A Look at the Medicaid Payment Error Rate Measurement (PERM) Program and Upcoming Changes and Impacts
This article provides an overview of the Medicaid Payment Error Rate Measurement (PERM) program and examines how the 2025 budget reconciliation law introduces new federal funding reductions for states that exceed specific eligibility error thresholds.
This resource details the operational structure of the Medicaid Payment Error Rate Measurement (PERM) program, explaining how cyclical audits of fee-for-service, managed care, and eligibility components are used to calculate national improper payment rates.
It highlights that most errors are caused by administrative or documentation issues rather than fraud, and it analyzes the impact of the 2025 budget reconciliation law, which introduces federal funding penalties for states with eligibility error rates exceeding three percent.
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