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NC Department of Health and Human Services
NC Division of
Medical Assistance

Payment Error Rate Measurement

In compliance with the Improper Payments Information Act of 2002, the Centers for Medicare and Medicaid Services (CMS) implemented a national Payment Error Rate Measurement (PERM) program to measure improper payments in the Medicaid program and the State Children’s Health Insurance Program (SCHIP) in each state. North Carolina PERM reviews are required every three years.

CMS contracts with two Federal contractors to administer the PERM Program:

  • Livanta LLC (Livanta) is the statistical contractor (SC) and the documentation/database contractor (DDC).

    Livanta collects the claim universes from the states and selects a sample of fee-for-service and managed care claims to be reviewed from each state. Livanta also collects the Medicaid and SCHIP medical policies from each state, the provider medical records, and documentation from the provider-sampled claims.

  • A+ Government Solutions is the review contractor (RC) and performs the medical and data processing reviews on the sampled claims to determine if the claims were paid correctly. At the end of the process, the SC calculates the State and National error rates for Medicaid and SCHIP based on the results of the RC's reviews and the eligibility case reviews conducted by the States.

Providers will be required to furnish the records requested within a prescribed timeframe indicated by the contractor. Providers are urged to respond to these requests promptly upon receiving the request letter.

Records are required to be submitted by providers no later than 75 calendar days after issuance of the contractor's letter requesting such records (PERM Final Rule, Federal Register, Vol III, Wednesday, Aug. 11, 2010, 42 CFR 431.970, pg. 48848).

Providers are reminded of the requirement in Section 1902(a)(27) of the Social Security Act and Federal Regulation 42 CFR Part 431.107 to retain any records necessary to disclose the extent of services provided to individuals and, upon request, furnish information regarding any payments claimed by the provider for rendering services.

Provider cooperation to furnish requested records is critical in this CMS project. No response to requests and/or insufficient documentation will be considered a payment error. This can result in a payback by the provider and monetary penalties for North Carolina Medicaid and N.C. Health Choice.

For More Information Ready NC Connect NC
August 12, 2014