The Centers for Medicare & Medicaid Services’ Review Contractors Generally Conducted Medicaid Fee-for-Service Claim Reviews for Selected States Under the Payment Error Rate Measurement Program in Accordance with Federal and State Requirements
Learn how the AI-generated research projects were createdOverall Conclusion
CMS’s review contractors adequately conducted Medicaid FFS claim reviews for three States (Arkansas, Connecticut, and New Mexico) under the PERM program in accordance with Federal and State requirements.
Source Document
Audit Scope
Audit covered 1,653 PERM FFS claims totaling $4,093,597 ($2,942,003 Federal share) included in the Medicaid FFS component of the CMS PERM program for Cycle 1 States Arkansas, Connecticut, and New Mexico. A random sample of 100 PERM FFS claims (totaling $203,807 with $153,311 Federal share) was selected for in-depth review. The PERM program uses a 3-year rotational cycle; Cycle 1 covers Medicaid payments from July 1, 2017 through June 30, 2018 (RY 2019). Data processing and medical record review contractors performed the work; an eligibility review contractor was also involved. The audit period for this engagement spanned December 2020 through October 2022, and CMS implemented contract language in October 2019 requiring documentation of non-error determinations.
Key Findings Summary
CMS’s review contractors generally conducted Medicaid FFS reviews in accordance with Federal and State requirements. Of the 100 sampled PERM FFS claims we reviewed, 90 claims were correctly determined and adequately documented. However, claim review determinations for the remaining 10 claims were not documented and therefore may be incorrect.
Based on our sample results, we estimated that 10 percent of the PERM FFS claims reviewed by CMS’s contractors were not documented and claim review determinations for these claims may not have been correct. The estimated total amount paid related to these claims was $6,411 (Federal share).
CMS’s review contractors did not always maintain documentation of their claim review determinations because CMS did not include specific contract language requiring its review contractors to maintain all documentation to support the contractors’ Medicaid FFS claim review determinations for non-error claims.
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AI-Assisted
AI Scope Summary
Assess the adequacy and documentation of CMS PERM Medicaid FFS reviews conducted by CMS PERM contractors in three Cycle 1 states (Arkansas, Connecticut, New Mexico) for the Reporting Year 2019 PERM program.
AI-Generated Insight
The PERM audit confirms the effectiveness of CMS PERM contractor reviews while highlighting a documentation gap that CMS addressed via contract changes; the overall findings indicate immaterial errors in the sampling frame, supporting continued confidence in the PERM process, with emphasis on maintaining documentation for non-error determinations to ensure audit trail integrity.