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CMS Expands Requirements for PERM, CHIP

Janice Simmons, for HealthLeaders Media, August 12, 2010

The Centers for Medicare & Medicaid Services on Tuesday issued final regulations that will implement improvements to the Payment Error Rate Measurement (PERM) for Medicaid and the Children's Health Insurance Program (CHIP).

PERM is designed to detect and measure improper payments made in Medicaid and CHIP and then establish a national-level error rates for each program. The reviews are conducted to determine whether sample cases meet applicable Medicaid and CHIP fee-for-service, managed care, and eligibility requirements. PERM is usually conducted in 17 states annually, so every state typically participates in the program once every three years.

"Like other large federal programs, Medicare, Medicaid, and CHIP are susceptible to errors or improper payments," says CMS Administrator Don Berwick, MD. "Reducing payment errors in federal programs is a key goal of the entire Obama Administration and the rules we are issuing....allow us to implement strategies for reducing the rate of errors in Medicaid and CHIP more effectively."

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