Interpreting Your 2014 SNF PEPPER

Program for Evaluating Payment
Patterns Electronic Report:
Interpreting Your 2014 SNF PEPPER
HARMONY UNIVERSITY
The Provider Unit of
Harmony Healthcare International, Inc. (HHI)
Presented by:
Kris Mastrangelo, OTR/L, MBA, LNHA
President and CEO
Keri A. Hart, MS-CCC/SLP, RAC-CT, CHHRP-QT
Vice President of Clinical Operations/Education and Training
Copyright © 2014 All Rights Reserved Harmony Healthcare International, Inc. 1

Harmony Healthcare International, Inc. 2
About Kris
Kris Mastrangelo, President and CEO, owns and
operates Harmony Healthcare International, (HHI)
an industry leader in Long Term Care consulting.
14,000 Medical records reviewed per year
Core Business Patient Centered
Follow Me! @KrisMastrangelo
Copyright © 2014 All Rights Reserved

About Keri
Keri Hart, MS-CCC, SLP, RAC-CT, CHHRP-QT
Keri Hart is the Vice President Clinical
Operations/Education and Training at Harmony
Healthcare International, (HHI) an industry
leader in Long Term Care consulting.
Over 25 Years Experience in Long-term Care
Rehabilitation Management
MDS
Follow Me! @CHHRPHart

Program for Evaluating Payment Patterns
Electronic Report:
Interpreting Your 2014 SNF PEPPER
Disclosure: The planners and presenters of this
education activity have no relationship with commercial
entities or conflicts of interest to disclose
Planners:
Elisa Bovee, MS, OTR/L
Diane Buckley, BSN, RN, RAC-CT
Keri Hart, MS-CCC/SLP, RAC-CT, CHHRP-QT
Presenters: Kris Mastrangelo, OTR/L, MBA, LNHA
Keri Hart, MS-CCC/SLP, RAC-CT, CHHRP-QT

Objectives
Learner will be able to:
State three variables contributing to initiation of the
PEPPER in the long-term care setting
Discuss the relevance of PEPPER percentile ranking
Define the calculations leading to Pepper Target Areas
Communicate a summary of their PEPPER data to key
staff
Identify their facility specific risk factors for Medicare
reviews
Develop a facility specific action plan in response to
PEPPER Data

PEPPER
This report will contain the SNFs detailed
facility specific Medicare claims data in certain
targeted areas and compare the SNF to other
SNFs nationally
Skilled Nursing Facilities (SNFs) should sign
up to receive email notification that your
PEPPER is available
PEPPERResources.org from the PEPPER
HELP Desk
(http://pepperresources.org/HelpContactUs.aspx)

Where is My Pepper?
Updated Release Schedule: On or about
May 6 through May 12, 2014
Staged Release
Freestanding SNFs will receive via a secure
portal on the PEPPERresources.org website
SNFs/Swing beds that are part of a short-term
acute care hospital (3rd digit in the PTAN/CMS
certification number/provider number = “U”) will
receive electronically via QualityNet secure file
exchange

Accessing Your SNF PEPPER
Access to the PEPPER will be restricted
to the provider’s Chief Executive Officer,
President or Administrator
Corporate offices and/or facility
management companies will need to
obtain PEPPERs from each individual
provider in their organization

What you will need:
Facility specific 6-digit CMS Certification Number
The 3rd digit of this number will be a 5 or a 6
This is not the same number as the tax
identification number or national provider
identification number

For verification purposes, requestors will be
required to enter either one of the following from
the UB-04 for a fee-for-service Medicare patient
who received services at the provider between
September 1-30, 2013:
A Patient Control Number (found at form locator
03a on the UB04 claim form)
or
A Medical Record Number (found at form locator
03b on the UB04 claim form)

UB04 Claim Form

Do not enter any commas, decimals, dashes or spaces
If the values in both of these fields are comprised of
greater than 30 percent letters (as opposed to numbers)
the provider must contact TMF to obtain an alternate
validation code
Patient names cannot be entered due to patient privacy
laws
If the provider does not have any claims with either
of these fields populated, they must contact TMF to
obtain an alternate validation code

