The Centers for Medicaid and Medicare Services would like to welcome you to the
Payment Error Rate Measurement (PERM) Overview for Medicaid and Children’s
Health Insurance Program (CHIP) providers.
The Improper Payments Information Act (IPIA) of 2002 (amended in 2010 by the
Improper Payments Elimination and Recovery Act (or IPERA) requires the heads of
federal agencies to annually review programs that may be susceptible to
significant improper payments. Both Medicaid and CHIP have been identified as
programs at risk for significant improper payments. In order to comply with IPIA
and related guidance, CMS developed the Payment Error Rate Measurement, or PERM.
PERM uses a 17- state rotation to measure the improper payments made in
fee-for-service, managed care claims submitted in the Medicaid and CHIP programs.
The 17-state rotation means that each state is measured only once
every 3 years on a recurring basis. The PERM measurement then establishes an
error rate for each component. It is important to note that the error rate is
not a “fraud rate” rather a rate indicating that payments made did not meet
statutory, regulatory, or administrative requirements.
As a provider, any of your fee-for-service claims are subject to medical review.
It is important to keep in mind that even if your state is undergoing the PERM
measurement, it is not guaranteed that you will have a claim under review.
However, if one (or more) of your claims is selected you should expect a
medical/service records request from the current CMS PERM Review Contractor.
This request will come from a Customer Service Representative of the current CMS
PERM Review Contractor who will work to assist to identify the appropriate
person within the provider office. The Review Contractor will explain the PERM
process, the authority governing PERM, as well as coordinate with the provider
the appropriate contact person to formally submit the medical/service records request.
Once this information is identified, the current Review Contractor will
fax or mail the medical/service records request to the providers’ office.
The request sent to the provider will detail the documents needed for each
medical/service records request and will provide instructions for how to submit
the requested records to the PERM Review Contractor.
Please note that with each record request will also be a PERM cover sheet. It is
extremely important that this cover sheet be provided with each record requested
and submitted to the current Review Contractor no later than the due date
printed at the top of the “Initial Request for Records” letter so that the claim
is easily identified.
The due date at the top of the “Initial Request for Records” allows a maximum of
75 days to submit the requested records. Receiving the requested records is
critical to the measurement; as such the current Review Contractor will provide
reminder calls and letters throughout the 75 day period (30 day, 45 day
and 60 day) until the records are received.
If the Review Contractor determines that the documentation submitted is
insufficient for the claim requested, additional documentation may be requested
before the review is completed. Providers will then have 14 calendar days
to submit this documentation.
All medical/service records will be reviewed by the current Review Contractor
and proper or improper payment determinations will be made on the basis of the
medical/service record documentation provided and your state’s policies.
No documentation and insufficient documentation error findings have been the
largest source of errors in the past PERM measurements. CMS would like to stress
to providers that all error findings will adversely impact the state and
national error rate. Providers should note that all requested claims with no
documentation or insufficient documentation will automatically be identified as
an improper payment . CMS is required to recover all improper payments
and the State may sanction providers with improper payments.
Through past measurements, CMS has identified common mistakes that providers
make in submitted medical/service records. These mistakes include:
not responding within required timeframes, submitting records for the right patient
but the wrong date of service, submitting records for the wrong patient,
not submitting readable records (i.e. Poor quality of faxed documents, etc.),
not copying both sides of two sided pages, and marking or highlighting certain parts
of the records which obscures important facts when copied.
CMS has also identified some best practices including: designating a point of
contact the makes the PERM request a priority the moment it is received,
thoroughly reading the medical/service records request and identifying the
appropriate dates of services requested, being aware of the importance of
cross-referencing names changes (including newborns) and assuring that the
recipient name on the record request is the same as on the actual claim sampled.
Providers should note that sending billing information is not sufficient proof
that services were provided, and again no matter how small the paid amount of
the claim, the submission of the requested medical/service documentation is
critical in the PERM measurement.
CMS also suggests providers do the following to ensure success: CMS advises that
providers keep abreast of state policies regarding documentation requirements
for relevant provider types and closely monitors their states’ Medicaid agency
website and other resources, providers should maintain a copy of the
documentation for services performed outside of the provider office that support
the claim and as often noted in the medical community
“if it was not documented, it was not done?”
We certainly hope that this information provided on the medical/service records
request process for PERM was helpful. If you have additional questions we
encourage you to visit the CMS PERM website at www.cms.gov/PERM where we have a
dedicated “Providers” page. The “Providers” page includes information on when
your state will be measured by PERM, in addition to your state contact information.
It also includes samples of the medical/service records request
letters and other documents referenced in this presentation. CMS will also post
any updates for providers to the page as well as contact information to contact
PERM staff within CMS directly through the PERM Provider e-mail address.
We look forward to working alongside you in your next PERM cycle and are
available to answer any questions you may have. Thank you.