Current PERM Audit

Nov 04, 2022

The State of Maine is currently in the process of a federally mandated Payment Error Rate Measurement (PERM) audit for Reporting Year (RY) 2024. This audit covers randomly selected paid claims with a payment date from July 1, 2022, through June 30, 2023. 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.  

Required Medical Records 

If a provider’s claims have been selected for the audit, they will receive a request for medical records from Empower AI, who has contracted with the Centers for Medicare and Medicaid Services (CMS) to conduct the audit.  

Claim samples are chosen randomly. All providers must be prepared to send requested medical records to support claims that were or will be paid during this time period.  

The MaineCare Benefits Manual, Chapter 1, 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.” Additionally, 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.”  

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 CMS PERM Laws and Regulations webpage for more details about federal requirements.  

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.  

There are many resources for providers to explore at the CMS PERM Provider page, including a sample request packet. Please note that this sample packet has the name of the previous contractor on it and that the current contractor is Empower AI.  

Request for Medical Records Process 

1. Empower AI calls the provider to verify the mailing address to send a request for medical records.
2. Empower AI mails a request for medical records. The request will include:
   1. A CMS letter noting authority to request records without a HIPAA release
   2. A PERM fax cover sheet with a list of requested documentation that is unique to each claim category
   3. Claim summary data provided for the claim sample
   4. Instructions with different options for record submission. Please send records only via the options listed in these instructions.
3. Providers have 75 calendar days from the dated of the letter to send Empower AI the medical records
   1. Empower AI follows up with reminder calls and letters at 30 days, 45 days, and 60 days if the records have not been received
   2. A 75-day non-response letter is then sent to providers via certified mail
   3. The 75-day letter triggers an automatic error and the claim in considered an improper payment
4. When the documents are received timely, Empower AI reviews them. If documents are missing, an Additional Documentation Request (ADR) is sent, and providers have 15 calendar days from the date of the letter to provide the missing documentation.
   1. Empower AI calls the provider to discuss the documents needed prior to sending the ADR letter
   2. Empower AI calls the provider and sends a 7-day non-response letter
   3. Empower AI send a 15-day non-response letter
   4. The 15-day non-response letter triggers an automatic error and the claim is considered an improper payment 

PERM Webpage  

Visit the Maine PERM webpage for more information about the common errors found in previous PERM cycles, Frequently Asked Questions, and Record Request Guidelines.  

For questions, please contact Kealoha Rosso by phone at (207) 624-6929 or by email. Please DO NOT send medical records to this contact.