Medical Review Services—Past

Payment Error Rate Measurement (PERM) Initiative

The Improper Payments Information Act of 2002 (IPA) established the Payment Error Rate Measurement (PERM) initiative to identify national payment error rates for the Medicaid program and the Children’s Health Insurance Program (CHIP). As a qualified, experienced, and financially sound medical review organization, HSAG worked for the Centers for Medicare & Medicaid Services (CMS) as a subcontractor to perform medical review functions for the Medicaid PERM initiative for the fiscal year 2007 measurement cycle.

During this time, HSAG conducted extensive research into policies and guidelines for Medicaid services and for CHIP. The information obtained was used during medical record and coding reviews for Medicaid fee-for-service (FFS) sampling units to help determine whether the policies and/or guidelines were correctly applied, and whether each FFS sampling unit was paid correctly, coded correctly, met medical necessity for the care provided, and satisfied state guidelines and policies for payment.