Malnutrition Now on PEPPER

Auditors appear to be hungry to deny.

Right on schedule, the Centers for Medicare & Medicaid Services (CMS), through their contractor, has released the latest Program for Payment Patterns Electronic Report (PEPPER) data to short term acute care hospitals, containing hospital-specific date from the third quarter of fiscal year 2021. While the report continues to address the usual topics, they have added a new topic, “Severe Malnutrition” which should garner significant attention.

It should not come as a surprise to anyone that malnutrition would be a topic for inclusion. As they note in their user guide, in 2020, the Office of the Inspector General issued a report entitled, “Hospitals Overbilled Medicare $1 Billion by Incorrectly Assigning Severe Malnutrition Diagnosis Codes to Inpatient Hospital Claims.” All those working with clinical documentation also know the controversy and confusion around malnutrition diagnosis and coding.

Malnutrition can be reported with several codes in the E40 to E46 range, depending on the clinical circumstances. Some of those codes, E40-E43, are MCCs (major comorbidities and complications) and some are CCs, meaning they could affect hospital payment. Likewise, some of the codes map to an HCC (hierarchal condition category) and can affect payment programs that use the HCC paradigm. As with all other CCs and MCCs, the presence of other codes can affect the influence of the malnutrition code on payment. In other words, if the patient has a diagnosis of severe malnutrition, E43, and also diabetic ketoacidosis and acute respiratory failure, the presence or absence of E43 as an MCC will still leave two MCCs and not affect the DRG or the payment. On the other hand, the patient who is hospitalized for cellulitis of the leg and has E43 as the only MCC, the removal of the MCC would result in a significant change to the DRG and payment.

As with all PEPPER measures, it is important to understand what they are reporting and how to interpret the data. For this measure, the PEPPER reports as the numerator the number of inpatient admissions where the malnutrition code E40-E43 is the only MCC on the claim. In other words, if that code was removed, the DRG would change and the payment to the hospital would decline. The denominator is the total number of inpatient claims with E40 to E43, whether it was the only MCC or not. In the example above, the patient with E43 and diabetic ketoacidosis would be included in the denominator but not the numerator.

Now you must look at your data and determine what it means. As with all PEPPER measures, the data do not tell you if you are doing things right or wrong. It simply compares your data to other hospitals in your state, your MAC jurisdiction, and the nation. You may be a high outlier, in the top 5% of the nation, but if every one of your claims with E40-E43 as the only MCC has robust clinical documentation to support the diagnosis, then you have nothing to fear. Likewise, if you are a low outlier, it may be that the vast majority of your severe malnutrition patients have other major comorbid conditions or complications. Clinically, that makes sense since patients with severe malnutrition are at increased risk for a myriad of complications and malnutrition is also a consequence of many chronic diseases. I am reluctant to mention it but since people will ask, the PEPPER data show that the national average rate of admissions with E40-E43 as the only MCC is 36.1% over the last year.  

So what should you do with this new measure? Contrary to what you may have heard, the auditors do not use the PEPPER to choose who to audit; they have a separate, much more robust database. But if you are a high outlier on PEPPER, then your data on those other databases probably show a similar pattern. You may want to select a sample of charts to audit to determine if the diagnosis is clinically valid. And while doing that, you should see if any other MCCs were missed. Your internal audit plan should address what to do if you find errors.

If you are a low outlier, this may be one of those instances where it is a good thing, indicating your doctors are thorough in their documentation and never miss a codable diagnosis. But you may also want to talk to your nutrition support team and ask them to watch for patients where they feel the diagnosis of malnutrition was clinically present but not properly documented. Also remember that facility size does matter. If your facility has less than 11 admissions with E40-E43 as the only MCC, your data fields will be blank so depending on your denominator you may see no data whatsoever and be perfectly “average.” In this case, the omission of data, due to CMS data restrictions, provides you no useful information at all, giving you more time to ponder the rest of the PEPPER data.

Programming Note: Listen to Dr. Ronald Hirsch report this story live during Talk Ten Tuesdays, Tuesday, Dec. 14, 10 Eastern.