Open Letter to All Medicaid Providers
Payment Error Rate Measurement Project (2008)
The improper payments Act of 2002 (HR 4878) requires federal government agencies to provide an estimate of their improper payments annually. The Centers for Medicare and Medicaid Services (CMS), has tested the process and methodology, and will implement a nationwide effort to measure improper payments in the Medicaid program. Florida's single state agency that administers the states' Medicaid program, Agency for Health Care Administration (AHCA), will be cooperating with CMS in this effort.
CMS will measure the accuracy of Medicaid and State Children's Health Insurance Program (SCHIP) payments made by States for services rendered to recipients through the Payment Error Rate Measurement (PERM) program. Under the PERM program, CMS will use national contractors to measure improper payments in Medicaid and SCHIP. The LEWIN Group will provide statistical support to the program by selecting a sample of claims to be reviewed and by calculating Florida's error rate. Livanta LLC will provide the documentation/database support by collecting medical policies from the state and by collecting medical records from the providers. A review contractor has already been engaged this year.
Medical records are needed to support medical reviews that the contractor will conduct on the fee-for-service Medicaid and SCHIP claims to determine if the claims were correctly paid. If a claim is selected in the sample for a service that you rendered to either a Medicaid or SCHIP recipient, Livanta LLC will contact you for a copy of your medical records to support the medical review of the claim.
Consequences of Non-Response
If requested supporting medical documentation is not submitted, the claim will be coded as an error and any monies paid will be recouped. Since dollars estimated as being paid in error are projected to the total claims universe, the actual impact of each claim error will be magnified several times, resulting in an overall and exponentially negative impact on the Florida Medicaid program. If the error rate is excessive, AHCA may have to add controls or other limitations to address problem areas that are identified. It must be restated that even small dollar claim amounts identified as payment errors can have a significant impact on how a particular service area is perceived.
Medical Record Requests
Please note that providers are required by Section 1902(a)(27) of the Social Security Act to retain records necessary to disclose the extent of services provided to individuals receiving assistance and furnish CMS with information regarding any payments claimed by the provider for rendering services. Furnishing information includes medical records.
In addition, the collection and review of protected health information contained in individual-level medical records for payment review purposes is permissible by the Health Information Portability and Accountability Act of 1996 (HIPAA) and implementing regulations at 45 Code of Federal Regulations, parts 160 and 164:
“…a covered entity may disclose protected health information to a health oversight agency for oversight activities authorized by law, including audits…or other activities necessary for the appropriate oversight of (1) the health care system; (2) government benefit programs for which health information is relevant to beneficiary eligibility; (3) entities subject to government regulatory programs for which health information is necessary for determining compliance with program standards; or (4) entities subject to civil rights laws for which health information is necessary for determining compliance.”
Additionally, Medicaid providers are required to comply with a medical records request from any authorized Medicaid employee. Please review subsequent bulletins for additional details regarding PERM.
We appreciate your continued cooperation with Florida Medicaid. If you have any questions, please contact Karen Chang, Administrator, Office of Medicaid Program Oversight by telephone at (850) 414-2513, or via email at changk@ahca.state.fl.us
