Hospice: New Tool For Assessing Improper Medicare Payments Risk

Members | March 29, 2015

Beginning July 2015, hospice agencies will have a new tool available to help them assess their risk for improper Medicare payments. The PEPPER target areas for hospice have been expanded to include several target areas that have been investigated by the Centers for Medicare and Medicaid Services (CMS), the Office of the Inspector General (OIG) and others, relative to potential overutilization of hospice care for beneficiaries residing in assisted living facilities and nursing facilities.

Beginning July 2015, hospice agencies will have a new tool available to help them assess their risk for improper Medicare payments. 

TMF Health Quality Institute is developing a new Program for Evaluating Payment Patterns Electronic Report (PEPPER) for hospices

The PEPPER target areas for hospice have been expanded to include several target areas that have been investigated by the Centers for Medicare and Medicaid Services (CMS), the Office of the Inspector General (OIG) and others, relative to potential overutilization of hospice care for beneficiaries residing in assisted living facilities (ALFs) and nursing facilities (NFs). 

As the regulatory focus on improper Medicare payments becomes more intense for hospices, this free comparative data report can help providers identify when their billing statistics differ from most other hospices for these 6 target areas:        

Live Discharges

For discharges prior to July 1, 2012:

Numerator (N): count of beneficiary episodes discharged alive by the hospice (patient discharge status code not equal to “40” (expired at home), “41” (expired in a medical facility) or “42” (expired place unknown)) with occurrence code "42" (date of termination of hospice benefit). 

Denominator (D): count of all beneficiary episodes discharged (by death or alive) by the hospice during the report period (obtained by considering all claims billed for a beneficiary by that hospice).

For discharges beginning July 1, 2012:

Numerator (N): count of beneficiary episodes who were discharged alive by the hospice (patient discharge status code not equal to “40” (expired at home), “41” (expired in a medical facility) or “42” (expired place unknown)), excluding:

 

  • Beneficiary transfers (patient discharge status code “50” or “51”).
  • Beneficiary revocations (occurrence code “42”).
  • Beneficiaries discharged for cause (condition code “H2”).
  • Beneficiaries who moved out of the service area (condition code “52”)

 

Denominator (D): count of all beneficiary episodes discharged (by death or alive) by the hospice during the report period (obtained by considering all claims billed for a beneficiary by that hospice). 

Long Length of Stay N: count of beneficiary episodes discharged (by death or alive) by the hospice during the report period whose combined days of service at the hospice is greater than 180 days (obtained by considering all claims billed for a beneficiary by that hospice).

D: count of all beneficiary episodes discharged (by death or alive) by the hospice during the report period.

Continuous Home Care Provided in an Assisted Living Facility 

*new as of the Q4FY14 release  N: count of beneficiary episodes discharged (by death or alive) by the hospice during the report period where at least eight hours of Continuous Home Care (revenue code = “0652”) were provided while the beneficiary resided in an Assisted Living Facility (HCPCS code = “Q5002”).

D: count of all beneficiary episodes ending in the report period that indicate the beneficiary resided in an assisted living facility (HCPCS code = “Q5002”) for any portion of the episode.

Routine Home Care Provided in an Assisted Living Facility 

*new as of the Q4FY14 release  N: count of Routine Home Care days (revenue code = “0651”) provided on claims ending in the report period that indicate the beneficiary resided in an assisted living facility (HCPCS code = “Q5002”).

D: count of all Routine Home Care days (revenue code = “0651”) provided by the hospice on claims ending in the report period. 

Routine Home Care Provided in a Nursing Facility 

*new as of the Q4FY14 release N: count of Routine Home Care days (revenue code = “0651”) provided on claims ending in the report period that indicate the beneficiary resided in a nursing facility (HCPCS code = “Q5003”). 

D: count of all Routine Home Care days (revenue code = “0651”) provided by the hospice on claims ending in the report period.

Routine Home Care Provided in a Skilled Nursing Facility 

*new as of the Q4FY14 release  N: count of Routine Home Care days (revenue code = “0651”) provided on claims ending in the report period that indicate the beneficiary resided in a skilled nursing facility (HCPCS code = “Q5004”). 

D: count of all Routine Home Care days (revenue code = “0651”) provided by the hospice on claims ending in the report period.

*Note: Target Areas may be added or modified at the discretion of the Centers for Medicare and Medicaid Services.

What is PEPPER? 

PEPPER is an educational tool available to providers to help them proactively monitor their claims and work to prevent improper Medicare payments. PEPPER summarizes an hospice’s Medicare claims data in areas that may be at risk for improper Medicare payments. 

It compares the hospice’s statistics with aggregate statistics for the nation, Medicare Administrative Contractor (MAC) jurisdiction and the state. 

If a provider’s statistics are at/above the national 80th percentile the provider is identified as an "outlier" and may be at risk for improper Medicare payments. 

PEPPER cannot identify the presence of improper payments. 

How can I learn more?

A hospice PEPPER user’s guide will be made available on PEPPERresources.org in June, 2015 in the section for Home Health Agencies. 

TMF® will conduct web-based training sessions to help providers understand their report. Join the email list at PEPPERresources.org to receive notifications of training opportunities and report distribution. 

PEPPER is distributed by TMF under contract with the Centers for Medicare and Medicaid Services.