Study guide
12.2 PEPPER, Forecasting, Hospital Financial Data, and Public Reporting
Certified Clinical Documentation Specialist CCDS
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1 Introduction & Exam Overview
1.1 Current Exam Facts 1.2 Eligibility Pathways and the 2,000-Hour Year 1.3 Allowed Resources and Test-Day Rules 1.4 Recertification, Fees, and How This Guide Maps the Eight Domains
2 IPPS Foundations
2.1 How IPPS Works and How CMS Updates It 2.2 MS-DRG Assignment, Relative Weights, and Grouping 2.3 Provider and Clinical Staff Documentation Duties under IPPS
3 Severity, CMI, Medical Necessity, and Oversight
3.1 CC versus MCC Recognition and CC Exclusion Lists 3.2 Case Mix Index and Why CDI Tracks It 3.3 Two-Midnight Rule, Medical Necessity of Setting, and Principal Diagnosis 3.4 MAC, RAC, CERT, OIG, and Denial-Vulnerable Practices
4 Nervous and Respiratory System CDI
4.1 Nervous System Conditions for CDI 4.2 Acute and Chronic Respiratory Failure, ABGs, and Ventilation Support 4.3 Pneumonia, COPD, PE, Pleural Effusion, and Respiratory Infections
5 Circulatory, Digestive, Hepatobiliary, Musculoskeletal, and Skin CDI
5.1 Circulatory Disorders 5.2 Digestive and Hepatobiliary Disorders 5.3 Musculoskeletal and Skin
6 Endocrine, Nutrition, Kidney, and Hematologic CDI
6.1 Diabetes, Dehydration, and Obesity 6.2 Malnutrition Criteria, Severity, and Audit Risk 6.3 AKI, CKD Staging, UTI, and Urinary Stones 6.4 Anemia, Coagulation, Sickle Cell, Lymphoma, and Leukemia
7 Infectious Disease, Other MDCs, and Clinical Indicator Tools
7.1 Sepsis, Severe Sepsis, Postoperative and Other Infections 7.2 Mental, Substance Use, Injuries/Toxicology, and HIV-Related Conditions 7.3 Medications, Diagnostic Tests, and Abbreviations as Clinical Indicators
8 Health Record Elements and Query Triggers
8.1 Which Record Elements Support Diagnosis and Procedure Codes 8.2 Attending versus Radiologist, Pathologist, and Other Providers 8.3 When a Physician Query Is Warranted 8.4 When Queries Are Not Appropriate
9 Query Timing, Verbal Queries, Formats, and Clinical Indicators
9.1 Concurrent, Retrospective, Pre-Bill, and Prospective Timing 9.2 Verbal Queries and Required Documentation 9.3 Open-Ended, Multiple-Choice, and Yes/No 9.4 Clinical Indicators and How to Source Them
10 Compliant Query Practice and Clinical Validation
10.1 Compliant versus Leading and Other Noncompliant Queries 10.2 ACDIS/AHIMA 2026 Guidelines for Achieving a Compliant Query Practice 10.3 Clinical Validation and Diagnoses without Clinical Support
11 CDI Program Metrics
11.1 Productivity, Query Volume, and Provider Response Rates 11.2 CMI, CC/MCC Capture, and High-Frequency DRGs 11.3 SOI/ROM as CDI Program Performance Metrics
12 Physician Metrics, PEPPER, Forecasting, and Public Data
12.1 Measuring Physician Documentation Performance 12.2 PEPPER, Forecasting, Hospital Financial Data, and Public Reporting
13 CDI Roles, Coder Collaboration, and Physician Education
13.1 Roles and Responsibilities of the CDI Specialist 13.2 Coder Roles Working with a CDI Department 13.3 Physician Education Tools, Forms, and Presentations
14 Provider Communication and DRG Reconciliation
14.1 Non-Confrontational Communication and When Verbal Beats Written 14.2 Working DRG versus Final DRG Reconciliation
15 Official Guidelines, Principal Diagnosis, and Secondary Diagnosis
15.1 Official Guidelines, Cooperating Parties, Updates, and AHA Coding Clinic 15.2 Principal Diagnosis Selection 15.3 Secondary Diagnosis Reporting Criteria
16 Sequencing, Coding Conventions, and POA Indicators
16.1 Sequencing When Two Diagnoses Equally Meet PD; Working DRG with Multiple Diagnoses 16.2 Integral Signs/Symptoms, the With Convention, and Uncertain Diagnoses 16.3 Present-on-Admission Indicator Assignment and Payment Impact
17 Hospital-Acquired Conditions, Disposition, and ICD-10-PCS Essentials
17.1 CMS Hospital-Acquired Condition Payment Provision 17.2 Discharge Disposition, Transfer Payment, Principal Procedure, and ICD-10-PCS Essentials
18 Ethics, Privacy, and Leading Queries as Compliance Failures
18.1 ACDIS Code of Ethics and CDI Goals beyond Reimbursement 18.2 HIPAA, Minimum Necessary, and Record Confidentiality 18.3 Leading Queries as a Compliance Failure
