The California Department of Health Care Services (DHCS) wishes to notify all California Medi-Cal providers of the start of the Reporting Year (RY) 2023 Payment Error Rate Measurement (PERM) by the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS). The purpose of PERM is to identify erroneous payments made in Medicaid and the Children’s Health Insurance Program (CHIP) in all 50 states and report improper payment estimates to Congress.
During RY 2023 PERM, Medicaid and CHIP Medi-Cal claims will be randomly selected for Medical Reviews for the fiscal year beginning July 1, 2021, and ending June 30, 2022. Your cooperation will help ensure that the payment measurement rate for PERM reviews are accurate and that California retains its much-needed federal match monies for the Medi-Cal program.
What if one of my claims is selected for the PERM?
If one of your Medi-Cal claims is selected for the PERM, you will receive a notification letter from DHCS letting you know you have been selected, and the CMS Review Contractor, (RC) NCI Information Systems, Inc., will be contacting you for medical records. The letter from DHCS will not contain patient specific information.
The RC will contact you via telephone to verify your contact information and, patient name. The RC will also arrange to send you an official request letter on CMS letterhead detailing what information is needed.
DHCS anticipates its notification letters will be sent out for the first quarter of sampled claims in late 2021. The RC may begin contacting quarter one providers in late 2021 or early 2022. A total of four quarters of claims will be selected for review during the PERM cycle so it is possible you may receive multiple requests at different times during the PERM process.
Am I obligated to submit medical records for the PERM?
Yes. One of the most common types of error findings are caused by providers failing to respond to requests for medical records. Another error finding frequently cited is submission of insufficient documentation.
To reduce error findings in PERM reviews and ensure that providers are compliant with State and federal regulations, DHCS would like to remind providers of the following:
- Title 22 of the California Code of Regulations, Section 51476, states that, “each provider shall keep, maintain, and have readily retrievable, such records as are necessary to fully disclose the type and extent of services provided to a Medi-Cal beneficiary.” This includes medical records, orders, treatment authorization requests, and the time and date of service for each beneficiary.
- Under Sections 1902(a)(27) and 2107 (b)(1) of the Social Security Act, CMS and their representatives have the authority to collect all documentation to support a Medicaid claim.
- DHCS requires all enrolled providers to report changes to any information previously submitted as part of the provider enrollment application package, which includes the business address or phone number, within 35 days of the date of change.
- Failure to respond to requests for medical records may result in suspension from the Medi-Cal program as per Welfare and Institutions Code (W&I), Section 14124.2(b)(1) and Section 14124.2.
Not only do error findings affect California’s PERM rate, but claims cited with error findings at the conclusion of the medical review are also considered improperly paid. Therefore, in accordance with W&I Section 14172.5, DHCS is authorized to recoup these payments. Providers that receive a demand for recovery of claim payments are urged to remit the demand amount as soon as possible.
Where can I find out more about PERM and my responsibility to participate?
You can find more information about PERM on the DHCS website:
You can find information about provider specific responsibility on the CMS PERM website:
You may contact a member of the DHCS PERM Team with your questions at: