Payment Error Rate Measurement (PERM)

The Improper Payments Information Act (IPIA) of 2002 (amended in 2010 by the Improper Payments Elimination and Recovery Act or IPERA) directs federal agencies to annually review programs they administer and identify those that may be susceptible to significant improper payments. If federal agencies identify programs that are indeed susceptible to significant improper payments, they should take necessary actions 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, the Centers for Medicare and Medicaid Services (CMS) developed the Payment Error Rate Measurement (PERM) program to comply with the IPIA and related guidance issued by the OMB.

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 (FFS), managed care, and eligibility components of Medicaid and CHIP in the fiscal year (FY) under review. It is important to note the error rate is not a "fraud rate" but simply a measurement of payments made that did not meet statutory, regulatory or administrative requirements.

Iowa is participating in the Federal Fiscal Year 2014 PERM program. This means that you may be contacted by the CMS national contractor, A+ Government Solutions, Inc., who will collect medical records from you either in hardcopy or electronic format. The medical records request letters will be sent to Iowa Medicaid enrolled providers between June 1, 2014 and August 31, 2014.

Resources on PERM
Informational Letter 1340 [1] Informational Letter 1386 [2] PERM Informational Video [3]

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