until the
patient’s treatment regimen is essentially stabilized

A patient has been hospitalized following a
heart attack. Following treatment but before
mobilization, he is transferred to the SNF.
Because it is unknown whether exertion will
exacerbate the heart disease, skilled observation is
reasonable and necessary as mobilization is initiated
and continued until the patient’s treatment regimen
is essentially stabilized

A frail 85-year-old man was hospitalized for
pneumonia. The infection resolved, but the
patient, who had previously maintained
adequate nutrition, will not eat or eats poorly.
The patient is transferred to a SNF for monitoring of fluid
and nutrient intake and the assessment of the need for tube
feeding and assisted feeding if required. Observation and
monitoring by skilled nursing personnel of the patient’s
oral intake is required to prevent dehydration.

A patient left the acute hospital on a high
dosage of Coumadin with daily clotting
time studies
Assessment and observation is needed until a
maintenance dosage is attained and the
patient/resident shows no adverse symptoms.
Regulation is an integral part of this
patient/resident’s coverage. Ongoing observation
and assessment, notifying the physician and
multiple changes in the plan of care, are also
skilled in nature.

If a patient was admitted for skilled
observation but did not develop a further
acute episode or complication, the skilled
observation services still are covered so long
as there was reasonable probability for such a
complication or further acute episode
“Reasonable probability” means that a potential
complication or further acute episode is a likely
possibility

Management and Evaluation of a Care Plan
Based on the Physician’s orders, these
services require the involvement of
skilled nursing to meet the resident’s
Medical needs
Promote recovery
Ensure medical safety

This area includes
The sum total of unskilled services
Potential for serious complications
High probability of relapse
Recovery and safety
Meet medical needs
Includes resident’s overall condition

Topic Areas to include:
Surgical sites
Circulatory status
Status of fractures
Maintenance of weight-bearing status
Skin Care
Labs
Consultant Recommendations

Although any of the required services could be
performed by a properly instructed person, that person
would not have the capability to understand the
relationship among the services and their effect on each
other. Since the nature of the patient’s condition, his
age and his immobility create a high potential for
serious complications, such an understanding is
essential to assure the patient’s recovery and safety. The
management of this plan of care requires skilled nursing
personnel until the patient’s treatment regimen is
essentially stabilized, even though the individual services
involved are supportive in nature and not require skilled
nursing personnel.

Example: An aged patient is recovering from
pneumonia, is lethargic, is disoriented, has residual
chest congestion, is confined to bed as a result of his
debilitated condition, and requires restraints at times
To decrease the chest congestion, the physician has
prescribed frequent changes in position, coughing
and deep breathing. While the residual chest
congestion alone would not represent a high risk
factor, the patient’s immobility and confusion
represent complicating factors when coupled with
the chest congestion, could create high probability
of a relapse.

Teaching and Training: Activities
which require skilled nursing or skilled
rehabilitation personnel to teach a
patient and/or family member how to
manage the patient’s treatment regimen

Colostomy care
Insulin administration
Prosthesis management
Catheter care
G-tube feedings
IV access sites
Braces, splints and
orthotics
Wound dressings and
skin treatments
Medication
Management
Orthopedic Precautions

61
Skilled Rehabilitation
Medicare Benefit Policy Manual
On a daily basis
Services rendered are reasonable and
necessary
MD ordered
Practical matter
An appropriately licensed or certified
individual must provide or directly supervise
the therapeutic service and coordinate the
intervention with nursing services
Harmony Healthcare International, Inc.

62
Skilled Rehabilitation/
MD Involvement
The service must be ordered by a physician.
The therapy intervention must relate directly
and specifically to an active written treatment
regimen established by the physician after
any needed consultation with the qualified
rehabilitation therapy professional and must
be reasonable and necessary to the treatment
of the beneficiary’s illness or injury necessary
to the treatment of the beneficiary’s illness or
injury
Harmony Healthcare International, Inc.Copyright © 2014 All Rights Reserved

63
Skilled Rehabilitation/
MD Involvement
MD involvement to prevent injuries
Medicare allows the professional
therapist to develop a suggested plan of
treatment and to begin providing
services based on the plan prior to MD
signature
MD signature required before facility
bills Medicare
MD Faxed signatures acceptable

64
Skilled Rehabilitation Overview
Directly related to a written plan of
treatment
Requires knowledge/skills/judgment of
qualified professional
Services must be considered under
acceptable standards clinical practice
Expectation of improvement of restorative
potential in a reasonable and predictable
period of time….or….
Establishment of a safe and effective
maintenance program
Harmony Healthcare International, Inc.