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

Fraud, Waste and Abuse
The Government Accountability Office
has designated Medicare as a program at
high risk for fraud, waste and abuse
Payments to skilled nursing facilities
(SNFs) have been identified as
vulnerable to abuse
In 2012 the Office of Inspector General
(OIG) found that approximately 25% of
SNF claims were billed in error

Compliance
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

Compliance
The Program for Evaluating Payment
Patterns Electronic Report (PEPPER)
can help guide the SNF’s auditing and
monitoring activities
There is no “Good” or “Bad” PEPPER
Facility Specific

PEPPER
PEPPER gives provider-specific Medicare
data statistics for services vulnerable to
improper payments
Allows providers to see how their facility
compares to all other SNFs:
Nation
Medicare Administrative Contractor (MAC)
State (MAC only)

State Reference Example
Jurisdiction 5
Wisconsin Physician
Services:
Total 2,730
South Carolina 23
Tennessee 79
Texas 27
Utah 12
Virginia 33
Virgin Islands 1
Vermont 2
Washington 101
Wisconsin 14
Virginia 5
Wyoming 6

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
FY 2013 (October 1 2012 through September
30th 2013 ) is displayed on the first table
When the target (numerator) count is less
than 11 for a target area for a time period,
statistics are not displayed

Claims Data
Claim “From Date” and claim “Through
Date” fall within the time period of
October 1, 2010 through September 30,
2013
Additional claims for June 1, 2010
through September 30, 2010 will be
included for episodes of care
beginning prior to the reporting period

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

Compare Target Report
Page 1 (after introduction)
FY2013 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

Target Areas
Target Description
Therapy High
ADL
Proportion of days billed w ithin episodes of care ending in the
report period w ith RUG equal to RUX, RVX, RHX, RMX, RUC,
RVC, RHC, RMC, RLB, to days billed w ithin episodes of care
ending in the report period for all therapy RUGs
Nontherapy
High ADL
report period w ith RUG equal to SSC, CC2, CC1, BB2, BB1, PE2,
PE1, IB2, IB1 in RUG III; HE2, HE1, LE2, LE1, CE2, CE1, BB2,
BB1, PE2, PE1 in RUG IV, to days billed w ithin episodes of care
ending in the report period for all nontherapy RUGs
Change of
Therapy
Assessment
Proportion of assessments w ith AI second digit equal to D
w ithin episodes of care ending in the report period, to all
assessments w ithin episodes of care ending in the report
period
Ultrahigh
Therapy RUGs
report period w ith RUG equal to RUX, RUL, RUC, RUB, RUA, to
days billed w ithin episodes of care ending in the report period
for all therapy RUGs
Therapy RUGs Proportion of days billed w ithin episodes of care ending in the
report period for therapy RUGs, to days billed w ithin episodes
of care ending in the report period for all therapy and
nontherapy RUGs
90+ Day
Episodes of
Care
Proportion of episodes of care ending in the report period at the
SNF w ith a length of stay of 90+ days, to all episodes of care
ending in the report period at the SNF

Target Count and Percent
Target Description
Target
Count Percent
Therapy High
ADL
3,833 18.4%
Nontherapy
High ADL
119 18.2%
Change of
Therapy
Assessment
period
167 6.7%
Ultrahigh
Therapy RUGs
7,466 35.8%
nontherapy RUGs
20,847 97.0%
90+ Day
Episodes of
Care
27 3.2%

Target Count
Number of Episodes of Care
Shows Volume of Care
The “Target Count” can also be used to
help prioritize areas for review
Areas in which a provider is at/above the
80th percentile that have a large target
count may be given higher priority than
target areas for which a provider is
at/above the 80th percentile that have a
smaller target count

