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​Payment Error Rate Measurement (PERM)

In response to the Improper Payments Information Act of 2002, the federal Office of Management and Budget identified Medicaid and the Children's Health Insurance Program as programs at risk for significant improper payments. As a result, the Centers for Medicare and Medicaid Services (CMS) developed the Payment Error Rate Measurement (PERM) program.

The PERM program measures improper payments in Medicaid and CHIP and produces error rates for each program. The error rates are based on reviews of the fee-for-service, managed care, and eligibility components of Medicaid and CHIP in the Federal Review Year under review. It is important to note that the PERM improper payment rate is not a "fraud rate," but simply a measurement of payments made that did not meet statutory, regulatory, or administrative requirements.

The PERM program uses a three-year rotation to produce and report national Medicaid and CHIP improper payment rates. This information is shared with Congress. There are three cycles, each containing 17 states (50 states and the District of Columbia). Pennsylvania is part of Cycle 1. The PERM Audit takes approximately 2.5 years to complete.

CMS implemented several changes starting with the 2019 PERM Audit:

    • The state fiscal year (July 1 to June 30) is now used for the review period instead of the federal fiscal year (October 1 to September 30).
    • The audit cycle is now designated as Review Year (RY) instead of Federal Fiscal Year (FFY).
    • Eligibility reviews are now conducted by a federal contractor and not the state.
    • Improper payments are cited if the federal or state share is incorrect, even if the total computable amount is correct.
    • Previously state-specific sample sizes were calculated based on the state's previous error rate. Now, national annual sample size is established which will be distributed across the states.

The Department of Human Services' PERM team consists of representatives from the Office of Medical Assistance Programs, Office of Income Maintenance, Office of the Budget, Office of Long Term Living, Office of Developmental Programs, Office of CHIP, and Office of Administration (OA). The Bureau of Program Integrity, under the Office of Administration, manages the PERM process for Pennsylvania and serves as the liaison between DHS and the CMS and the federal contractors. 

The Federal Fiscal Year 2015 PERM audit was Pennsylvania's last completed PERM cycle. The commonwealth achieved a successful audit outcome, with an overall error rate of 3.16 percent — in comparison to the national overall error rate of 8.81 percent.
Listed below are the final reports received from CMS for the Fiscal Year 2015 PERM Audit for PA:

Provider Information

Provider Quick Tips related to PERM

RA Banner Alerts related to PERM

Medical Records Request

Providers can expect Medical Record Request Letters from Chickasaw Nation Industries (CNI) to begin in September 2018. Below are examples of correspondence you may receive from CNI.

Federal Contractors Conducting the PERM Audit

The Statistical Contractor (SC):

The Lewin Group
3130 Fairview Park Drive, Suite 500
Falls Church, VA 22042
Phone: 703-269-5500
Central PERM Mailbox:

The Review Contractor (RC):

Chickasaw Nation Industries
1300 Piccard Drive, Suite 204
Rockville, MD 20850
General Mailbox:

The Eligibility Review Contractor (ERC): 

Booz Allen Hamilton
One Preserve Parkway, Suite 200
Rockville, MD 20852
Central PERM Mailbox:


Lori D'Agostino (PERM Coordinator and Medicaid-Claims Primary)
Phone: 717-772-8878  |  Email:

Patricia Weik (Medicaid- Eligibility)
Phone: 717-787-5499  |  Email:

MaryBeth Matlock (CHIP)
Phone: 717-346-1365  |

Link to Additional Provider Information

The "providers" page helps to better understand the PERM process and what
you may be required to do during a review.