Payment Error Rate Measurement
Payment Error Rate Measurement Program (PERM)
Established by the federal government, 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; and,
- 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 are 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 Medical Review Process
New York State participates in the PERM program every third year. To conduct the review, CMS contracts with a Review Contractor that requests documentation from a sample of providers to verify Medicaid payments within a one-year review period, which runs from July 1 through June 30. PERM serves to determine if claims were correctly paid or should have been denied according to Medicaid policy. Providers are allowed 75 days to provide the required medical documentation to the Review Contractor. If the medical documentation is not received, or if submitted documentation was determined to be insufficient, an error will be assessed to New York State.
The New York State Office of the Medicaid Inspector General (OMIG) requires that selected providers send a duplicate copy of the documentation to the agency. This allows OMIG to work with the Review Contractor to resolve any errors that were based on medical records deemed insufficient or not received by the Review Contractor.
The New York State Office of the Medicaid Inspector General has the authority to collect medical documentation under the New York Public Health Law Section 32, Subsections 9 and 10, as well as under Regulations 18 NYCRR 515.2(b)(6) and 515.3. Additionally, Federal, State and HIPAA statutes and regulations require the provision of such information upon request, without patient consent (see the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and Privacy Rule Regulations at 45 CFR Parts 160 and 164).
- To provide complete and accurate medical records to the Review Contractor as quickly as possible.
- To provide a duplicate medical record to OMIG staff.
- To respond promptly to inquiries regarding medical documentation from the Review Contractor and OMIG.
- To assist the Review Contractor in obtaining accurate and complete medical documentation.
- To request a duplicate medical record be sent to OMIG staff.
- To review the medical documentation that supports the claim payment for accuracy and completeness.
- To appeal findings with the Review Contractor through the Dispute Resolution Process.
- To appeal findings upheld in the Dispute Resolution Process with CMS.
- To collect any overpayments, as appropriate.
New York State Department of Health Medicaid Updates