65
Basic Criteria for Rehabilitation
Services
Must be specifically related to the Physician’s
Treatment Plan
Skill of a qualified therapist must be needed
Treatment plan must expect the patient to
improve
Services must fall within accepted standards
of medical practice and be specific to the
patient
The services must be reasonable and
necessary

PEPPER
Program for Evaluating Payment
Patterns Electronic Report

PEPPER
Compares SNFs to other SNFs nationally
2013 Report was received via mail on or
about August 30, 2013
Envelope with red print on the outside
containing your facility specific PEPPER
Perceived as Junk mail

Outliers and the Evolution of PEPPER
CMS sees high Medicare expenses as
suggestive of over coding
CMS asserts 20% highest expenses are
questionable
CMS identifies expenses above the 80th
percentile as outliers
CMS asserts that the Bottom 20% of outliers
are under coding
The bottom 20th percentile as outliers could be
perceived as evidence of poor Quality of Care

PEPPER Data
Compare Targets Report
Target Area Reports
SNF Top RUGs Reports
Jurisdiction-wide Top RUGs Reports

PEPPER Data
PEPPER is a Microsoft Excel workbook
that can be opened and saved to a PC
Per TMF; the report is not intended for
use on a network but may be saved to
as many PCs as necessary

Where is My PEPPER?
From TMF Health Quality Institute
PEPPERResources.org from the PEPPER HELP
Desk
http://pepperresources.org/HelpContactUs.aspx

Where is My PEPPER?

PEPPER Resources
Scroll Down

Skilled Nursing Facility
Distribution Schedule
TMF will distribute PEPPER according to
the schedule and methods below.
Annually, on or about May 5 through May 12, 2014
SNFs/swingbeds that are part of a short-term acute
care hospital
Electronically via QualityNet secure file exchange

Skilled Nursing Facility
Distribution Schedule
Free-standing SNFs and SNFs that are
part of another type of hospital
Available electronically to the SNF’s CEO,
president or administrator via secure portal
on PEPPERresources.org
Note: SNFs that are part of a critical access hospital will not receive
PEPPER.

PEPPER Resources
Resource Manual
Navigate through PEPPER by clicking on the
worksheet tabs at the bottom of the screen
Each tab is labeled to identify the contents of
each worksheet (e.g., Target Area Reports,
Compare Targets Report)

Where is My PEPPER?
Effective January 1, 2014 TMF will no longer resend copies of SNF
PEPPERs (version Q4FY12) which were initially mailed to all
SNFs on August 30, 2013
The next SNF PEPPER (version Q4FY13) will be distributed in late
April-early May 2014 and will be available for access in electronic
format by the SNF’s CEO/administrator/president. TMF will send
an email notification when the Q4FY13 SNF PEPPERs are
available
TMF encourages you to sign up to receive this email by visiting
the Home page of PEPPERresources.org and click on the gray box
in the upper right area of the page to “Join the email list….”; fill
out the requested information and select the “Skilled Nursing
Facility”. This will ensure that you receive any future
information/updates pertaining to the SNF PEPPER.

PEPPER
Provider-specific Medicare data statistics for
services vulnerable to improper payments
Compares to all other SNFs across the state,
nation or Medicare Audit Contractors(MAC)
jurisdiction
Shared with both Medicare Audit Contractors
(MACs) and the Medicare Recovery Auditor
Contractors (RACs)

PEPPER
Targeted areas were derived from two
recent Office of Inspector General (OIG)
Reports:
“Inappropriate Payments to skilled
Nursing Facilities Cost Medicare than a
Billion Dollars in 2009” (November 2012)
“Questionable Billing by Skilled Nursing
Facilities” (December 2010)

Claims Data
The SNF PEPPER provides SNFs with
their jurisdiction, state and national
percentile values for each target area with
reportable data for the most recent three
fiscal years
When the target (numerator) count is less than
11 for a target area for a time period, statistics
are not displayed

