Payment Error Rate Measurement (PERM)
Payment Error Rate Measurement Program
The Payment Integrity Information Act (PIIA) of 2019 requires the heads of Federal agencies to annually review programs they administer and identify those that may be susceptible to significant improper payments, to estimate the amount of improper payments, to submit those estimates to Congress, and to submit a report on actions the agency is taking to reduce the improper payments. The Office of Management and Budget (OMB) has identified Medicaid and the Children's Health Insurance Program (CHIP) as programs at risk for significant improper payments. As a result, CMS developed the PERM program to comply with the PIIA and related guidance issued by OMB.
The PERM program measures improper payments in Medicaid and CHIP and produces improper payment rates for each program. The improper payment rates are based on reviews of the Fee-For-Service (FFS), managed care, and eligibility components of Medicaid and CHIP in the year under review. It is important to note that the improper payment rate is not a “fraud rate” but simply a measurement of payments made that did not meet statutory, regulatory, or administrative requirements. 2008 was the first year in which CMS reported improper payment rates for each component of the PERM program.
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Post-Public Health Emergency Unwinding
The Centers for Medicare & Medicaid Services (CMS) remains committed to strengthening its program integrity efforts and safeguarding taxpayer dollars through its activities associated with the review of improper payment data.
With the conclusion of the COVID-19 Public Health Emergency (PHE) and the ongoing unwinding process, PERM is operating at full capacity. CMS continues to monitor and apply any remaining applicable waivers and flexibilities as states and programs transition back to normal operations.
Please reach out to your CMS PERM State Liaison if you have any questions, or to identify any hardships or additional time needed to respond to a PERM documentation request during this unwinding period.