PERM Medicaid Audits Being Conducted in New York State

The Centers for Medicare and Medicaid Services (CMS) will be measuring improper payments in the Medicaid and State Children’s Health Insurance Programs under the Payment Error Rate Measurement (PERM) program. Due to the pandemic, CMS in April had suspended all PERM engagement/communication or data requests to providers and state agencies. Effective Aug. 11, 2020, CMS resumed PERM-related engagements with providers and states, including New York, which last participated in 2017.

PERM is a federal initiative and was developed to comply with the Improper Payments Information Act (Public Law 107­300). PERM is administered federally by CMS and by the Office of the Medicaid Inspector General (OMIG) at the state level. By law, CMS must complete the following:

• An annual process to identify programs susceptible to significant improper payments;
• An estimate of the amount of improper payments;
• A report to Congress on its findings; and
• A report on corrective actions taken to reduce the improper payments.

CMS, along with its contractor and OMIG, is authorized to collect information under Sections 1902(a)(27) and 2107(b)(1) of the Social Security Act. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) statutes and regulations require the provision of such information upon request, and the information can be provided without patient consent.

NCI Inc., the new CMS review contractor, in partnership with OMIG, will be requesting documentation for randomly selected claims in order to perform a medical review. When claims submitted by providers are selected, NCI Inc. and OMIG will request documentation in writing to substantiate claims paid in the federal review period of July 1, 2019 through June 30, 2020.

Providers that receive letters in this regard from the CMS contractor are asked to submit copies of the specific medical documents for selected patients directly to the CMS contractor and send second copies to OMIG at the following address:

Office of the Medicaid Inspector General
800 North Pearl Street, First Floor
Albany, NY 12204
Attention: PERM

Requests for documentation will start in November 2020. The sampled claims will have been paid between July 1, 2019 and June 30, 2020. Requests and subsequent receipt or non-receipt of documentation will be tracked. Failure to provide requested records will result in a determination by CMS of erroneous payment, and OMIG will pursue recovery.

Questions should be directed to the PERM Project Staff at 518-474-3499 or via email at PERMNY@omig.ny.gov.

Contact: Dan Heim, dheim@leadingageny.org, 518-867-8866