{"data":{"id":"us/42-cfr-431.958","jurisdiction":"us","citation":"42 CFR 431.958","heading":"Definitions and use of terms.","body":"Adjudication date means either the date on which money was obligated to pay a claim or the date the decision was made to deny a claim.\nAnnual sample size means the number of fee-for-service claims, managed care payments, or eligibility cases that will be sampled for review in a given PERM cycle.\nAppeals means a process that allows the State to dispute the PERM Review Contractor and Eligibility Review Contractor findings with CMS after the difference resolution process has been exhausted.\nBeneficiary means an applicant for, or beneficiary of, Medicaid or CHIP program benefits.\nChildren's Health Insurance Program (CHIP) means the program authorized and funded under Title XXI of the Act.\nCorrective action means actions to be taken by the State to reduce errors or other vulnerabilities for the purpose of reducing improper payments in Medicaid and CHIP.\nDeficiency means a finding in which a claim or payment had a medical, data processing, and/or eligibility error that did not result in federal and/or state improper payment.\nDifference resolution means a process that allows the State to dispute the PERM Review Contractor and Eligibility Review Contractor findings directly with the contractor.\nDisallowance means the percentage of Federal medical assistance funds the State is required to return to CMS in accordance with section 1903(u) of the Act.\nEligibility means meeting the State's categorical and financial criteria for receipt of benefits under the Medicaid or CHIP programs.\nEligibility Review Contractor (ERC) means the CMS contractor responsible for conducting state eligibility reviews for the PERM Program.\nFederal contractor means the ERC, RC, or SC which support CMS in executing the requirements of the PERM program.\nFederally Facilitated Exchange (FFE) means the health insurance exchange established by the Federal government with responsibilities that include making Medicaid and CHIP determinations for states that delegate authority to the FFE.\nFederally Facilitated Exchange—Determination (FFE-D) means cases determined by the FFE in states that have delegated the authority to make Medicaid/CHIP eligibility determinations to the FFE.\nFederal financial participation means the Federal Government's share of the State's expenditures under the Medicaid program and CHIP.\nFinding means errors and/or deficiencies identified through the medical, data processing, and eligibility reviews.\nImproper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; and includes any payment to an ineligible beneficiary, any duplicate payment, any payment for services not received, any payment incorrectly denied, and any payment that does not account for credits or applicable discounts.\nImproper payment rate means an annual estimate of improper payments made under Medicaid and CHIP equal to the sum of the overpayments and underpayments in the sample, that is, the absolute value of such payments, expressed as a percentage of total payments made in the sample.\nLower limit means the lower bound of the 95-percent confidence interval for the State's eligibility improper payment rate.\nMedicaid means the joint Federal and State program, authorized and funded under Title XIX of the Act, that provides medical care to people with low incomes and limited resources.\nPayment means any payment to a provider, insurer, or managed care organization for a Medicaid or CHIP beneficiary for which there is Medicaid or CHIP Federal financial participation. It may also mean a direct payment to a Medicaid or CHIP beneficiary in limited circumstances permitted by CMS regulation or policy.\nPayment error means any claim or payment where federal and/or state dollars were paid improperly based on medical, data processing, and/or eligibility reviews.\nPERM means the Payment Error Rate Measurement process to measure improper payment in Medicaid and CHIP.\nPERM review period means the timeframe in which claims and eligibility are reviewed for national annual improper payment rate calculation purposes, July through June.\nProvider means any qualified provider recognized under Medicaid and CHIP statute and regulations.\nProvider error includes, but is not limited to, medical review errors as described in § 431.960(c) of this subpart, as determined in accordance with documented State or Federal policies or both.\nRecoveries mean those monies for which the State is responsible to pay back to CMS based on the identification of Federal improper payments.\nReview Contractor (RC) means the CMS contractor responsible for conducting state data processing and medical record reviews for the PERM Program.\nReview year means the year being analyzed for improper payments under the PERM Program.\nState eligibility system means any system, within the State or with a state-delegated contractor, that is used by the state to determine Medicaid and/or CHIP eligibility and/or that maintains documentation related to Medicaid and/or CHIP eligibility determinations.\nState error includes, but is not limited to, data processing errors and eligibility errors as described in § 431.960(b) and (d), as determined in accordance with documented State and Federal policies. State errors do not include the errors described in paragraph § 431.960(e)(2).\nState payment system means any system within the State or with a state-delegated contractor that is used to adjudicate and pay Medicaid and/or CHIP FFS claims and/or managed care payments.\nState-specific sample size means the sample size determined by CMS that is required from each individual State to support national improper payment rate precision requirements.\nStatistical Contractor (SC) means the contractor responsible for collecting and sampling fee-for-service claims and managed care capitation payment data, as well as calculating Medicaid and CHIP state and national improper payment rates.\nStates means the 50 States and the District of Columbia.","path":["Title 42—Public Health","CHAPTER IV—CENTERS FOR MEDICARE \u0026 MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES","SUBCHAPTER C—MEDICAL ASSISTANCE PROGRAMS","PART 431—STATE ORGANIZATION AND GENERAL ADMINISTRATION","Subpart Q—Requirements for Estimating Improper Payments in Medicaid and CHIP"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-42.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:26:11Z","sha256":"32260819d6556b6f5bdaf9ef24ca9cc76fa5918841bc63aa2e20274b6a778e08","source_id":"us-cfr","stale":true,"prev":"us/42-cfr-431.954","next":"us/42-cfr-431.960"},"notice":"GroundRules: Original legal text. Not legal advice."}