The Centers for Medicare & Medicaid Services yesterday issued a final rule updating the Payment Error Rate Measurement and Medicaid Eligibility Quality Control programs to reflect how states adjudicate eligibility for Medicaid and the Children’s Health Insurance Program under the Affordable Care Act, among other changes. Under the rule, which takes effect 30 days after publication in the July 5 Federal Register, CMS will resume the eligibility measurement component of the PERM program July 5 for reporting in 2019. The program will review state Medicaid and CHIP payments through June of a given year, and a federal contractor will conduct PERM eligibility reviews for each state. The program will conduct eligibility reviews on a sample of fee for service and managed care payments and the beneficiaries associated with the sampled claims. Improper payments will be cited if the federal share amount is incorrect, with potential payment reductions or disallowances in cases where the state’s improper payment rate exceeds the 3% threshold. Under changes to the MEQC program, states must submit corrective actions for identified errors, and CMS will provide direction for active case reviews if a state has consecutive improper payment rates that exceed the 3% threshold. For more on the final rule, see the CMS factsheet.

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