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Payment Error Rate Measurement (PERM)

The measure of the improper payments of Medicaid and CHIP, which results in an error rate for each program. These rates are based on multiple factors; fee-for-service (FFS), managed care and eligibility sections of Medicaid and CHIP in the fiscal year under review.

Adverse Selection

Adverse selection occurs when healthy people opt out of purchasing insurance, and thus the premium prices rise, which then causes additional people to opt out.…