19 DRG Creep, OIG Oversight, PEPPER, and the False Claims Act
19.1 DRG Compliance, DRG Creep, and the OIG Work Plan 19.2 PEPPER Compliance Risks and the False Claims Act
20 Mortality Index, Observed-to-Expected Ratios, and Quality Data Sources
20.1 Documentation Impact on Mortality Index (SOI/ROM) 20.2 Mortality Reviews and Observed-to-Expected Ratios 20.3 Abstracted versus Claims-Based Quality Data
21 CMS Quality Programs, PSIs, and Infection versus Complication Codes
21.1 HVBP, HAC Reduction Program, HRRP, 30-Day Mortality, and Hospital IQR 21.2 PSI 90 Components and PSIs beyond the Composite 21.3 Healthcare-Associated Infections versus Complication Codes
12.2 PEPPER, Forecasting, Hospital Financial Data, and Public Reporting
Key Takeaways Explain This Topic AI
PEPPER is a CMS contractor Excel comparative billing report of facility-specific Medicare statistics for CMS-chosen target areas; it does not by itself prove an improper payment
Read the current release user guide for target-area definitions and comparison groups; do not memorize an old target list as if it were permanent
High outlier status is commonly at or above the 80th percentile versus nation, MAC jurisdiction, or state; coding-focused areas also use a 20th-percentile low-outlier lens
Forecast CMI and query impact in a spreadsheet with current IPPS relative weights and honest response assumptions; treat the output as a planning range, not guaranteed revenue
Physician documentation and the resulting coded claims influence publicly reported hospital data, including CMS Care Compare (formerly Hospital Compare), Leapfrog, and Healthgrades
Last updated: September 2026
12.2 PEPPER, Forecasting, Hospital Financial Data, and Public Reporting
Quick Answer: The Program for Evaluating Payment Patterns Electronic Report (PEPPER) is a Centers for Medicare & Medicaid Services (CMS) contractor comparative billing report : a hospital-specific Microsoft Excel file of Medicare statistics for CMS-chosen target areas . Compare your percents with the nation , Medicare Administrative Contractor (MAC) jurisdiction, and state . High outlier status is commonly at or above the 80th percentile ; coding-focused areas also use a 20th percentile low-outlier lens. An outlier is not a payment error. Forecast CMI and query impact with spreadsheets and current Inpatient Prospective Payment System (IPPS) relative weights. Documentation and coded claims also feed public sites such as Care Compare (formerly Hospital Compare ), Leapfrog , and Healthgrades . Always use the current PEPPER user guide for target definitions; do not memorize an unpublished or outdated list.
The ACDIS inpatient CCDS outline asks for a working knowledge of PEPPER data, the ability to create forecasting data, basic computer and spreadsheet skills, hospital-specific financial data, and an explanation of how physician documentation affects publicly reported data (the handbook examples include Leapfrog and Healthgrades). This independent ExamFinch section teaches those analysis tools for inpatient IPPS CDI. It is not an ACDIS product.
What PEPPER is—and what it is not
PEPPER summarizes provider-specific Medicare claims statistics for discharges and services that CMS treats as vulnerable to improper payment because of billing, Medicare Severity Diagnosis Related Group (MS-DRG) coding, and/or admission-necessity issues. Target areas are determined by CMS. Each target is a ratio : a numerator of discharges CMS wants watched, over a denominator that is the larger related group. The file typically lets you review several federal fiscal quarters—often described as about three years of statistics—so you can see movement, not one isolated percent.
Authorized users download the hospital's report from the CMS PEPPER portal. CDI specialists usually receive a copy from compliance, health information management, or finance rather than administering portal passwords. Short-term acute care (ST) PEPPER is the flavor that matches IPPS hospitals on this exam. Critical access, long-term, and post-acute PEPPERs exist; do not mix their target lists into an inpatient CCDS answer.
