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​​​​​​​​​​​​​​​​​Payment Error Rate Measurement Program​

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The Payment Error Rate Measurement Program (PERM) is designed to measure and report a national improper payment rate annually for Medicaid and the Children's Health Insurance Program (CHIP), as required by the Payment Integrity Information Act (PIIA) of 2019. The program is operating under the PERM final regulation published on July 5, 2017 (Federal Register 82 FR 31158).

Centers for Medicare and Medicaid Services (CMS) uses a 17-State rotation cycle for PERM. Each State is reviewed once every three years. California is a Cycle 2 State and is currently participating in the Review Year (RY) 2023 cycle. The measurement cycles are as follows:

  • Cycle 1 – Arkansas​, Connecticut, Delaware, Idaho, Illinois, Kansas, Michigan, Minnesota, Missouri, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Virginia, Wisconsin, Wyoming.

  • Cycle 2 – Alabama, Califor​​nia, Colorado, Georgia, Kentucky, Maryland, Massachusetts, Nebraska, New Hampshire, New Jersey, North Carolina, Rhode Island, South Carolina, Tennessee, Utah, Vermont, West Virginia.

  • Cycle 3 – Alaska, Arizona, Di​​strict of Columbia, Florida, Hawaii, Indiana, Iowa, Louisiana, Maine, Mississippi, Montana, Nevada, New York, Oregon, Puerto Rico, South Dakota, Texas, Washington.

PERM is comprised of three review components: Fee-for-Service (FFS) paid claims, Managed Care capitation payments, and Eligibility determination. CMS engages three contractors to administer PERM. The contractors for the upcoming PERM Cycle, RY 2026, are listed below:​

  • Statistical Contractor – T​he Lewin Group, Part of Optum Serve

  • Review Contractor – Empower AI, Inc​​​. 

  • Eligibility Review Contractor – Booz Allen Hamilton

For the FFS review component of PERM, randomly selected paid claims will undergo a data processing review to ensure that states are meeting statutory, regulatory or administrative requirements. A medical review will also be conducted on the FFS paid claims to validate the accuracy of the documentation in the medical records.

​​PERM Resources for Providers

PERM Error Rates

Information on the most current and historical PERM error rates can be viewed at the links below.

​All questions concerning PERM can be directed to: PERM@dhcs.ca.gov​​

Last modified date: 7/12/2024 1:45 PM