PERM was developed to comply with the Improper Payments Information Act (IPIA; Public Law 107-300) of 2002 which requires each federal agency to:
- Annually identify programs that may be susceptible to significant and improper payments.
- Estimate the amount of improper payments.
- Submit the estimated amounts to Congress.
- Submit a report on actions the agency is taking to reduce the improper payments.
PERM is administered by the Department of Health & Human Services (HHS) by the Centers for Medicare & Medicaid Services (CMS) with guidance from various oversight bodies including the Office of Management and Budget (OMB), and the Office of the Inspector General (OIG).
Under PERM, reviews will be conducted in three areas: (1) fee for service claims (FFS); (2) managed care claims; and (3) program eligibility. The fee for service claims review component also includes a medical review.
The program uses a national contracting strategy to conduct the fee for service and managed care claims review components. This strategy utilizes the following contractors:
- The Lewin Group - Statistical Contractor (SC).
- AdvanceMed – Review Contractor (RC).
- Booz Allen Hamilton - Eligibility Contractor (EC)