PEPPER does not identify the presence of payment errors . It does not recoup money. It does not replace a Recovery Audit Contractor review. Formal tests of statistical significance are not used to assign outlier status. Treat it as a prioritization tool for auditing and monitoring.
Percentiles, comparison groups, and the method
For each target area, PEPPER compares the hospital's target percent with other hospitals in the nation , the MAC jurisdiction , and the state . Current short-term user guides describe a Compare Targets view in which a high outlier (at or above the 80th percentile ) is emphasized (commonly red bold type) and a low outlier on coding-focused targets (at or below the 20th percentile ) is emphasized (commonly green italics). If fewer than 11 hospitals in the state or jurisdiction have reportable data for that target, those percentiles may display as zero. Reports display target-area data only when the release's minimum case-count threshold is met. No reportable data for a quarter may appear as unavailable, not as a hidden passing score.
Method, not memorized appendix. CMS has paused, limited, and later expanded short-term PEPPER releases; target-area sets change. A slide deck from a prior year is not the current report. The CCDS skill is:
Obtain the current Excel PEPPER and that same release's user guide .
Read each target's numerator and denominator for that release.
Note whether the target is coding-focused or admission-necessity-focused ; the audit sample differs.
Compare your percent with nation, jurisdiction, and state, and look at the trend across quarters.
If you are an outlier, sample records . For coding-focused targets, review documentation, code assignment, and CC/MCC logic. For admission-necessity targets, review medical necessity of the inpatient stay and setting. Do not "fix" a percentile by changing codes without a record that supports the change.
Record the sample findings in a spreadsheet and remeasure on the next PEPPER.
You may see coding-focused families such as pneumonia, septicemia, stroke-related groupings, ventilator support, or CC/MCC concentration on a given release, and admission-necessity families such as short stays or selected procedures. Those examples illustrate types . They are not a promise that every named family appears on the sitting or on next quarter's file. If a question asks for the current national target list, the correct move is to consult the current user guide, not to recite a frozen inventory.
PEPPER finding What it is What it is not CDI next step
Target percent at or above the 80th percentile vs a comparison group High-outlier flag on that target Proof of overcoding or a CMS denial Sample records; match the audit to coding vs admission-necessity
Coding-focused percent at or below the 20th percentile Low-outlier flag on that coding target Proof of undercoding on every case Sample for missed specificity or missed CC/MCC that the record supports
Nation vs jurisdiction vs state percentiles Three comparison lenses in the same file Interchangeable; a state with few hospitals may show zeros Use all three; investigate if any lens shows an outlier
Quarter-to-quarter movement Trend in billing/coding/admission patterns A CMI forecast by itself Pair with internal query, CMI, and unspecified-code trends
Forecasting CMI and query impact
Forecasting in CDI is a planning range , not a promise to the chief financial officer. Start from cases, not from a slogan.
Hospital Medicare CMI for a period is the sum of MS-DRG relative weights for the included discharges, divided by the number of those discharges. Relative weights come from the current fiscal year IPPS tables CMS publishes. Do not invent a weight, and do not reuse last year's table after the October update without checking.
A simple query-impact sketch uses case-level rows:
Working MS-DRG and its relative weight.
Plausible alternative MS-DRG if a pending query is answered and coded as expected.
Delta = alternative weight minus working weight.
Expected delta = delta × historical response rate × historical agreement rate for that query type (or a conservative range).
Forecast CMI movement ≈ sum of expected deltas ÷ expected discharges.
Work a numeric skeleton without inventing a published weight. Suppose 1,000 Medicare discharges and a current CMI of 1.6200. If a set of heart-failure queries is expected, after response and agreement, to add a total of 8.0 relative-weight points across the quarter, the sketched CMI lift is 8.0 / 1,000 = 0.0080, to about 1.6280. If response is weaker than last quarter, rerun the same sheet at a lower response assumption. Report a range , and list what would falsify it: CC exclusion, a coder who cannot assign the diagnosis, a clinical disagreement, or a later denial.
Never multiply "queries sent" by an unpublished national conversion factor. Never substitute ExamFinch practice-bank size for CMI. Never treat PEPPER outlier status as a dollar figure.
Basic spreadsheet skills that the outline actually tests
The content outline names basic Excel-style skills because PEPPER arrives as a workbook and because physician and CMI trends live in tables. You are not sitting an Excel certification. You should be able to:
Keep one row per query or per discharge with dates, provider, response type, working and final MS-DRG, relative weight, and an unspecified-code flag.
