By: Shandra Hartly
Executive Summary
Beginning October 1, 2029, OBBBA makes significant changes to Medicaid’s Payment Error Rate Measurement (PERM) program: The law eliminates the “good faith waiver,” making penalties for error rates over 3 percent mandatory, and it changes definitions to expand the universe of payments subject to penalties. The risk to state budgets of these changes cannot be overstated; the potential liability, based on states’ past performance, could be in the tens or even hundreds of millions of dollars. However, states can limit their exposure to error and the potential pain of these changes by reducing the administrative burden surrounding Medicaid eligibility determinations.
