After a multi-year pause, the Centers for Medicare & Medicaid Services (CMS) has announced the return of the PEPPER.
After a multi-year pause, the Centers for Medicare & Medicaid Services (CMS) has announced the return of the Program for Evaluating Payment Patterns Electronic Report (PEPPER). For Skilled Nursing Facilities (SNFs) this marks the return of a valuable resource for monitoring billing practices, strengthening compliance programs, and identifying potential reimbursement risks before they become regulatory concerns.
While PEPPER has traditionally been viewed as a compliance report, its true value extends far beyond auditing. Organizations that leverage PEPPER effectively can gain meaningful insight into documentation practices, coding accuracy, reimbursement trends, and operational performance.
PEPPER provides facility-specific Medicare claims data for areas identified by CMS as potentially vulnerable to improper payments while also encouraging providers to evaluate their billing practices to help ensure accurate claims are submitted for payment. Facilities can use the data to identify areas where billing practices may need refinement, target areas for auditing and monitoring, evaluate potential coding concerns, and identify trends that could indicate increased compliance or reimbursement risk.
Rather than waiting for an external review to uncover issues, PEPPER allows organizations to perform their own internal assessment using Medicare claims data that may also inform oversight, auditing, and monitoring activity.
What Does PEPPER Show?
PEPPER provides historical Medicare claims data for the most recent three federal fiscal years, allowing organizations to compare their performance against national, Medicare Administrative Contractor (MAC) jurisdiction, and state benchmarks.
The report focuses on specific target areas that CMS has identified as potentially at risk for improper payments. These comparisons can help organizations identify unusual billing patterns, changes in utilization, and opportunities for process improvement.
Why PEPPER Matters
A thorough review of PEPPER can help organizations:
• Identify potential overpayments and underpayments
• Detect coding, documentation, and billing vulnerabilities
• Monitor changes in billing practices over time
• Evaluate trends in length of stay and reimbursement patterns
• Identify areas requiring focused auditing and monitoring
• Recognize potential under-coding or over-coding concerns
• Support revenue integrity and Medicare compliance initiatives
• Strengthen documentation practices across departments
Importantly, PEPPER does not indicate that an error has occurred. Instead, it highlights areas that may warrant additional review and validation.
PEPPER and PDPM: More Relevant Than Ever
As providers continue to navigate the Patient-Driven Payment Model (PDPM), PEPPER can serve as an important tool for evaluating documentation and coding practices that influence Medicare reimbursement.
Areas such as ICD-10 coding accuracy, MDS coding, Section GG performance assessments, nursing documentation, and non-therapy ancillary (NTA) capture all contribute to reimbursement outcomes. Reviewing PEPPER data alongside internal clinical and reimbursement processes can help organizations identify trends that may require additional education, monitoring, or documentation support.
For Skilled Nursing Facilities, this means PEPPER should not be viewed solely as a finance or compliance report. It is most effective when used as an interdisciplinary tool involving MDS coordinators, nursing leadership, therapy teams, coders, compliance professionals, clinical documentation specialists, and revenue cycle team members.
Understanding Outliers
PEPPER compares facility performance against peer organizations using percentile rankings.
Target areas at or above the 80th percentile are considered high outliers.
For areas at risk for under-coding, target areas at or below the 20th percentile may be identified as low outliers.
When evaluating results, facilities should prioritize comparisons in the following order:
- National
- MAC Jurisdiction
- State
Being identified as an outlier should not be viewed as a finding of noncompliance. Rather, it should prompt further investigation to determine whether the underlying documentation, coding, and billing practices support the observed outcomes.
Accessing Your PEPPER
As CMS makes updated PEPPER reports available, facilities should take time now to confirm that the appropriate team members can access the CMS PEPPER Portal through the Identity & Access Management (I&A) system. This helps ensure organizations are ready to review the report, evaluate findings, and act on any areas that may warrant follow-up.
Key Takeaway
The return of PEPPER provides healthcare organizations with an opportunity to move beyond reactive compliance efforts and adopt a more proactive approach to auditing, reimbursement oversight, and operational improvement.
Organizations that regularly review PEPPER findings can identify trends earlier, strengthen documentation practices, validate coding accuracy, and better understand how their billing patterns compare to peers.
In today’s increasingly complex reimbursement environment, PEPPER is more than a report. It is a practical roadmap for compliance, revenue integrity, and continuous improvement.