Compute response rate with counts (for example, count of non-blank response dates divided by count of queries).
Use a PivotTable (or equivalent) to slice by provider, service, and month.
Calculate percent change: (new − old) / old.
Chart CMI, non-response volume, and a PEPPER target percent across quarters.
Filter and sort; freeze the header row; avoid hard-coding a target-area name that a later PEPPER release retired.
Those functions turn a dump of queries into a trend. A screenshot of last month's dashboard is not forecasting.
Hospital-specific financial data
"Hospital-specific" means this facility's numbers, not a national blog average. IPPS operating payment for a case is conceptually a standardized amount (base rate) times the MS-DRG relative weight, with geographic and other adjustments CMS publishes. Finance may share a blended average payment or contribution figure; use that figure if you are allowed to see it. Do not guess a base rate.
Other financial files CDI actually uses include documentation- or coding-related denial dollars, length of stay in PEPPER-flagged MS-DRG families, and the share of Medicare volume in high-weight families you are educating on. The point of applying financial data is to prioritize education and audit time, and to explain why complete documentation changes both payment and the coded dataset that quality reports consume. It is not a license to write reimbursement language into a query.
Public reporting: Care Compare, Leapfrog, Healthgrades
Physician documentation becomes coded claims (and, for some measures, abstracted events). Public sites then republish hospital performance, often on a lagged measurement period. Always read the dates on the public page.
CMS Care Compare on Medicare.gov is the current consumer hospital-quality site. CMS first reported many of these measures on Hospital Compare ; CDI materials and the CCDS outline's sibling credential still use that older name. Care Compare displays complications, mortality, readmissions, infection measures, patient experience, and overall star ratings, among other topics. Many of those measures use Medicare claims or other datasets that start with diagnoses, procedures, and POA indicators.
The Leapfrog Group publishes a Hospital Safety Grade (letter grades, issued on a regular cycle) and a separate hospital survey. Safety Grade methodology mixes process and outcome measures; several inputs draw on CMS data such as infections and patient-safety indicators. Incomplete or unspecified documentation, missing POA, and complication coding can move claims-based inputs even when bedside care did not change.
Healthgrades is a commercial rating and comparison publisher. It uses Medicare claims among other sources for many hospital rating products. CDI does not control Healthgrades' proprietary formulas, but CDI does influence the documented conditions that appear on the claims those formulas ingest.
Public reporting is not identical to CMS pay-for-performance programs such as Hospital Value-Based Purchasing or the Hospital-Acquired Condition Reduction Program; those formulas belong with Domain VIII. The Domain IV skill is that documentation and coded data are visible outside the hospital , so physician performance and PEPPER-style coding patterns have reputational as well as payment consequences.
Loading diagram... From current PEPPER file to forecast and public-data watch
Exam-style scenarios
Scenario: red bold, no denial letter. Compare Targets shows a coding-focused target in red bold at the 82nd national percentile. A colleague says CMS has already decided the hospital overcoded. The accurate reading is high-outlier status versus the comparison group, which is a reason to sample records. It is not a recoupment and not proof of error. If the sample shows supported CC/MCC diagnoses, the "fix" is not to strip codes to chase a lower percentile.
Scenario: last year's target list. A binder lists PEPPER targets from a release that predated a program pause and a later limited rebuild. Using that list to design this year's audits skips the method. Open the current user guide, confirm numerators, and only then pull the internal cases that match this definition.
Scenario: forecast as a guarantee. An analyst multiplies 200 queries by a homemade "$4,000 per MCC" factor and presents a single revenue number to finance. That is not CCDS-style forecasting. Use case-level relative-weight deltas from the current IPPS table, haircut by actual response and agreement, and present a range with assumptions.
Scenario: public grade shock. Leapfrog issues a lower Safety Grade while Care Compare still shows older measurement dates. The CDI question is which coded and abstracted inputs moved, and whether documentation of severity, complications, and POA in the period those sites actually used explains part of the change—not whether last week's queries have already appeared on Medicare.gov.
How to study this section
Recall: PEPPER is a CMS contractor comparative Excel report; 80th/20th percentile flags; outlier ≠ error; Care Compare is the current CMS hospital site formerly called Hospital Compare; Leapfrog and Healthgrades are additional public publishers influenced by documentation and claims. Application: given a percentile color or a CMI sketch, choose sample-and-trend rather than recoup-or-guarantee. Analysis: choose the current user guide over a memorized target list, and choose hospital-specific weights and rates over invented multipliers.