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Payment Error Rate Measurement (PERM)


The Centers for Medicare & Medicaid Services (CMS) implemented the Payment Error Rate Measurement (PERM) program to measure improper payments in the Medicaid program and the State Children's Health Insurance Program (SCHIP). PERM is designed to comply with the Improper Payments Information Act of 2002 (IPIA; Public Law 107-300). For PERM, CMS is using a national contracting strategy consisting of three contractors to perform statistical calculations, medical records collection, and medical/data processing review of selected State Medicaid and SCHIP fee-for-service (FFS) and managed care claims. In FY 2006, CMS reviewed only fee-for-service Medicaid claims; however, in FY 2007, CMS expanded PERM to include reviews of fee-for-service and managed care claims, as well as beneficiary eligibility, in both the Medicaid and SCHIP programs.

What's New:

Difference Resolution Process Update
CMS has finalized the difference resolution process and the full document can be view under the difference resolution tab. It reflects recent changes in disputing insufficient documentation (MR2) errors, as well as finalizes the process for recovering the Federal matching funds found in error.

New PERM 101 documents
Three new PERM 101 documents are released as an overview of the PERM process. The 3 documents include a brochure, a flowchart, and a handout document. States are encouraged to use the documents to educate their stakeholders on the PERM process.

New PERM Policies and Corrective Action Process Webpages
A PERM Policies webpage has been created to keep the States up-to-date with the new operational policies and guidance that are developed to refine the PERM program. A new Corrective Action Process webpage has also been developed to assist States in preparing for their corrective action plans. Please refer to these pages for more updates.

CMS Publishes the Final PERM Rule
CMS published the final rule for PERM on August 31, 2007. This regulation responds to public comments on the August 28, 2006 interim final rule and sets forth State requirements for submitting claims and policies to the CMS Federal contractors for purposes of conducting fee-for-service and managed care reviews. This final rule also sets forth the State requirements for conducting eligibility reviews and estimating case and payment error rates due to errors in eligibility determinations.

Update on Eligibility Processes
If a State has contracted with an insurance agency to provide health insurance coverage to its Medicaid/SCHIP recipients for a monthly premium, but also makes fee-for-service payments for these recipients, the State should collect the monthly premium paid to the insurance agency AND all other payments made for services in the month for the payment review.

FY 2006 National Medicaid Fee-for-Service Error Rate
CMS will report a preliminary FY 2006 National Medicaid fee-for-service error rate based on data from Quarters 1 and 2 in the FY 2007 Performance and Accountability Report (PAR). Final FY 2006 error rates will be reported in the FY 2008 PAR.

PERM DDC Website
States can now check the status of requests for provider medical records made by the PERM documentation/database contractor. Livanta has developed a secure website that allows States to monitor the attempts to obtain medical records for each sampled claim, and whether the records have been received, are still outstanding, or additional documentation has been requested. The link for the new tracking system can be found in the PERM Process section of this website, and Livanta will be emailing each State with its user name and password.

PERM RC Website
The PERM review contractor, HealthDataInsights, has created a web based application to track and report the sampling unit findings for the Medicaid fee-for-service claims reviewed in the FY2006 cycle. The link for the State Medicaid Error Rate Findings (SMERF) system can be found in the PERM process of this website.

PERM Eligibility Tracking Tool Website
The PERM Eligibility Tracking Tool (PETT) website is now available for FY 2007 States to submit their eligibility reporting forms. The eligibility reporting form templates as well as the instructions for using the website are located in the "Project Files" portion of the PETT website. The link for PETT is located in the Eligibility Reviews section of this website

PERM Cycle Calls
CMS has begun hosting a series of monthly teleconferences for the FY 2006 and FY 2007 PERM cycle States. All States in each of the respective cycles are invited to participate and may contact the American Public Human Services Association (APHSA) for further details about the calls.

PERM Technical Advisory Group (TAG) Meeting
The first PERM TAG meeting was held on May 7. Topics discussed included MEQC-PERM integration, and an introductory discussion on Medi-Medi, PERM, and the One-PI database. The TAG will hold 4 to 12 regularly scheduled meetings per year. The minutes of the PERM TAG will be available on the APHSA website (see Related Links Outside of CMS, below).


PERM FY2007 Contact Information [PDF, 22KB]

PERM FY2008 Contact Information [PDF, 22KB]
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Page Last Modified: 04/14/2008 8:53:03 AM
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