​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 (CHIP) 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 (RY) 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 two and a half years to complete.

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

The RY 2022 PERM audit was Pennsylvania's last completed PERM cycle.  The Commonwealth audit outcomes are listed below, along with the National Rolling Error Rates and the Cycle 1 Error Rates. The Commonwealth outperformed many other Cycle 1 states, as well as national level.  

2022 PERM Audit Reports

Listed below are the final reports received from CMS for the RY 2022 PERM Audit for PA:

• 2022 Medicaid Cycle Summary Report PA
• RY 2022 Medicaid Error Notification
• RY 2022 Medicaid Error Notification (Recalculated)
  
• 2022 CHIP Cycle Summary Report PA
  
• RY 2022 CHIP Error Notification
  

Provider Information

*Note all Provider information will be updated as it becomes available.

Provider Quick Tips related to PERM

• 254 - Payment Error Rate Measurement (PERM) Initiative for RY25
  

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.

• Template RY 2022 Initial Request
  
• RY 2022 Claim Category Matrix
  
• RY 2022 Instructions to submit records
  

Federal Contractors Conducting the PERM Audit

Additional Provider Information

• CMS PERM Website: www.cms.gov/PERM

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