Percentiles
Target Description
Target
Count Percent
SNF
National
%ile
SNF
Jurisdict.
%ile
SNF
State
%ile
Therapy High
ADL
3,833 18.4% 17.3 12.0 13.6
Nontherapy
High ADL
119 18.2% 38.6 32.5 40.2
Change of
Therapy
Assessment
period
167 6.7% 15.0 19.0 10.8
Ultrahigh
Therapy RUGs
7,466 35.8% 27.6 31.9 31.8
nontherapy RUGs
20,847 97.0% 77.6 88.2 92.1
90+ Day
Episodes of
Care
27 3.2% 2.4 3.4 1.4

Percentiles
Percentiles are calculated for each of the three comparison
groups
State
Medicare Audit Contractor (MAC/FI) jurisdiction
Nation
SNF are to focus on National Data
Given the MAC may potentially use data for Additional Documentation
Requests (ADR) reviews, all data is important
SNFs whose target percents are at or above the 80th percentile
(i.e., in the top 20 percent) are considered at risk for improper
Medicare payments with areas at risk for over coding
SNFs whose target percents are at or below the 20th percentile
(i.e., in the bottom 20 percent) are considered at risk for
improper Medicare payments with areas at risk for undercoding

A Closer Look at Target Areas
Target Description
Therapy High
ADL
Nontherapy
High ADL
Change of
Therapy
Assessment
period
Ultrahigh
Therapy RUGs
nontherapy RUGs
90+ Day
Episodes of
Care

Numerator : Count of days billed within
episodes of care ending in the report
period for Rehabilitation and Rehabilitation
Extensive RUGs
All Rehab “C” or “X” Days
Also includes RLB
Denominator : Count of days billed within
period for all Rehabiliattion RUGs

RUG IV Examples:
RUX, RGX, RHX, RMX, RLX,
RUC, RVC, RHC, RMC,
RVX

Numerator : Count of days billed within
period for Nursing RUGs
All Non Therapy “E”Days
Also includes BB1 and BB2 (Low ADL)
Denominator : Count of days billed
within episodes of care ending in the
report period for all Nursing RUGs

RUG-IV Examples:
HE2, HE1
LE2, LE1
CE2, CE1
PE2, PE1
BB2, BB1

Numerator: Count of assessments with AI
second digit equal to “D” within episodes
of care ending in the report period
“D” is a Change in Therapy Assessment
(COT)
Denominator: Count of all assessments
within episodes of care ending in the
report period
COT initiated October 1st 2011 (FY2012)

Ultrahigh Therapy RUGs
Numerator: Count of days billed within
episodes of care ending in the report period
with RUG equal Rehabilitation Ultra High
or Ultra High Extensive
(RUC,RUB,RUA,RUX,RUL)
Denominator: Count of days billed within
episodes of care ending in the report period
for all Rehabilitation RUGs
Not Total RUGs

Ultrahigh Therapy RUGs
RUC
RUB
RUA
RUX
RUL

Therapy RUGs
Numerator: Count of days billed
within episodes of care ending in
the report period for Rehabilitation
RUGs
Denominator: Count of days billed
within episodes of care ending in
the report period for all RUGs

Episode of Care
Based on episodes of care
Defined as a series of claims for a patient where
the difference between the “Through Date” of one
claim and the “From Date” of the subsequent
claim is less than or equal to thirty days
Admission through Discharge
Considered same Episode of Care if readmission
to SNF (billed again) within 30 Days of discharge
Data includes episodes of care that end in
period reported

Numerator: Count of episodes of care
ending in the report period with a length
of stay of 90+ days
Denominator: Count of all episodes of
care ending in the report period

Target Area Reports
Target area graph provides a visual representation of
the SNF’s target area percent over three years
Target Area SNF Data Table titled “Your SNF”
includes total number of episodes of care for the
target area (numerator) and total (denominator)
Roughly correlates to Patients Episodes
Based on the definition of the target area
Comparative Data for National, State and Jurisdiction
Some include 80th and 20th Percentile
Some only include 80th percentile
Average Length of Stay for the numerator and for the
denominator

