Do you recall receiving a postcard from the Health Quality Institute in July notifying you about a report being sent to all skilled nursing facilities in late August? Are you wondering what to do with your “PEPPER” report?

What is PEPPER?

The SNF PEPPER or “Program for Evaluating Payment Patterns Electronic Report” summarizes Medicare claims data to identify risk for abuse or improper payment. PEPPER compares a SNF’s claims data with aggregate statistics for other SNFs in the state, MAC/FI jurisdiction and the nation.

SNFs with high billing patterns (at or above the national 80th percentile) are identified as “outliers.” Outliers are encouraged to ensure compliance with Medicare payment policy, that services provided are medically necessary, and that medical record documentation supports the services that are billed.

PEPPER cannot identify the presence of improper payments. Only a review of the medical record can determine whether services are medically necessary and appropriately billed.

Which areas will be targeted?

PEPPER Target Areas for Skilled Nursing Facilities: The following table shows the six target areas that are identified for SNF reporting. 

The details on the definitions of each Numerator and Denominator can be found online at

When will you be PEPPERED? 

How to get prepared

Training and resources to help skilled nursing facilities use and understand PEPPER are under development. TMF Health Quality Institute, under contract with the Centers for Medicare & Medicaid Services, will develop web-based and will be available on its website. ( 

What does this mean to you and how can you respond:

Being an outlier in these categories equates to increased scrutiny. Many initiatives of ACA focus on fraud and abuse prevention. Your mandated compliance program should include these six areas; your own monitoring and detection program can ensure accuracy of the RUG billed and consistent and supportive medical record documentation.

Steven Littlehale is a gerontological clinical nurse specialist, and EVP and chief clinical officer at PointRight Inc.