Payment Error Rate Measurement (PERM)

The Payment Error Rate Measurement (PERM) is an audit program developed by the federal government to comply with law. The program examines eligibility decisions and payments to providers for Medicaid and Child Health Plan Plus (CHP+) for accuracy.

  • The 2016 PERM cycle is Colorado's next review of provider payments which will occur during approximately the summer of 2015 to the summer of 2017. The 2016 PERM cycle will review payments to providers during federal fiscal year 2016 (October 2015 - September 2016). Due to the newness of the Affordable Care Act (ACA), an eligibility review will not occur during the 2016 PERM cycle.  Instead, Colorado is conducting eligibility review pilots with guidance from the federal government.  For more information, please visit the Centers for Medicare and Medicaid Services (CMS) PERM web page for the FY 2014-FY 2016 Eligibility Review Pilots.

Why is PERM required?

  • PERM helps the Department identify areas for improvement and helps cut down on fraud, waste and abuse.
  • PERM is required by federal law, the Improper Payments Information Act of 2002 (IPIA; Public Law 107-300) and amended by the Improper Payments Elimination and Recovery Act of 2010 (IPERA; Public Law 111-204) and further amended by the Improper Payments Elimination and Recovery Improvement Act (IPERIA, PUB. L. 112-248).
  • Improper payment error rates and estimates of improper amounts must be reported.
  • Actions to reduce erroneous expenditures must be reported.

Eligibility Review

What is the purpose of the eligibility determination review?

  • The purpose of the eligibility review is to verify the eligibility of sampled cases using state eligibility criteria in effect at the time of the decision under review.

How will eligibility sites know if any of their eligibility determinations have been selected?

  • You will be contacted by the Department or a federal contractor to request copies of the case file.

What do eligibility sites need to do?

  1. Eligibility sites need to check if the case is currently undergoing investigation for fraud.  If so, this must be reported to the Department or federal contractor.
  2. Eligibility sites need to submit copies of the requested case file within 10 business days of the date of the request.  Original documentation will not be accepted.
  3. If the eligibility site is not the correct site, it should inform the Department or federal contractor of which site that has the requested case file information.

What happens if there is an error finding in the eligibility determination?

  • Eligibility sites may or may not be contacted about eligibility errors.  Communication with eligibility sites will provide instructions.

What about patient privacy?

Where can I find more information?

  • Eligibility sites can visit the CMS PERM website to learn more about the new 2014-2016 eligibility pilots.

Payment Review

Why are providers required to participate in PERM?

How will providers know if any of their claims have been selected?

  • You will be contacted by the federal Review Contractor for copies of your medical records to support the medical review.

What do providers need to do?

  • Providers need to submit all requested medical records and supported documents within 75 calendar days of the request date, either electronically or hard copies to the federal Review Contractor.
  • Providers need to update the Department with most current and accurate contact information.

Who will send the medical record request?

  • The federal Review Contractor will send out the request letters and, if necessary, follow-up letters and calls. The Department will also send follow-up letters and make follow-up calls to the providers when necessary.

  • It is critical for the Department to have current and accurate contact information of providers to prevent any delay.

What happens if the provider does not cooperate?

  • Any claims for which documentation is not received upon request by the government shall be an overpayment subject to recovery.

  • The Department will recover payments if supporting medical records have not been submitted to the federal Review Contractor.

What happens if there is an error finding in medical review?

  • The federal Review Contractor will notify the Department about the error, and the Department has the option to agree or disagree with its findings.

What happens if the Department disagrees?

  • The Department can file a request for a Difference Resolution and providers may be contacted to assist in the Difference Resolution process.

What if an error is confirmed?

  • States are required to return the federal share of overpayments. The Department will pursue recoveries as part of the corrective actions according to law and regulation.

Where can I find more information?

Providers can visit the CMS PERM website to learn more about PERM.

  • Providers can also visit the CMS PERM Providers web page.
    • Providers can participate in Provider Education Calls/Webinars to learn more about the PERM process and provider responsibility. CMS will make the same presentation on each date followed by a live question and answer session.

Where do I go for more information?