Understanding the PEPPER: “My Patients Are Sicker Than Everyone Else’s Patients”

June 21, 2023 | By Dr. Ronald Hirsch


We have all heard it time and time again. In fact, I recall telling my hospital’s chief medical officer that I treat sicker patients than others to explain why my average length of stay was longer than that of other internists on the medical staff. The difference, of course, was that for my patients it was true, but not for the other doctors. 

When I review Program for Evaluating Payment Patterns Electronic Reports (PEPPER) with hospitals, I always point out that PEPPER data is comparative data and not a measure of doing things right or wrong. The PEPPER includes measures of the percentage of medical and surgical inpatients whose claims included a CC or MCC (comorbid condition and complication and major comorbid condition and complication). 

A hospital with a “sicker” patient mix, with service lines that care for more complex patients, or a tertiary or quaternary care center, can expect to have a more complex patient population and therefore have more patients with CCs and MCCs. They also would expect to have a higher case mix index (CMI). 

CMI, though, is simply an average of the case weights for all inpatients: a number derived from the weight assigned to each Diagnosis-Related Group (DRG), which in turn comes from the principal diagnosis and the presence or absence of just one CC or MCC on the claim. Hospital administrators like the CMI because it translates directly to revenue. 

Improve documentation, move DRGs to higher-weighted DRGs, such as moving a simple pneumonia to a complex pneumonia, or add a CC or MCC to a baseline DRG, and the payment from Medicare increases. 

Read Dr. Hirsch’s full article here. 


Author Bio: Dr. Ronald Hirsch is vice president of the Regulations and Education Group at R1 RCM Inc. Dr. Hirsch was a general internist and HIV specialist and practiced at Signature Medical Associates, a multispecialty practice located in Elgin, IL. He was medical director of case management at Sherman Hospital in Elgin, IL, from 2006 to 2012, where he was chairman of the Medical Records Committee from 1995 to 2012 and served on the Medical Executive Committee. Dr. Hirsch is certified in Health Care Quality and Management by the American Board of Quality Assurance and Utilization Review Physicians, certified in Revenue Integrity by the National Association of Healthcare Revenue Integrity, and on the Advisory Board of the American College of Physician Advisors. He is on the editorial board of RACmonitor.com. He is the co-author of The Hospital Guide to Contemporary Utilization Review, with the third edition published in 2021. 

Subscribe to our email list to get the latest in your inbox