Target Areas
Therapy RUGs with High ADLs
Non-therapy RUGs with High ADLs
Change of Therapy Assessment
Ultra High RUGs
Therapy RUGs
90+ Day Episodes of Care

Each SNF PEPPER summarizes claims data statistics
(obtained from paid SNF Medicare UB-04 claims) for
SNF episodes of care that end in the most recent three
federal fiscal years (the federal fiscal year spans
October 1 through September 30)
A SNF is compared to other SNFs in three comparison
groups:
Nation
Medicare Administrative Contractor (MAC) jurisdiction and
MAC state.
These comparisons enable a SNF to determine if its results
differ from other SNFs and if it is at risk for improper Medicare
payments (i.e., is an “outlier”)

Jurisdiction
JE Noridian Healthcare Solutions – 1462 facilities
JF Noridian Healthcare Solutions – 775
J5 Wisconsin Physician Services – 2730
J6 National Government Services – 1402
JH Novitas Solutions, Inc. – 2454
J8 Wisconsin Physician Services – 591
J9 First Coast Service Options – 433
J10 Cahaba GBA – 761
All Jurisdictions – 15,660

Page 1 (after introduction)
FY2012 only
When the SNF’s percent is at or above the national
80th percentile for a target area, the SNF’s percent is
printed in red bold
When the SNF’s percent is at or below the national
20th percentile for a target area the SNF percent is
printed in green italics
When the SNF is not an outlier, the SNF’s percent is
printed in black
Blank if Less than 11 SNFs or episodes in group

Each Target Area listed in the report contains a
Comparative Data Table.
Identifies the target area percents that are at the 80th
and 20th percentiles (for areas at risk for under
coding only) for the three comparison groups of
nation, jurisdiction and state.
The percent values are graphed as trend lines on the
Target Area Graph.
State percentiles are zero when there are fewer than 11 SNFs
with reportable data for the target area in the state.
Jurisdiction percentiles are zero when there are fewer than
11 SNFs with reportable data for the target area in the
jurisdiction.
Comparative Data Table

Target Area Reports
PEPPER Target Area Reports display a variety of
statistics for each target area summarized over three
years.
Each report includes
Target area graph
Target area data table
Comparative data
Interpretive guidance
Suggested interventions

PEPPER Resources
Resource Manual
Suggested interventions if at/above 80th percentile
ADLs
This could indicate a risk of potential overcoding of
beneficiaries’ activities of daily living (ADL) status. The SNF
should determine whether the amount of assistance
beneficiaries need with ADL as reported on the MDS is
supported and consistent with medical record documentation.
Change of Therapy
This could indicate that the SNF is experiencing challenges
with delivering services to the beneficiary as anticipated. The
SNF may look into factors that lead to the need for the COT
assessment (e.g., can care planning be improved? Are there
issues with completing therapy as scheduled?)

PEPPER Resources
Resource Manual
Ultra High and Therapy RUGs
This could indicate that the SNF is improperly billing for
therapy services. The SNF should determine whether
therapy provided was reasonable and medically necessary,
and that the amount of therapy reported on the MDS is
supported by documentation in the medical record.

ADLs
Therapy RUG (2011)
RUX Rehabilitation Ultra High /
Extensive Services
ADL 11 – 16
RVX Rehabilitation Very High /
Extensive Services
ADL 11 – 16
RHX Rehabilitation High /
Extensive Services
ADL 11 – 16
RMX Rehabilitation Medium /
Extensive Services
ADL 11 - 16
RLX Rehabilitation Low / Extensive
Services
ADL 2 – 16
RUC Rehabilitation Ultra High with
ADL 11 - 16
RVC Rehabilitation Very High
ADL 11 - 16
RHC Rehabilitation High
ADL 11 – 16
RMC Rehabilitation Medium
ADL 11 – 16
RLB Rehabilitation Low
ADL 11 – 16

