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13 States Currently Exceed the OBBBA’s New Medicaid PERM Eligibility Error Rate Threshold, OBBBA Likely to Increase Error Rates Initially

Patrick Butler — Fri, 02 Oct 2026 14:59:46 +0000

The Medicaid Payment Error Rate Measurement (PERM) program is the federal quality-control system that measures improper payments in Medicaid and CHIP. Under the PERM methodology, CMS measures fee-for-service (FFS) claims, managed care payments, and eligibility determinations across a rotating cycle of 17 states per year, meaning each state is reviewed once every three years. Improper payment includes any payment that does not meet program requirements, including payments for which documentation was insufficient to confirm eligibility and reimbursement. In FY 2025, 77.2% of Medicaid improper payments resulted from insufficient documentation (missing paperwork or incomplete records) rather than payments to ineligible individuals or fraudulent claims. The national rolling PERM rate for Medicaid was 6.12% ($37.39 billion) in FY 2025, up from 5.09% ($31.10 billion) in FY 2024. The increase was driven by states returning to normal eligibility operations following the COVID-19 pandemic unwinding. See the full analysis below.

Medicaid PERM Improper Payment Analysis Download

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Unemployment Insurance Improper Payment Basics, Including Latest Policy Developments

Patrick Butler — Wed, 02 Sep 2026 14:29:51 +0000

The Unemployment Insurance (UI) program improper payment rate is any claims payment that should not have been made, or in an incorrect amount, including any payment to an ineligible claimant, and consists of all overpayments minus underpayments across states. improper payment is not synonymous with fraud but includes it.

On June 17, Acting Secretary of Labor Keith Sonderling issued formal letters to the governors of all states and territories demanding immediate action to combat fraud, waste and abuse in the UI program. The DOL announced in the letters that it intends to crack down on fraud and end mismanagement, improper payments, and “corruption” (presumably meaning fraud) within the program. The department further signaled its intention to use available enforcement tools, including, for the first time, withholding administrative funds from states to ensure compliance. Please see the full analysis below.

Unemployment Insurance Improper Payment and Fraud Analysis Download

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Only 20% of States Will Avoid Assuming a Portion of SNAP Benefits’ Costs for the First Time

Patrick Butler — Wed, 08 Jul 2026 19:54:25 +0000

On June 24, the U.S. Department of Agriculture released its Supplemental Nutrition Program (SNAP) state payment error rates for FY 25. The error rate measures how accurately states calculate SNAP benefits. This includes under- and over-payments to program recipients. For FY 25, the national payment error rate is 10.62%, a decrease of .31% from FY 24, which still far exceeds the newly enacted congressional threshold of 6%. