Payment Error Rate Measurement


The Centers for Medicare and Medicaid Services (CMS) implemented the Payment Error Rate Measurement (PERM) program to measure improper payments in the Medicaid and the Children's Health Insurance Program (CHIP). PERM is designed to comply with the Improper Payments Information Act of 2002 (IPIA; Public Law No. 107-300).

Under the Act, federal agencies must review programs that are at risk for payment errors. PERM uses a 17-state rotational approach to measure improper payments in Medicaid and CHIP for the 50 states and the District of Columbia over a three-year period. As a result, each state is measured once every three years.

The PERM program

  • Identifies program vulnerabilities that result in improper payments.
  • Promotes efficient Medicaid and CHIP program operations.
  • Helps ensure medical services are provided to the truly eligible.

The two review components to PERM are claims (payment) reviews and eligibility reviews. For the claim reviews, CMS uses contractors to perform statistical calculations, medical records collection and medical data processing reviews of Medicaid and CHIP fee-for-service and managed care claims. For the eligibility reviews, states perform their own reviews according to state and federal eligibility criteria.

Want more information?

This site is updated frequently; however, CMS announces frequent changes and clarifications for the PERM process. This site is informational only and is not designed to be exhaustive. The information on this site is to help providers better understand the PERM process, not to provide legal advice, business advice or protection from liability or responsibility during the PERM process.​​​​​​​


Claims Review Questions:

Barbara Key  
PERM Coordinator 
Office of Payment Accuracy and Recovery 

Eligibility Review Questions:

Jeff Reilly​ 
PERM Eligibility Lead 
Quality Control Unit