For those who don’t know, the acronym means Program for Evaluating Payment Patterns Electronic Report, which provides summary statistics of administrative claims data on the Centers for Medicare & Medicaid Services (CMS) target areas (areas likely to have payment errors due to billing, MS-DRG coding and/or admission necessity issues). This electronic report contains hospital-specific data statistics for 13 Medicare severity diagnosis-related groups (MS-DRGs) and discharges that have been identified as high risk for payment errors for every hospital.

PEPPER is a Microsoft Excel spreadsheet program that can be opened and saved to a PC. It is not intended for use on a network but may be saved to as many PCs as necessary. For help using this program, go to and request assistance by clicking on the “Help/Contact Us” tab at the top of the page. This web site also contains many educational resources to assist hospitals.


Please do not contact your state Medicare Quality Improvement Organization for assistance with PEPPER, as they are no longer involved in the production or distribution of PEPPER.

More About PEPPER

The Hospital Payment Monitoring Program (HPMP) Quality Improvement Organization Support Center (QIOSC)-also known as TMF Health Quality Institute-develops the PEPPER under contract with the CMS. The quarterly electronic report provides comparative data reports to short-term and long-term, acute-care inpatient prospective payment system (PPS) hospitals and to Medicare administrative contractors and fiscal intermediaries in support of efforts to reduce Medicare fee-for-service improper payments.

How PEPPER Helps Hospitals

According to the PEPPER Web site, the report supports hospital compliance efforts by identifying where it is an outlier for the risk areas-data that can help identify both potential overpayments and underpayments. The report prioritizes findings to provide guidance on the areas that a hospital may want to focus auditing and monitoring efforts.

Hospitals may use PEPPER to do the following:


  • Review their data for the current quarters and the previous three fiscal years for each of the CMS target areas;
  • Compare their performance to that of other short-term-care hospitals in their state (or in the nation, in the case of long-term care hospitals);
  • Compare their own data across years to identify significant changes in billing practices, pinpoint areas in need of auditing and monitoring, identify potential MS-DRG under- or over-coding problems, and identify target areas where length of stay is increasing.

To reduce or eliminate any surprises when the recovery audit contractors (RAC) come to call, hospitals are encouraged to conduct regular audits to ensure that the medical necessity for admission and treatment is documented and that bills submitted for Medicare services are correct.


About the Author

Barbara Vandergrift, RN, BSN, MA, is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

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