ADLs
Non-Therapy RUG (2011)
ES3 Extensive Services Tracheostomy
Care and Ventilator/respirator
ADL 2 - 16
ES2 Extensive Services Tracheostomy
Care or Ventilator/respirator
ADL 2 - 16
ES1 Extensive Services Infection Isolation
without Tracheostomy Care or
Ventilator/respirator and
ADL 2 – 16
HE2 Special Care High with Depression
ADL 15 – 16
HE1 Special Care High with No
Depression and
ADL 15 – 16
LE2 Special Care Low with Depression
ADL 15 – 16
LE1 Special Care Low with No Depression
ADL 15 – 16
CE2 Clinically Complex with Depression
ADL 15 – 16
CE1 Clinically Complex with No Depression
ADL 15 – 16
PE2 Physical Function with ≥2 Restorative
Nursing
ADL 15 – 16
PE1 Physical Function with ≤1 Restorative
Nursing
ADL 15 – 16

PEPPER Resources
Resource Manual
This could indicate that the SNF is continuing treatment
beyond the point where those services are necessary. The SNF
should review documentation for beneficiary episodes of care
with a length of stay of 90+ days to ensure that beneficiaries’
continued care is appropriate and that they received a skilled
level of care. The SNF should review plans of care for
appropriateness and assess appropriateness of discharge
plans.

PEPPER Resources
Resource Manual
Suggested interventions if at/below 20th percentile
ADLs
This could indicate a risk of potential undercoding of
beneficiaries’ADL status. The SNF should determine
whether the amount of assistance beneficiaries need
with ADL as reported on the MDS is supported and
consistent with medical record documentation.

PEPPER Resources
Resource Manual
Change of Therapy
SNFs that are using the COT assessment infrequently
or not at all may be targeted by MACs or RACs for
review to establish whether therapy assessments are
being completed as required (see
https://oig.hhs.gov/oei/reports/oei-02-09-00200.asp
page 15).

PEPPER Resources
Resource Manual
Ultra High and Therapy RUGs
Not Applicable
Not Applicable

HHI Analysis

HHI Comparative Data

SNF PEPPER?
Why is Data Collection and Analysis
a MUST?

SNF PEPPER?
Compliance, Compliance
Compliance

SNF PEPPER?
Per CMS
The Office of Inspector General encourages SNFs to
develop and implement a compliance program to protect
their operations from fraud and abuse
Beginning in 2013, SNFs are required to have a compliance
program
As part of a compliance program, a SNF should conduct
regular audits to ensure services provided are necessary
and that charges for Medicare services are correctly
documented and billed
The Program for Evaluating Payment Patterns Electronic
Report (PEPPER) can help guide the SNF’s auditing and
monitoring activities

Compliance Program
Per Federal and State laws and Federal
healthcare program requirements
A system of policies and procedures
Monitoring and Auditing tools
Communication and reporting methods
Enforcement
Leadership

OIG Supplemental Guidance:
“Compliance programs help nursing
facilities fulfill their legal duty to
provide quality care; to refrain from
submitting false or inaccurate claims or
cost information to the Federal health
care programs; and to avoid engaging
in other illegal practices”
Compliance and Ethics Program

OIG Guidance
http://oig/hhs/gov/compliance/complianc
eguidance/index.asp
Be As Informed As Possible

Compliance Is Mandatory
Medicare/Medicaid Condition of
Participation
March 23, 2013
Patient Protection and Affordable Care
Act

HIPAA
Privacy Rule
Security Rule
Breach Notification Rule

Penalties: HIPAA
Civil penalties: up to $50,000 per
violation ($1.5 Million annual
maximum per type of violation)
Criminal penalties: Up to $250,000 and
10 years imprisonment

Efficacy
Criminal sanctions may be mitigated by
a compliance program, but only if that
program is effective
Most SNFs lack the policies &
procedures, staff training, audit
functions, and regulatory updates to
keep their compliance programs
effective
106Harmony Healthcare International, Inc.Copyright © 2014 All Rights Reserved

Required Compliance Program
Components
Written Policies & Procedures, Code of
Conduct
Compliance Officer & Compliance
Committee
Training and Education
Effective Lines of Communication
Enforcement of Standards
Responding Promptly to Detected Offenses
and Taking Corrective Action
Auditing and Monitoring

Risk Areas
Quality of Care
Resident Rights
Billing & Claims Submission
Employee Screening
Kickbacks, Inducements and Self-Referrals
Cost Reporting
HIPAA Privacy and Security
Record Creation and Retention
Anti-Supplementation
Medicare Part D