Target Area Graph-COT
25%
20%
15%
10%
5%
0%
10/1/10 – 9/30/11 10/1/11 – 9/30/12 10/1/12 – 9/30/13
Target Percent
SNF Natl: 80th %ile Juris: 80th %ile State: 80th %ile

Target Area SNF Data
YOUR SNF 10/1/10 – 9/30/11 10/1/11 – 9/30/12 10/1/12 – 9/30/13
Target Area Percent 5.94% 6.7%
Note: the COT
Assessment
became effective
Oct. 1, 2011;
statistics are not
available for FY
Target Count (Numerator: count of assessments w ith AI second
digit equal to “D” w ithin episodes of care ending in the report period) 150 167
Denominator Count (count of all assessments w ithin episodes of
care ending in the report period) 2011
2527 2,506
*Data not available when target count less than 11.

Comparative Data
COMPARATIVE DATA
*Data not available when target count less than 11.
National 80th Percentile 17.1% 19.0%
Jurisdiction 80th Percentile 15.0% 17.2%
State 80th Percentile 0.0% 14.9% 18.2%
Note: State and/or jurisdiction
percentiles are zero if there are fewer
than 11 providers with reportable data
for the target area in the state and/or
jurisdiction.

Comparative Data-FY2013
Target Area
20th
Percentile
50th
Percentile
80th
Percentile
Therapy RUG Days 85.5% 93.2% 97.3%
Ultra High RUG Days 28.1% 53.9% 73.1%
Therapy High ADL Days 20.0% 32.9% 48.1%
Non-Therapy High ADL Days 11.5% 23.4% 42.2
90+ Day Episode of Care 7.5% 14.1% 25.9%
Change of Therapy Assessments 7.0% 12.7% 19.0%

Target Area Reports
CMS has developed “suggested
interventions” that SNFs may
consider when assessing their risk
for improper Medicare payments
These are “generalized
suggestions and will not apply to all
situations”

TMF Suggested Interventions
Nontherapy RUGs With High ADL
High Outliers: 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.

Nontherapy RUGs With High ADL
Low Outliers: 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.

Ultra High
High Outliers: 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

Ultra High
Low Outliers: No Suggestions

RUG Reports
SNF Top RUGs Report for all episodes of care
lists the top RUGs by number of days
SNF Top RUGs Reports episodes of care with
90+ days lists the top RUGs by number of days
Jurisdiction-wide Top RUGs Reports Report
for all episodes of care lists the top RUGs by
number of days
Jurisdiction-wide Top RUGs Reports
episodes of care with 90+ days lists the top
RUGs by number of days

RUG Reports
Each RUG Report Includes
Total episodes of care in the report period
RUG code and description
Number of RUG days billed
Percent of RUG days to total days
Percent of episodes of care with the RUG
billed total episodes of care
Average length of stay for the RUG

Facility Specific Risk Factors
Focus on National Data
Risk Assessment
Review areas approaching or at outliers
(80th Percentile, 20th Percentile)
Discuss with the team facility
characteristics that may lead to
High/Low Utilization target areas
Does the data make sense

Focus on Compliance
Auditing and Monitoring
“The use of audits and/or other risk
evaluation techniques to monitor
compliance, identify problem areas, and
assist in the reduction of identified
problems”
Detect
Prevent
Deter

Monitoring
Common Management tool
Determines how effective the controls
are
Know what is happening in the field
Day to day reviews
Includes self reviews and peer
reviews

Auditing
Completed by someone with no
vested interest
Risk Adjusted Selection
Formalized Approach
Established Approach

Focus on Compliance-Education
Education and Training
“The development and
implementation of regular, effective
education and training programs.”

