Nebraska Medicaid Program

Current Initiatives

Payment Error Rate Measurement (PERM)

The Centers for Medicare and Medicaid Services (CMS) is conducting the Payment Error Rate Measurement (PERM) audit to assess the occurrence of improper payments in Medicaid in accordance with the Improper Payments Information Act (IPIA) of 2002. As part of this program, medical records of sampled claims will be reviewed to ensure that all paid claims were medically necessary and billed appropriately. Nebraska Medicaid staff will be working with the contractor and providers to ensure all requested documentation will be received in order to avoid errors.

Nebraska participates in PERM every three federal fiscal years. The last time that Nebraska participated was in the PERM audit process in federal fiscal year 2007 (October 1, 2006 through September 30, 2007) for both Medicaid and the Children’s Health Insurance Program (CHIP), reviewing claims and eligibility determinations. The majority of Nebraska’s errors in the claims audit were due to provider’s not submitting the requested medical records to the federal contractor or providers submitting insufficient documentation to substantiate the service that was billed.

We recognize providers are concerned with maintaining the privacy of patient information. However, the collection and review of protected health information contained in individual-level medical records for payment review purposes is allowed by the Health Insurance Portability and Accountability Act (HIPAA) and implementing regulations at 45 Code of Federal Regulations, parts 160 and 164. This permits the collection and review of protected health information to meet the CMS PERM requirements.

Providers Will Be Receiving Record Requests

The claims that will be selected are from all claims that have been or will be paid by Nebraska Medicaid from October 1, 2009 through September 30, 2010. Of all the claims that have been or will be paid during that time, approximately 2,000 will be randomly selected for review. Since the claims are sampled randomly, this means that some providers may have more than one service selected to send medical documentation in on. It also means that there are some providers who will not have any claims selected at all. The sampled claims will be selected by a federal contractor with no ties to the Nebraska Medicaid program.

All providers who have submitted or will submit claims that will be sampled by CMS will be receiving a letter from a federal contractor. This letter will be on CMS letterhead. The letter will request medical records for a particular service that was performed by the provider. The provider will be given 60 calendar days to submit the requested documentation before the claim will be found to have been paid in error. The letter requesting records will have a date at the top identifying when records must be submitted. You will also receive two follow-up notices if records have not yet been received by the contractor. The first will be 15 days after the original request, and the second will be 35 days after the original request. If records are not submitted and the claim is found to have been paid in error, Nebraska Medicaid may request a refund from that provider for that service.

If You Have Questions

If you have any questions about the review process, or if you want to verify that a request for records that you have received in genuine, please contact Betsie Steenson at 402-471-9353 or by email at Please do not include any PHI in unsecured email transactions. If you would like more information about the rules and regulations relating to PERM, please visit