The Centers for Medicare & Medicaid Services (CMS) will be conducting audits of Medicaid claims in California beginning this month. The audits are part of the federal Payment Error Rate Measurement (PERM) Program, mandated by the Improper Payments Information Act of 2002. The purpose of PERM is to estimate the number of payment errors made in the Medicaid programs of all 50 states and report back to Congress with an “improper payment estimate.”

Almost 700 California Medi-Cal claims will be selected for audit over the course of one year, approximately 167 claims per quarter. Audited claims will have paid dates between October 1, 2012, and September 30, 2013. Providers whose medical records have been selected for review will begin receiving written requests for medical records beginning this June and ending in July 2014.

CMS has contracted with the A+ Government Solutions, Inc. to perform the review. The contractor will collect the medical records from providers via secure fax and mail for the sampled claims and will perform the reviews to determine if claims were paid correctly.

The California Department of Health Care Services (DHCS) is urging all providers to comply with requests for medical records from the federal contractors or DHCS. If you fail to submit the requested records, an error will be counted against California and you will be required to refund the claim payment amount to DHCS. Your cooperation will help ensure that the audit results are accurate and that California retains its much-needed federal matching monies for the Medi-Cal program.

For more details on the federal audits, see the DHCS PERM website. More information can also be located on the CMS PERM website.

For more information on Medi-Cal audits, see CMA On-Call document #7201, “Medi-Cal Audits.”