Federal Data: Using it to Target Hospital Payment Errors  

Kathy M Terry, PhD and Kim Hrehor, MHA, RHIA, CHE

In 1999, Congress initiated a program through the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services, designed to protect the Medicare Trust Fund by measuring the incidence of payment errors for Medicare fee-for-service inpatient short-term acute care.  The Payment Error Prevention Program (PEPP), as it was known, was implemented by CMS through the Quality Improvement Organizations, or QIOs, (then known as Peer Review Organizations, or PROs). 

A random sample of claims submitted to Medicare for inpatient care were selected and reviewed each month, for each state.  Records were, and are, reviewed to ensure that the acute inpatient stay:  1) was reasonable and medically necessary; 2) was provided in the most appropriate setting...