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)