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 Health First Colorado (Colorado's Medicaid Program) and Child Health Plan Plus (CHP+) for accuracy.

  • The 2016 PERM cycle is Colorado's current review of provider payments which started summer of 2015 and will end summer/fall of 2017. The 2016 PERM cycle will review payments to providers during federal fiscal year 2016 (October 2015 - September 2016).

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 of 2012 (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.​
  • 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.

Eligibility Review

An eligibility review will not occur during the 2016 PERM cycle, due to the newness of the Affordable Care Act (ACA).  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.

Payment Review

Why are providers required to participate in PERM?

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

  • Claims are randomly selected by the Federal Review Contractor. If claims from your office are 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.

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.

What about patient privacy?

  • The collection and review of protected health information for review purposes is permissible by the Health Insurance Portability and Accountability Act (HIPAA) of 1996 and implementing regulations at 45 Code of Federal Regulations, parts 160 and 164.

What happens if the provider does not cooperate?

  • 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?

Where do I go for more information?