Provider Notice Issued 04/09/2020

Date:    April 9, 2020
To:       Local Education Agency Providers; School-Based Health Services
Re:      Local Education Agency Payment Error Rate Measurement (PERM) Audit Findings
To comply with the Improper Payments Information Act of 2002, the federal Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) has implemented a Payment Error Rate Measurement (PERM) program, which measures improper payments within each state's Medicaid program and Children's Health Insurance Program (CHIP). Each state is required to participate in PERM every three (3) years.
All services for which claims are made to the Department of Healthcare and Family Services (HFS, the Department) are subject to audit. Audits are an important and necessary part of the Department’s monitoring of health care facilities and services, as required by both federal and State law. Audit findings against a provider will result in the recovery of resulting overpayments. Audit findings against a provider may also result in sanctions or other penalties.
This notice reminds Local Education Agencies (LEAs) of documentation requirements that were found deficient during the Reporting Year (RY) 2019 (July 1, 2017-June 30, 2018) PERM program audit. The RY19 PERM program period was conducted by CMS and resulted in the following errors being cited for Local Education Agencies:
Missing or Insufficient Documentation: Maintenance of Records
PERM errors included instances of schools not submitting sufficient documentation to support the service billed. Fifty percent of all medical record findings were due to LEAs. Schools failed to submit service plans (IEP), progress notes, service logs, transportation logs, and other required documentation. HFS policy requires schools to maintain the following records:
  • Any and all professional records that relate to the quality of care given by the provider or that document the care for which payment is claimed, including, but not limited to:
    • Medical records for applicants and participants in the Department’s Medical Programs (copies of claims alone will not meet this requirement);
    • Complete copy of the Individualized Education Programs (IEP) in effect for date of service claimed;
    • Daily case documentation or progress notes for date of service claimed;
    • Medication Administration Records for all medication given;
    • Transportation logs (U-210.13) for all transportation services claimed; and
    • Other professional records required to be maintained by applicable federal or state law or regulations.
  • Any and all business records that may indicate financial arrangements between the provider and other providers in the program or other entities, or that are necessary to determine compliance with federal and state requirements, including, but not limited to:
    • Original signed billing certification forms for each voucher received.
Refer to the Handbook for Local Education Agencies, Chapter U-200, for detailed requirements.
Missing Ordering/Referring National Provider Identifier (NPI) Numbers
PERM errors also included instances of schools not submitting the NPI of the ordering/referring practitioner for the services billed.
Effective with dates of service beginning January 1, 2020, the Department has required that all claims for services that were ordered or referred contain the NPI of the physician or other professional who ordered or referred such services (42 CFR 455.440), and that those ordering or referring practitioners be enrolled in IMPACT (42 CFR 455.410) as individual providers. Providers, such as LEAs, enrolled with HFS as a Facility, Agency, Organization (FAO) will not be accepted as an ordering/referring practitioner.
HFS will edit claims to ensure the ordering/referring provider NPI is valid. If the edit fails, the claim will reject.
Due to the recent public health emergency prompted by COVID-19, the Department is suspending the IMPACTenrollment requirement.  Effective with dates of service on or after March 9, 2020, until the public health emergency no longer exists, the edit requiring ordering or referring practitioners to be enrolled in IMPACT as Medicaid providers has been temporarily turned off. Please note, the NPI of the ordering/referring provider must still be on the claim. Providers will be notified when the edit will resume after the public health emergency has been lifted and should refer to the Provider Notices page for information.
By informational notice dated September 23, 2019, providers were notified of a provider directory that may be accessed to verify enrolled ordering/referring/prescribing providers for dates of service that require providers be enrolled. The provider directory is linked from the IMPACT homepage.
Questions related to enrolling in IMPACT can be directed to the IMPACT Help Desk:
Kelly Cunningham
Interim Medicaid Administrator



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