The free PEPPER (Program for Evaluating Payment Patterns Electronic Report) is returning.

CMS will soon relaunch the Program for Evaluating Payment Patterns Electronic Report (PEPPER) for all provider types over the next few months. Therefore, you should keep your eyes out for the release of this free and very useful tool.  I had been a fan of the PEPPER for years. Right up to when CMS paused its release in Jan 2024.  PEPPER for short-term Acute Care Hospitals was relaunched in December ’25. Therefore, it was only a matter of time before it was relaunched across other segments of the Medicare program. 

While the PEPPER was available, many agencies never downloaded their FREE reports. I always thought it was a wasted opportunity to identify potential issues within their agency that could help ensure compliance and improve operational results and profitability.   The PEPPER was industry-specific but identified results and comparisons for specific areas for that industry (e.g., CAHs, LTCHs, SNFs, HH, Hospice, etc.). 

For Home Health and Hospice, the PEPPER was historically updated annually: July for Home Health and April for Hospice.  The report focuses on the most recent 12 quarters (3 years).  The reports are prepared using only final claims and are used by CMS to assess potential compliance issues.  HHAs and Hospices should use them for the same reason. 

The following is the CMS notification regarding the PEPPER:

CMS News:

PEPPER Relaunch for All Facility Types: Get Ready Now

CMS will relaunch the Program for Evaluating Payment Patterns Electronic Report (PEPPER) in the coming months for all Medicare facility types, including hospitals, post-acute care providers, and specialty facilities.

PEPPER is a free tool that helps you review your Medicare billing data so you can identify issues early and support accurate claims. You can use PEPPER to:

• Spot billing patterns that may need review or improvement
• Identify areas that may need closer monitoring or internal audits
• Find services that may be under‑coded or over‑coded
• Track trends such as longer patient stays
• Take action before problems arise

Act Now: Get Ready to Access Your PEPPER

Authorized officials (AOs), access managers (AMs), and staff end users (SEUs) can access PEPPER through the PEPPER Portal. 

How to get access as an SEU:

• Sign in to the CMS Identity & Access (I&A) System using your existing NPPES or PECOS credentials.
• Request the PEPPER business function for your organization. The Comparative Billing Report business function is also available and can be requested at the same time.
• Your AO or AM must approve your request.
• Once approved, log in to the portal and download your organization’s report.

Take steps now to make sure you have access when we release your facility’s PEPPER:

• See the I&A System Quick Reference Guide and FAQs: Step-by-step instructions for AOs and AMs
• Contact the External User Services Help Desk for assistance

The following is from the FAQs @ https://pepper.cbrpepper.org/faq.html:

What is PEPPER?

The Program for Evaluating Payment Patterns Electronic Reports (PEPPER) is an electronic report that delivers facility-specific Medicare statistics for discharges and services vulnerable to improper payments. PEPPERs encourage providers to review data about their billing practices to help ensure they submit accurate claims for payment. Facilities can use the PEPPER data to identify where they need to change billing practices, pinpoint areas in need of auditing and monitoring, identify potential Diagnosis Related Group (DRG) under- or over-coding problems, and identify target areas where length of stay is increasing.

What are PEPPER target areas?

Each PEPPER contains statistics for areas identified as at-risk for improper payments, which CMS refers to in the report as target areas. Typically presented as percents, the numerator represents potentially problematic discharges, and the denominator represents discharges for a larger comparison group for a particular area of care. Each PEPPER type includes data on relevant target areas for that hospital or facility group. PEPPER presents data in tabular form and in graphs that depict the facility’s target area percentages over time.

What does it mean if my facility is flagged as an outlier for a specific metric?

PEPPER determines outliers based on preset control limits. The upper control limit for all target areas is the 80th percentile. Coding-focused target areas also have a lower control limit, which is the 20th percentile. PEPPER draws attention to any findings that are at or above the upper control limit (high outlier) or at or below the lower control limit (low outliers) for coding-focused areas only. When interpreting the Compare Targets Report findings, facilities should consider their target area percentile values for the nation, jurisdiction, and state. Percentile values at or above the 80th percentile (for all target areas) or at or below the 20th percentile (for coding-focused target areas) indicate that the facility is an outlier. Outlier status should be evaluated in the following priority order: 1) nation, 2) jurisdiction, and 3) state. The state should have the last priority because it has the smallest comparison group.

Is my facility at risk of an audit if it is flagged as an outlier?

PEPPER does not identify the presence of payment errors, but facilities can use it as a guide for auditing and monitoring efforts. A facility can use PEPPER to compare its claims data over time to identify potential areas of concern, including significant changes in billing practices, possible over- or under-coding, and changes in length of stay.

Who is my facility data compared to in a PEPPER?

The Compare Targets Report displays the facility’s number of target discharges, percent, percentiles as compared to the nation, jurisdiction, and state, and the “Sum of Payments.”

Conclusion

The PEPPER was a significantly underutilized yet free resource available to all Medicare patient care providers. In fact, many providers did not even know the report existed. Nonetheless, it was a valuable tool that could help organizations identify potential compliance issues and help agencies improve their operational and financial results. It may not be easy to understand at first, but once understood, it could become a valuable tool for your agency(ies).

If you have any questions or need assistance understanding the information presented in these reports, please contact us at your earliest convenience to discuss.