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Written by: Bob Habasevich, PT on Monday, September 26, 2011 Posted in: Inpatient Rehab

Today’s blog was going to discuss Goal Setting in IRFs. However, the recent introduction of the PEPPER program will have to delay the goal setting discussion to a later date.

As my colleague Darlene D’Altorio-Jones, alias DJones, has already described in her blog post titled, PEPPER for IRF – Are You Ready For This Condiment?, PEPPER is an OIG program to help hospitals audit and monitor their Medicare activities compared to their peers. The Program for Evaluating Payment Patterns Electronic Report (PEPPER) provides facility-specific statistics for Medicare discharges that may be at risk for improper Medicare payments.  PEPPER is a data report that contains a single hospital’s claims data statistics (obtained from the UB-04 claim submitted to the Medicare Administrative Contractor (MAC) or Fiscal Intermediary (FI)) for Case-Mix Groups (CMGs) and discharges that may be at risk for improper Medicare payment due to billing, coding and/or admission necessity issues. Each PEPPER contains statistics for each area at risk for improper payments (referred to in the report as “target areas”.)

If your facility always has a small volume of cases, numbers varying significantly from the norm could be important and warrant a review. This is an early warning for small units of hospitals who are expected to perform the same as larger free standing IRFs.

Comparative data for the three consecutive 12-month periods will be used to help identify whether the IRF’s target area percents changed significantly in either direction from one year to the next. This could be an indication of a procedural change in admitting, coding or billing practices, staff turnover or a change in medical staff.

Some things jump right out of the box.  First, RIC 20 is the fastest growing specialty group in rehabilitation, otherwise known as Miscellaneous.  Yes, we thought it was a catchall safe haven for patients who didn’t quite fit into any other RIC.  Well, CMS doesn’t think so.  It’s a target area for PEPPER review.  “This could indicate that there are unnecessary admissions for patients admitted in the ‘Miscellaneous’ CMGs (2001 – 2004.) A sample of medical records for these CMGs should be reviewed to determine if inpatient admission was necessary or if care could have been provided more efficiently on an outpatient basis or in another setting (e.g., skilled nursing facility or home with home health.)”

Second, patients with high FIM™ admission ratings and no comorbidities will be questioned, “This could indicate that there are unnecessary admissions for patients admitted in CMGs 0101, 0501, 0601, 0801, 0802, 0901, 1401 or 1501 with no tier group assignment. A sample of medical records for these CMGs should be reviewed to determine if inpatient admission was necessary or if care could have been provided more efficiently on an outpatient basis or in another setting (e.g., skilled nursing facility or home with home health).”

Third, a high number of outlier payments will raise attention, “This indicates that the facility is submitting a high percentage of claims with outlier payments. Claims with outlier payments should be reviewed to ensure treatment provided was medically necessary. The facility may wish to ensure the ‘cost to charge’ ratio as reported in their annual cost report is correct.”

And fourth, higher percentages of patients readmitted to an acute hospital, after discharge, will draw concerns. “This could indicate that patients are not medically stable or prepared for discharge. The facility may wish to ensure that patient discharge planning is initiated early during patients’ admission and that patients and their families are prepared to handle patient care following discharge. IRF units of short-term acute care hospitals may wish to identify admissions to their short-term acute care hospital within 30 days of discharge and review medical records for those patients.”

As a service, the Office of the Inspector General is providing an annual report to each IRF and IRU to let hospitals see what the OIG sees comparing one hospital to another. When a hospital’s performance percentages for any target area is out of line with its peers, everyone will know and hopefully, take corrective action prior to a visit from a RAC.   Now, this is transparency, and soon we will have another appreciation for compliance.