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CMS Inks $44M Deal to Uncover Improper Medicaid, CHIP Payments


NCI, the analytics and artificial intelligence solutions company, will dig into the data.

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Photo has been cropped and resized. Credit: Sarah Stierch (CC BY 4.0).

NCI, an information technology (IT) solutions firm, has landed a 5-year, $44 million contract to scrutinize Medicaid and Children’s Health Insurance Program (CHIP) claims, to help CMS report and reduce improper payments, according to an announcement from the company.

NCI will use its technologies, ranging from advanced analytics and artificial intelligence (AI), to undertake the work necessary to compose CMS’s payment error rate measurement (PERM), a number that every government agency must submit to Congress, in an effort to combat wasteful and inappropriate spending. For Medicaid in particular, incorrect payments have become something of a hot-button issue, inciting partisans and, at times, lining the pockets of hackers.

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In a statement, Paul A. Dillahay, president and CEO of NCI, credited the award of this important contract to his organization’s 17-year partnership with CMS and the results it has delivered.

“This award is the result of our successful track record in measuring and reducing payment errors for the CMS Medicare program, as well as our team’s many years of hard work and dedication to fighting fraud, waste, and abuse in entitlement programs,” Dillahay said. “NCI understands the importance and integrity of these government health organizations and the invaluable services they provide to nearly 70 million Americans.”

To accomplish its task, NCI will start by analyzing state-level Medicaid and CHIP policies, then moving on to requesting and gather medical records from health systems and other providers. Next, it will process the data and perform reviews of claims to determine the validity of claims. Finally, NCI will connect with state officials to go over the results and enter the information into state Medicaid Error Rate Findings systems before working with other contractors to produce the national report destined for Congress.

Lawmakers created PERM through the Improper Payments Elimination and Recovery Act of 2010. As CMS notes, the figure does not equate to a “fraud rate.” Instead, the PERM reflects payments “that did not meet statutory, regulatory, or administrative requirements,” according to the agency.

For CMS, the comprehensive PERM program kicked off in fiscal year 2008.

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