PERM FAQ
Overview
The Payment Error Rate Measurement (PERM) program checks for mistakes in Medicaid and Denali KidCare (DKC) payments. It’s run by the Centers for Medicare and Medicaid Services (CMS) through federal contractors. Each state’s error rate is reviewed and then added to a national rate, which is shared with Congress. These reviews look at who got benefits and payments made during the state’s fiscal year.
PERM FAQ
Why was the PERM program created?
Why was the PERM program created?
PERM was created by the Centers for Medicare and Medicaid Services (CMS) to follow federal laws that require agencies to check for payment errors in their programs. Medicaid and Denali KidCare (DKC) were found to be at risk for mistakes, so CMS must report estimated error rates each year. These reports are sent to Congress along with a plan showing what actions are being taken to reduce improper payments.
What are the benefits of the PERM program?
What are the benefits of the PERM program?
PERM helps find problems that cause payment mistakes. It supports better Medicaid and DKC program operations and helps make sure medical services go to people who qualify.
How often are states measured under PERM?
How often are states measured under PERM?
PERM reviews each state every three years. States are split into three cycles, each with 17 states. Alaska is in Cycle 3 and was reviewed in Reporting Year (RY) 2024.
During the RY24 review, any claim paid with Medicaid or Denali KidCare money between July 1, 2022, and June 30, 2023, was part of the review pool and could be selected as an audit sample.
How will I know a claim I submitted is selected for review?
How will I know a claim I submitted is selected for review?
In each cycle, a random set of claims is picked from each quarter for review. If one of your claims is chosen, you’ll get a letter in the mail.
For Example: During the RY24 review, any claim paid with Medicaid or Denali KidCare money between July 1, 2022, and June 30, 2023, was part of the review pool and could be selected as an audit sample.
Does PERM apply to me?
Does PERM apply to me?
Payments to all provider types are part of the PERM review pool and may be chosen for an audit.
Who will contact me?
Who will contact me?
All providers with claims selected for a PERM sample will receive a letter from the CMS review contractor, Empower AI.
The letter will have the CMS logo at the top. Please do not ignore this letter.
For more information
For more information
For more information visit the CMS PERM website. The Providers section contains details just for providers.
Check back often for updates, and bookmark the page so you can find it easily.
Legal Authority
Legal Authority
PERM is guided by the following laws and rules:
- CMS Laws and Regulations
- Social Security Act § 1902(a)(27) – Requires providers to keep records for review.
- Health Insurance Portability and Accountability Act (HIPAA) of 1996 – Protects patient information during the audit process.
- 42 C.F.R. §§ 431 and 447 – Federal rules about Medicaid payments and audits.
- 45 C.F.R. §§ 160 and 164 – Federal rules for privacy and security of health information.
- 7 AAC 160.100 – 7 AAC 160.140 – Alaska state rules for Medicaid program integrity and recordkeeping.