PERM Introduction and Updates

1. PERM Introduction and Updates Presented by Douglas Nock, Director, Division of Analysis & Evaluation Bill Gould, Senior Technical Advisor Program Integrity Group Office of Financial Management Centers for Medicare & Medicaid Services

2. PERM Overview PERM was developed to comply with the Improper Payments Information Act of 2002 which requires: each federal agency to identify programs that may be susceptible to significant improper payments. Estimate the amount of improper payments annually. Report the amounts and actions taken to reduce improper payments annually to Congress. The PERM program is administered by the Centers for Medicare & Medicaid Services (CMS) with guidance from various oversight bodies such as Office of Inspector General (OIG), Office of Management and Budget (OMB) and Department of Human & Health Services (HHS). The program uses a national contracting strategy to estimate improper payments in Medicaid and State Children�s Health Insurance Program (SCHIP).

3. States by Cycle FY 2007 cycle includes: NC, GA, CA, MA, NJ, TN, WV, KY, MD, AL, SC, CO, UT, VT, NE, NH, RI. FY 2008 cycle includes: NY, FL, TX, LA, IN, MS, IA, ME, OR, AZ, WA, DC, AL, HI, MT, SD, NV. *FY 2009 cycle includes: PA, OH, IL, MI, MO, MN, AR, NM, CT, VA, WI, OK, ND, WY, KS, ID, DE. *Formerly FY 2006 States

4. PERM Cycles PERM is comprised of overlapping cycles that span 26 months. FY 2006 Cycle only covers Medicaid fee-for-service reviews. FY 2007 Cycle (and on out) covers Medicaid and SCHIP fee-for-service, managed care and eligibility reviews. PERM Cycle Timeframes 9/05 9/06 11/06 9/07 11/07 9/08 11/08 9/09 11/09 9/10 11/10 FY 2006 FY 2007 FY 2008 FY 2009

5. Changes to Improve Communication and Cooperation We are able to improve communication with the States since we are near the end of the rule-making process and have formally gathered public comments. We have initiated monthly PERM cycle teleconferences with the selected States for each cycle. We have also assigned �Cycle Manager� for each cycle as a liaison between States and CMS. Minutes from each �Cycle Call� can be found on the National Association of State Medical Directors (NASMD) at http://www.nasmd.org/issues/perm_resources.asp

6. More Changes to Improve Communication and Cooperation We have established a PERM Technical Advisor Group (TAG) and have bi-monthly teleconferences with them as a forum for discussions and recommendations to improve the PERM Program. We have created a one-stop shop for PERM information http://www.cms.hhs.gov/PERM We assigned a communication officer and a webmaster to maintain the PERM website ensuring that States can access current, up-to-the-minute information.

7. Additional Changes to Improve Communication and Cooperation Our contractors attend all teleconferences and address procedural questions or concerns from States. PERM contractors have joint teleconferences to coordinate internal workflows of the PERM cycle. A meeting for all PERM contractors will be scheduled in late Fall 2007.

8. Current Issues Addressed by Technical Advisor Group (TAG) Workgroup established to recommend improvements to the difference resolution process. Established workgroup to explore ways to eliminate duplication of effort found in the Medicaid Eligibility Quality Control (MEQC) and PERM eligibility reviews.

9. Upcoming Issues To Be Addressed by Technical Advisor Group (TAG) Develop minimum data set to satisfy PERM, Medi-Medi requirements.

10. Updates on FY 07 and FY 08 PERM Cycle Progress We are finalizing FY 06 Q1 & Q2 error rates and will report a preliminary, national Medicaid FFS error rate in the FY 07 Performance and Accountability Report (PAR). The PAR is submitted to the President, Congress, and members of the public to inform them on how well the Department performed in managing its programs and finances. On target to publish annual FY 06 error rates with FY 07 error rates in the FY 08 PAR (November 2008).

11. More Updates on FY 07 and FY 08 PERM Cycle Progress We are currently working with FY 07 States to populate sampled claims for measuring the FY 07 error rate. We are expecting reviews to begin in near future. We will kick-off the FY 08 PERM Cycle in early Fall 2007.

12. Difference Resolution We have formulated a difference resolution process for the States to dispute the Review Contractor�s medical and data processing error findings. No documentation errors (MR1) are not eligible for consideration under the difference resolution process. States may appeal to CMS for final resolution if the differences in findings are $100 or greater with exception of no documentation (MR1) and insufficient documentation (MR2) errors.

13. Corrective Actions Since the Medicaid and SCHIP programs are administered by the States, corrective actions will be taken at the State level. We plan to release a State Health Official letter on the corrective action process in the Fall.

14. Recoveries Recoveries will be made according to the current recoveries / collections process set by CMS for Medicaid and SCHIP per law and regulations. PERM does not add any new financial recoveries requirements. No Disallowances under PERM.

15. Eligibility

16. Work in Progress Insufficient documentations (MR2) errors: Should they be considered in the difference resolution process. Administrative / Other (MR9) errors � No dollar. We will exclude error claims with zero dollars from the error count. These claims do not affect a State�s error rate.

17. Questions?