According to PA Department of Human Services (DHS) Secretary Dr. Val Arkoosh, PA’s payment error rate for Medicaid has significantly improved since 2019 and now stands at 2.49 percent compared to 8.85 percent nationally. This makes PA’s rate among the lowest in the country.

Payment Error Rate Measurement (PERM) reviews are conducted every three years and measure improper payments for Medicaid and CHIP. For Pennsylvania’s most recently completed review cycle in 2022, the Medicaid improper payment rate was 2.49 percent and the CHIP improper payment rate was 5.58 percent. Those numbers are significantly lower than the newly reported federal figures for 2023 which show the national Medicaid improper payment rate is 8.85 percent, and the national CHIP improper payment rate is 12.81 percent.

These numbers also showed significant improvement over the 2019 review cycle, when Pennsylvania Medicaid error rate was 14.24 percent and the CHIP error rate was 20.67 percent. The national rates for Medicaid and CHIP were 14.90 percent and 15.83 percent, respectively.

Federal agencies are required to review programs they administer and identify those that may be susceptible to significant improper payments, estimate any improper payments, submit those estimates to Congress, and submit a report on actions the agency is taking to reduce the improper payments. Medicaid and CHIP are programs at risk for significant improper payments because of the large volume of services and expenditures involved.

The Centers for Medicare and Medicaid Services (CMS) developed the PERM program to comply with oversight and reporting requirements. PERM does not measure fraud; it is a measurement of payments made that did not meet legal, regulatory, or administrative requirements and may be overpayments or underpayments.

To learn more about Medicaid, CHIP and how to apply for health coverage, visit dhs.pa.gov.