Louisiana Recognized for Low Payment Error Rate Measurement (PERM) Program Rates

Baton Rouge, La. -- The Centers for Medicaid and Medicare Services released findings citing Louisiana's Department of Health for its exemplary Payment Error Rate Measurement (PERM) program rates for Medicaid and Children's Health Insurance Program (CHIP) in fiscal year 2012.  Through strategic department initiatives, LDH posted a rate well below the national average PERM rate.  PERM error rates reflect both underpayments and overpayments that may have been made incorrectly.  PERM error rates are based on review of the fee-for-service (FFS), managed care and eligibility components of Medicaid and CHIP in the fiscal year under review.  Two examples of errors include lack of proper documentation and providers billing the wrong number of units.

The 2012 National Medicaid error rate is 7.1 percent.  LDH was below the national average with a combined rate of 2.3 percent, indicating less payment errors are found and reported in Louisiana.  FFS and Eligibility percentages make up the combined rate with 2.0 percent and 0.3 percent respectively.  

The 2012 National CHIP error rate is 8.2 percent.  Again LDH had outstanding results, falling below the national average with a combined rate of 4.6 percent.  FFS and Eligibility percentages make up the combined rate with 2.1 percent and 2.5 percent respectively.  LDH does not have a percentage for managed care because Bayou Health was not fully implemented at the time of the CMS study.

"Over the years, LDH has worked with Medicaid recipients and parents of children in the LaCHIP program to explore how we can ease the eligibility and enrollment process," said LDH Secretary Kathy Kliebert.  "We know that streamlining our administrative processes and efficiently managing both programs are keys to ensuring everyone enrolled in Medicaid and LaCHIP has timely access to the best care possible.  Our outstanding PERM program rates are a reflection of LDH's committed staff and their strategic use of available resources."

DHH's low error rate can be attributed to several process improvement initiatives and procedural revisions that have streamlined the renewal process including:

• Telephone renewals allow people to renew their coverage over the telephone, without having to submit lengthy paper renewal forms and the quality of information received during that brief telephone encounter is generally better than submitted on paper forms.
• Medicaid staff use highly accurate electronic data obtained directly from official sources to establish continued eligibility.
• Using data, LDH has classified cases according to likelihood of a change in income that would result in Medicaid ineligibility and focuses resources on those cases with a greater likelihood of such changes.
• Exercising the federal Medicaid "Express Lane Eligibility" option for those children who receive Supplemental Nutrition Assistance Program (SNAP) benefits; this involves an automated data match with the Department of Children and Family Services (DCFS) to establish initial and continued automatic Medicaid eligibility for the child.
• LDH has implemented an increased level of case reviews and a very detailed policy and procedures manual to help ensure the accuracy of the eligibility decisions.

The Claims Data component of PERM also attributed to LDH's low error rate by:

• Educating providers about PERM in advance; informing them about what is expected of them if and when their claims are sampled.
• Working very closely with the CMS PERM contractor to answer questions about how a claim paid or providing them with policy or additional information (to prevent findings from becoming errors). Medicaid program staff was extremely cooperative in this area, as hundreds of questions were sent by the contractor.
• Disputing and appealing error findings on claims that the state considered to have been paid correctly according to the Medicaid program policies.
• Contacting providers who were not submitting medical records to the PERM contractor; informing the providers that sanctions would be applied if they did not cooperate with PERM.

The implementations in eligibility and claims data effectively reduced waste and abuse of the programs as 97% of Medicaid payments and 96% of CHIP payments were appropriately paid out.

"Ultimately, by paying claims as we are supposed to through our payment policies, the Department ensures that funding is being spent the way it was budgeted," said LDH Undersecretary Jerry Phillips. "The lower the department's error rates, the more likely it is that those who need care are getting it."

For more information on the CMS PERM study please visit http://www.hhsc.state.tx.us/medicaid/FY-2010-12-PERM-State-Rates.pdf.  For more information on Bayou Health of LACHIP please visit www.dhh.la.gov.

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