Payment Error Rate Measurement Program Fee-for-Service Review Component

What authority requires providers to participate in the Payment Error Rate Measurement (PERM) Program?

The Centers for Medicare & Medicaid Services (CMS) engaged two contractors to conduct PERM reviews: a Statistical Contractor (SC) and a Review Contractor (RC). For the Medical Review of fee-for-service (FFS) claims, the RC and the Department of Health Care Services (DHCS) will be contacting providers throughout the State to request medical records either in hard copy or electronic format. The purpose of the Medical Review is to determine if the claims were paid correctly.

Providers are required as per Section 1902(a)(27) of the Social Security Act to retain records necessary to disclose the extent of services provided to individuals receiving assistance and furnish CMS with information regarding any payments claimed by the provider for rendering services. The furnishing of information includes medical records.

In regard to the Children’s Health Insurance Program (CHIP), section 2107(b)(1) of the Act requires a CHIP State Plan to provide assurances to the Secretary that the State will collect and provide any information required to enable the Secretary to monitor program administration and compliance and to evaluate and compare the effectiveness of the States’ CHIP plans. In addition, the collection and review of protected health information contained in individual-level medical records for payment review purposes is permissible by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and implementing regulations at 45 Code of Federal Regulations, parts 160 and 164.

How will PERM affect providers?

Providers selected to participate in the Medical Review will be contacted by DHCS to verify the correct medical records contact name and address, and a formal request for medical records will be sent via fax and mail by both DHCS and the RC. Providers must submit the information electronically or in hard copy to both the RC and DHCS by the due date noted on the RC’s formal request. Please note that it will be the responsibility of the provider identified on the claim to ensure that any and all supporting medical records, from any and all provider(s) who rendered a service for which the claim payment under review was requested, is submitted in a timely manner. Those providers who do not submit the requested information as directed by DHCS and the RC may be subject to suspension from the Medi-Cal program by DHCS.

Who do providers contact with questions?

Please forward all inquiries to the PERM email box at PERM@dhcs.ca.gov. Please note that PERM-related medical record documentation or any documentation containing Personal Health Information (PHI) should not be sent via email.

How can providers find out more about PERM?

The CMS provider page was developed to help providers better understand the PERM process and what may be required during a PERM review. The provider FAQ contains answers to the questions that are most commonly asked by providers. Links are provided to learn more about the recovery audits and Medicaid integrity audits. Please note that, as a provider, you may be requested to participate in a review or audit separate from the PERM review. 

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