Attention All Providers: Payment Error Rate Measurement (PERM) Audit

Attention All Providers: Payment Error Rate Measurement (PERM) Audit

Current PERM Audit

The State of Maine is currently in the process of a federally mandated PERM audit for Reporting Year 2021. This audit covers randomly selected paid claims with a payment date from July 1, 2019 through June 30, 2020. Due to the random sampling of claims, all providers should be prepared to send requested medical records to support claims that were or will be paid during this time period.

PERM Description and Federal Requirements

PERM measures improper payments in Medicaid and the State Children’s Health Insurance Program (CHIP) and produces state- and national-level error rates for each program as required by the Improper Payments Information Act (IPIA) of 2002 (amended in 2010 by the Improper Payments Elimination and Recovery Improvement Act or IPERA, and the Improper Payments Elimination and Recovery Improvement Act of 2012 or IPERIA). See the CMS PERM Laws and Regulations webpage for more details. CMS also has a dedicated page for providers, complete with a link to Frequently Asked Questions (FAQs).

Required Medical Records

In the coming months, you may receive a request for medical records for a specific claim from Advance Med. Please be advised that this is a legitimate request and is part of the federally mandated PERM audit. Advance Med has contracted with the Centers for Medicare and Medicaid Services (CMS) to conduct the audit of MaineCare claims. Per MaineCare policy, providers who are contacted by Advance Med for the purpose of the PERM audit are required to respond to their requests for information and provide the necessary documentation so they can conduct their reviews.

Please see the sample request letter for more information. The letter request for medical records will list the name of the contracted agency conducting the PERM audit. Please note, the PERM auditor is Advance Med, not CNI Advantage. Please see MaineCare Benefits Manual - Chapter 1, Section 1.03 for more information about this requirement. 

Financial Impact of Errors and Lack of Documentation

It is critical that providers respond to requests for documentation in a timely fashion. Records that are incomplete, submitted late, or not submitted at all will result in an automatic error and will be considered an improper payment. The State will have to reimburse the federal government for all improper payments and may seek reimbursement from providers who did not comply with federal law.

Failure for a provider to return the requested documentation in the proper format within the requested timeframe could result in recoupment of MaineCare payment on that claim.

The most common billing errors found in our previous PERM cycle include:

• The provider responded with a statement that the provider had billed in error – Before submitting a claim, be sure to check that the information for the member and the services provided are accurate.
• The provider responded with a statement that the beneficiary was not seen on the sampled date of service – Before submitting a claim, make sure the documentation supports the date of service being submitted.
• The provider submitted a record for the wrong date of service – When sending documents to Advance Med, be sure to send to documents for the correct date of service.
• The date of service is incorrect but is within 7 days of the date of service billed on the claim – Although some billing can be done within a specified date span, be sure to list the date of service as the actual date the services were provided. For example, if a member was authorized to be seen once for services between Sunday and Saturday and the services were provided on Wednesday, the date of service on the claim should be for Wednesday’s date.
• The number of units billed is not supported by the number of units documented – Be sure to bill the correct number of units on a claim. Keep accurate records so that the documentation supports the number of units billed.
• The provider billed for separate components of a bundled procedure code – Some service codes are required to be billed together, or bundled, on the same claim. Be sure to bill all bundled codes on the same claim.

Resources for the Documentation Records Audit

CMS has produced a video titled “PERM: Responding to Medical Records/Documentation Requests” that providers may find useful in preparing their records for audit.

Provider Billing Reminders

As a MaineCare provider, it is your responsibility to make sure that all claims sent to MaineCare are true and accurate. For each claim submitted, you must be sure to include the correct member name, member status, date of service, bill type, billed units, charges, and procedure codes. Claims should also include modifiers, medical assessments, daily shift notes, physician’s orders, home support provider census sheets, pre-authorizations, RUGs, admission dates, etc., if applicable.

The MaineCare Benefits Manual, Chapter 1, Section 1.03 states that all providers must “Maintain and retain contemporaneous financial, provider, and professional records sufficient to fully and accurately document the nature, scope and details of the health care and/or related services or products provided to each individual MaineCare member” and that these records are kept “for a period of not less than five (5) years from the date of service or longer if necessary to meet other statutory requirements. If an audit is initiated within the required retention period, the records must be retained until the audit is completed and a settlement has been made.”

Contact Us

• Questions about medical records requests, including questions on the terminology used in some of the communications from Advance Med - Contact the Advance Med Medical Records Manager. The contact information is printed on the bottom of the documentation request letter you received.
• General questions on the federal PERM program and provider specific questions - Email CMS at PERMProviders@cms.hhs.gov. Please DO NOT send medical records to this contact.
• State of Maine-specific questions - Contact Kealoha Rosso, phone (207) 624-6929, email: e.rosso@maine.gov Please DO NOT send medical records to this contact.