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

Jan 13, 2023

Current PERM Audit   

The State of Maine is currently in the process of a federally mandated Payment Error Rate Measurement (PERM) audit for Reporting Year 2024. This audit covers randomly selected paid claims with a payment date from July 1, 2022, through June 30, 2023. 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 Empower AI. Please be advised that this is a legitimate request and is part of the federally mandated PERM audit. Empower AI 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 Empower AI 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 Empower AI, not CNI Advantage as noted on the sample letter. Please see MaineCare Benefits Manual - Chapter I, 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 errors found in our previous two PERM cycles can be found here.  

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. The MaineCare Benefits Manual, Chapter I, 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 Empower AI - Contact the Empower AI 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: kealoha.e.rosso@maine.gov Please DO NOT send medical records to this contact.