Payment Error Rate Measurement (PERM)
The PERM program measures and reports an unbiased estimate of the true 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.
- Review Period: The PERM review period is payments made from July through June to align with state fiscal years and to provide additional time to complete the cycle before reporting improper payment rates. The upcoming cycle will review Medicaid and CHIP payments made in Reporting Year (RY) 2028 for July 1, 2026, through June 30, 2027.
- Statistical Contractor (SC) – The Lewin Group (Lewin): The SC will be collecting state’s claims and payment data, processing the data to ensure completeness and compliance with PERM requirements and selecting samples. The SC may have questions regarding data differences and changes from the last cycle, payment methodologies and identifying Medicaid versus CHIP matched payments. The SC is also responsible for national and state improper payment rate calculations that are provided to states at the end of each cycle.
- PERM Review Contractor (PRC) – Booz Allen Hamilton (Booz Allen): The PRC:
- Performs PERM eligibility reviews (ERs) and data processing (DP) reviews for all states
- Sends medical records request (MRRs) letters and conducts medical reviews (MRs)
- Conducts policy collection for all review types: ER, DP and MR
- The PERM audit is important to all Medicaid providers because CMS and the review contractor Booz Allen will be sending letters to various Medicaid providers requesting medical records to validate that the service was ordered, provided, documented and billed appropriately. Please make sure that your release of information/compliance/audit departments are aware and respond to the records requests in a timely manner. Providers should start receiving the letters sometime in late March or April 2027.
- Booz Allen makes initial calls to providers to verify provider contact information.
- Booz Allen establishes a point of contact with providers and sends record requests.
- Providers have 75 days to submit documentation.
- Booz Allen makes reminder calls and sends reminder letters on days 30, 45 and 60 until the medical records are received.
- If the provider does not respond, Booz Allen sends a non-response letter on day 75 to the State PERM representative, Steve McNichols.
- If the submitted documentation is incomplete, Booz Allen requests additional documentation.
- The provider has 14 days to submit additional documentation.
- A reminder call is made, and a letter is sent on day seven.
- If the provider does not respond, Booz Allen sends a 15-day non-response letter.
Failure to submit documentation or if the submitted documentation is incomplete, the claim(s) will be considered an error and subject to recoupment.
General PERM Information
(Centers for Medicare and Medicaid Services):
Questions? Contact Us
Steve McNichols, Program Integrity Compliance Coordinator
North Dakota Health and Human Services, Medical Services Division
600 E. Boulevard Ave., Dept. 325
Bismarck, ND 58505-0250
Email: piucc@nd.gov
Phone: (701) 328-4831