Federal Payment Error Rate Measurement (PERM)

Introduction:

California is one of 17 States selected by the Centers for Medicare & Medicaid Services (CMS) for the Payment Error Rate Measurement (PERM) program for Federal Fiscal Year (FFY) 2013  (October 1, 2012 - September 30, 2013). For FFY 2013, CMS will measure Medicaid (Medi-Cal) fee-for-service paid claims, managed care capitation payments, and beneficiary eligibility for accuracy.

Helpful Links Outside of DHCS - A&I

Centers for Medicare & Medicaid Services PERM Web Site

Downloads

Final Rule (PDF, August 2010, 252KB)

Final Rule (PDF, August 2007, 203KB)

Improper Payments Information Act of 2002

Improper Payments Elimination and Recovery Act

(Above PDF files provided by CMS)

Who can I contact at the Department of Health Care Services if I have more questions?

Should you have more questions about PERM, feel free to e-mail the Department of Health Care Services - Audits & Investigations at PERM@dhcs.ca.gov.

Why is PERM required?

·         PERM is required by CMS pursuant to the Improper Payments Information Act of 2002 (IPIA; Public Law 107-300).

·         The IPIA directs Federal agencies to annually review its programs and report the improper payment to Congress.

·         Medicaid is a Federal program potentially identified as a program at risk for significant erroneous payments; therefore,

·         CMS must provide estimates of the accuracy of medical payments made by Medicaid as part of their annual budget request using PERM.  

Why are States required to participate in PERM?

States are required to participate under the statutory provisions of section 1902(a)(27) of the Social Security Act (the "Act"). The Act requires states to:

• Submit expenditures, claims data, medical policies and processing manuals and other necessary information for, among other purposes, identifying improper payment.
• Submit corrective action reports for the purpose of reducing their payment error rates.

How will PERM be implemented?

CMS will use a national contracting strategy involving at least two contractors:

• Statistical Contractor - The Lewin Group
• Medical Review Contractor – TBD

What reviews will be included in PERM?

Randomly selected fee-for-service paid claims and managed care capitation payments will undergo a Data Processing Review to determine the accuracy of the claims processing systems. A Medical Review will also be conducted on the fee-for-service paid claims to validate the accuracy of the documentation in the medical records.  The eligibility review identifies payments made in error for services to beneficiaries based upon incorrect eligibility determinations.