Baseline Audit
Identify risk areas
Identify strengths and weaknesses
Seek input from all departments
Always be on the lookout for “new”
risks

Periodic Audits
Quality of Care
Resident Rights
Billing & Cost Reporting
Employee Screening
Kickbacks, Inducements
and Self-Referrals
Submission of Accurate
Claims
HIPAA Privacy and
Security
Record Creation and
Retention
Anti-Supplementation
Medicare Part D
Additional risk areas
identified in the baseline
audit

Annual Review
Annual Review of the overall
effectiveness of the compliance
program

Compliance Officer
Develop a position description
Essential duties
Oversee and monitor the
implementation of a corporate
compliance program
Help the organization, through policies
and procedures, auditing, and training,
minimize the risk of fraud and abuse

Compliance Officer
Reports to the Compliance Committee
Directs facility audits
Collect data
Develop responsive action plans
Manages compliance hotline reports
Compliance training for the
organization

Compliance Officer
Manage employee, officer, contractor,
and volunteer screening
Oversee HIPAA compliance activity
Participate in the Quality Assurance
program
Conduct annual compliance program
review and update
Ensure contractors are aware of your
compliance program and resident rights

Compliance Officer
A Compliance Officer can hold another
position within the organization at the
same time, i.e., staff development
coordinator, quality assurance nurse
Requires a dynamic person will have to
interact with Board members, CNAs,
housekeepers, department leaders,
contractors, volunteers, and regulators

Compliance Programs
Train and educate
Provide compliance training to
all employees, officers, directors,
owners upon hire and annually
Create a training schedule for
each risk area

Compliance Programs
Audit and Monitor
Develop audit tools for each risk
area
Schedule audits throughout the
year
Assign responsibility for audits
Develop a reporting mechanism
for audit results

Compliance Programs
Review annually
Acknowledge progress
Identify areas to further advance
compliance

Compliance Programs
Stay current
Monitor and incorporate updates
into the Compliance Program
New regulations
OIG updates
Recent enforcement actions

Compliance Programs
Compliance Officer is the key to a
successful program

Closing Thoughts
There is no “Good” or “Bad” PEPPER
Compliance chart auditing at regular
intervals for outlier areas
Analyze PEPPER data
Develop a Compliance Program

Conclusion
Educate, Discuss and Prepare
Communicate to all Staff Medicare
Skilled Care Criteria
Conduct internal/external Mock Audits
to educate staff
Refine Interdisciplinary Management of
Medicare Additional Documentation
Requests

Questions/Answers
Harmony Healthcare International
(978) 887 - 8919
www.Harmony-Healthcare.com
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@ElisaBovee
@Harmonyhlthcare
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Follow-up PEPPER Webinar…
Copyright © 2014 All Rights Reserved Harmony Healthcare International, Inc.
Interpreting Your 2014
SNF PEPPER
May 9, 2014: 1pm-2:30pm (EST)
Speakers: Kris Mastrangelo , OTR/L, LNHA, MBA & Keri Hart, MS-CCC/SLP, RAC-CT, CHHRP-QT
124
Now that you are ready for your SNF PEPPER, learn how
to interpret it during our special follow-up webinar
Register Online: https://www.eventbrite.com/e/interpreting-your-
2014-pepper-webinar-tickets-11244501607

Register online
http://info.harmony-healthcare.com/harmony2014
or by phone (978) 887-8919 ext. 13
Register Online

Harmony Healthcare International
Have you Considered a Customized Complimentary
HARMONY(HHI) MEDICARE PROGRAM
EVALUATION
or
CASE MIX ANALYSIS
for your Facility?
Perhaps your facility has potential for additional revenue
Assess your facility against key indicators and national norms
Email us at for more information
RUGS@harmony-healthcare.com
Analysis is cost & obligation free
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SNFs can use the Compare Targets Report to help
prioritize areas for auditing and monitoring
The Compare Targets Report includes all target areas
with reportable data for the most recent year
included in PEPPER
For each target area, the Compare Targets Report
displays the
SNF’s number of target (numerator) count,
Target area percent
SNF’s percentiles as compared to the nation, jurisdiction and
state comparison groups

Are You Ready for the SNF PEPPER?

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