Focus on Compliance-Education
Easy to understand Focused Education
Risk Areas
ADL Documentation
Therapy Documentation
Therapy Minutes Accuracy
Nursing Documentation
MDS Accuracy
Billing Accuracy
Compliance with technical and clinical
Medicare Requirements

Developing an Action Plan
Oversight of Compliance
Officer/Committee
“charged with the responsibility for
developing, operating and monitoring
the compliance program, and who
reports directly to the owner(s),
governing body and/or CEO”

RUGs with High ADLs
Therapy and Non-Therapy RUGs
Accurate documentation of care
provided by Direct care staff
Accurate coding of MDS (Section G)
Accuracy of Late Loss ADLs (Bed
Mobility, Transfer, Toilet Use and
Eating)

RUGs with High ADLs
Direct Care Staff Documentation:
Policy and Procedure
ADL documentation forms
Direct care staff ADL education on
hire and throughout the year
Competency Assessment
Process for ADL Correction
Auditing and Monitoring activities

RUGs with High ADLs
MDS Accuracy
Accuracy of Late Loss ADLs (Bed Mobility,
Transfer, Toilet Use and Eating)
MDS Education related to Section G Coding
Practical application of RAI Manual Changes
(October 2013 Section G Rules of Three
Changes)
Competency Assessment

Therapy RUGs
Therapy and Nursing Documentation to support skilled
coverage criteria
Medical necessity of Therapy
Interdisciplinary Review at Medicare Meeting for
therapy and nursing clinical criteria
Access to skilled coverage for Nursing
Education related to Medicare Benefit Policy Manual
revised Chapter 8 “Coverage of Extended Care (SNF)
Services Under Hospital Insurance” implemented
January 7th 2014
Minutes Accuracy MDS to Logs
Auditing and monitoring

Presence of Appropriate Documentation
The Medicare Benefit Policy Manual states
that “While the presence of appropriate
documentation is not, in and of itself, an
element of the definition of a “skilled” service,
such documentation serves as the means
by which a provider would be able to
establish, and a Medicare contractor would
be able to confirm, that skilled care is, in
fact, needed and received in a given case.”

Ultra High RUGs
Provision of clinically appropriate intensity of therapy based
on an individualized plan of care
Monitoring Therapy Documentation
Auditing by a non-vested entity
Communication with Contract Therapy
Awareness of unwritten policies that impact compliance
There should not be benchmarks or “rules”
revised Chapter 8 ”Coverage of Extended Care (SNF)
Services Under Hospital Insurance” Section (30.2.2.1)
titled “Documentation to Support Skilled Care
Determinations” implemented January 7th 2014

Accurate and timely completion per
Medicare requirements
Resident Assessment Instrument (RAI)
Manual Requirements
High Risk of Non-Compliance due to
complexity of the regulatory requirements
Therapy Minutes Accuracy
MDS
COT Reviews

Change of Therapy (COT) Review Process
Verification of Minutes
MDS and Therapy joint responsibility
Timely ARD Selection

Timely Scheduling of Change of
Therapy (COT) MDS Assessments
Scheduled on an MDS Within 1 to 2 Days
Awareness of unwritten policies that impact
compliance
Facility should not establish benchmarks,
scheduling dependent on clinical care
provided

Regulatory Requirements for completion
Appropriate COT Exceptions
October 1st COT requirement changes practical application
Accurately Combining Assessments
Accurate Billing of Other Medicare Required
Assessments (OMRAs)
Auditing and monitoring Correct Billed Days
Process for communicating pending COTs at months end
Education and Training

Provision of clinically appropriate intensity of
therapy based on an individualized plan of care
Therapy Documentation to support changes in
intensity
Monitoring
Communication with Contract Therapy
Auditing by a non-vested entity
Therapy Staffing to ensure medically necessary
therapy is provided per the Plan of Care

Therapy and Nursing Documentation to support
skilled coverage criteria
Clinically Appropriate Length of Stay
Interdisciplinary Review at Medicare Meeting for therapy
and nursing clinical criteria compliance
Clinically Appropriate Access to skilled coverage for
Nursing
revised Chapter 8 ”Coverage of Extended Care (SNF)
Services Under Hospital Insurance” implemented January
7th 2014
Auditing and monitoring

