Payment Error Rate Measurement

 

 

Microsoft Outlook calendar of PERM trainings and events.

Frequently Asked Questions About PERM

 

•  What is PERM?

PERM is a national effort by Centers for Medicare and Medicaid Services (CMS) to measure the accuracy of payments made through Medicaid and State Children's Health Insurance Program. In Alaska, Denali KidCare is the name of the children's health insurance program.

 

•  Why is PERM happening?

The federal government wants to minimize fraud and waste. Under the Improper Payment Information Act of 2002 (IPIA), federal agencies must review programs at risk of major payment mistakes each year, and estimate the amount of improper payments. The Centers for Medicare & Medicaid Services started PERM to measure improper payments in the Medicaid program and the State Children's Health Insurance Program.

 

•  How does PERM work?

CMS will randomly select a number of claims to review. They will then contact the providers that submitted those claims, and ask for medical documents that support the claims.

 

•  How will this affect Alaska Medicaid federal funding?

At the end of the audit, an error rate will be determined for Alaska's Medicaid payments. Alaska must reimburse the federal government for incorrectly paid claims.

If a provider does not send in all requested materials before the deadline, the claim will be marked as improperly paid.

 

•  How will PERM impact Medicaid providers?

Some providers will be asked to provide records for a claim to show that they accurately billed Medicaid. How quickly and thoroughly the providers respond will have a major impact on the state's score.

Providers are encouraged to turn in materials right away, so if they are asked for additional materials, they still have time to submit them within the 60-day deadline.

Also, If the state finds a provider did not provide a service, providers must reimburse the state.

 

•  When will Alaska 's PERM audit's start?

A statistical sample of payments and denials will be submitted to the federal contractors on January 2008. The sample will come from claims with payment dates from Oct. 1, 2007 – Sept. 30, 2008. The State of Alaska will submit samples of claims on a quarterly basis based on the dates of payment or denials. The first quarter audits consist of claims with payment dates from Oct. 1, 2007 to Dec. 31, 2007 (see the attached samples dates that will be pulled each quarter).

 

 

The sample of claims will be collected based on payment dates. This could impact dates of service back to October 1, 2006 within the 12 month timely filing limit if the claim has a payment date of October 1, 2007. During this process Medicaid providers will be expected to provide documentation that supports the Medicaid payment.

 

• When will a payment error rate be determined for Alaska ?

The process of evaluating payment accuracy, called the “production cycle,” will take about a year. Then an Alaska Medicaid payment error rate will be calculated.

 

•  Is Alaska the only state selected for this type of audit?

All 50 states will take part in this federal audit to measure both Medicaid and SCHIP programs. Alaska has been selected to participate in the 2008 FY, and will be measure once every three years for each program. This will allow States to plan for the reviews because States know in advance in which year they will be measured.

 

•  How many claims will be reviewed as part of the PERM project?

Approximately 1,200 Medicaid claims will be subject to this federal audit, from payment dates from October 2007 through September 2008. Approximately 300 claims will be reviewed each quarter.

 

•  How will incorrect billing or insufficient documentation or no documentation affect the error rate?

“No documentation” will be considered an error, because there is no evidence to adequately determine whether the services were provided, were medically necessary, and were properly coded and paid. A claim with insufficient documentation will be considered an error because it does not support that the payment was correct. The national contractors will determine the error rate based on Alaska regulations.

 

•  I'm concerned about my client's privacy. What law allows review of these records?

These records requests are permitted under the Health Insurance Portability and Accountability Act (HIPAA), and compliance is required for Alaska Medicaid participants.

 

•  How far back do I have to keep records? I was going to shred them to protect client confidentiality.

State law requires you keep your records available for review for seven years.

 

Sources: Federal Register/August 28, 2006/Rules and Regulations; State 7AAC 85.300: 7 AAC 85.900; AS 18.05.040