Communication
Communicate High Risk Areas to Staff
Employees
Contract Providers
Communicate Plan to ensure compliance
Establish a code of conduct prioritizing compliance
OIG requires “effective line of communication
between the compliance officer and all employees,
including a process, such as a hotline or other
reporting system, to receive complaints, and the
adoption of procedures to protect the anonymity of
complainants and to protect whistle blowers from
retaliation”

Identification of Non-Compliance
Respond
MDS Corrections within 120 Days of Billed Date
Billing Adjustments
Staff Concerns
Investigate all reports of non-compliance
Report
Seek Counsel to determine requirements
Enforcement and Discipline

HHI Analysis
FY 2013 PEPPER ANALYSIS
Harmony Healthcare International (HHI)
430 Boston Street, Suite 104, Topsfield, MA 01983
MAC: NHIC
Percentile Ranking
Target Areas Target Count Percent National
Jurisdiction
(MAC) State
Therapy High ADL Days 2,730 51.6% 85.30 82.70 83.10
Non-Therapy High ADL Days 528 26.7% 58.30 46.10 40.00
Change of Therapy Assessments 60 6.9% 19.90 34.00 40.00
Ultra High RUG Days 3,097 58.5% 64.60 71.40 69.30
Therapy RUG Days 5,292 72.8% 8.80 13.70 15.00
90+ Day Episode of Care 19 9.0% 25.90 36.90 32.90
≥ 80th Percentile
≤ 20th Percentile
See Attachment

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Therapy RUG
Days
Ultra High
RUG Days
National
Comparative Data
(Actual Percentages)
Therapy High
ADL Days
Non-Therapy
High ADL
Days
90+ Day
Episode of
Care
Change of
Therapy
Assessments
Percent
Target Areas
80th Percentile
Actual SNF
20th Percentile
HHI Comparative Data

HHI Comparative Data
Actual SNF
20th
Percentile
50th
Percentile
80th
Percentile
Target Area
72.8% Therapy RUG Days
85.5% 93.2% 97.3%
58.5% Ultra High RUG Days
28.1% 53.9% 73.1%
51.6% Therapy High ADL Days
20.0% 32.9% 48.1%
26.7% Non-Therapy High ADL Days
11.5% 23.4% 42.2%
9.0% 90+ Day Episode of Care
7.5% 14.1% 25.9%
6.9% Change of Therapy Assessments
7.0% 12.7% 19.0%
National
Comparative Data-Actual Percentages

Conclusion
PEPPER is a Tool for Ensuring
Compliance with High Risk Areas
Accurate and Appropriate Reimbursement
for Care Provided
Compliance is the Foundation for Accurate
and Appropriate Reimbursement

Bibliography
Office of Inspector General, U.S. Department of Health and Human
Services (OIG) “Inappropriate Payments to Skilled Nursing Facilities
cost Medicare more than a Billion Dollars in 2009” (November 2012)
OIG “Questionable Billing by Skilled Nursing Facilities” (December
2010).
PEPPERResources.org
PEPPER HELP Desk:
(http://pepperresources.org/HelpContactUs.aspx)
Skilled Nursing Facility Users Guide
http://pepperresources.org/LinkClick.aspx?fileticket=xnGEABk7_d
U%3d&tabid=172
UB04 claim form

Questions/Answers
Harmony Healthcare International
(978) 887 - 8919
www.Harmony-Healthcare.com
Connect with Us!
@KrisMastrangelo
@CHHRPHart
@Harmonyhlthcare
facebook.com/HarmonyHealthcareInternational
linkedin.com/company/harmony-healthcare

Harmony Healthcare International (HHI)
For attending this seminar, you are eligible
for one of the following:
Free PEPPER Analysis
Free RUGS Analysis
Assess your facility against key indicators and national norms.
Contact us at:
RUGS@harmony-healthcare.com
Analysis is cost & obligation free
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Interpreting Your 2014 SNF PEPPER

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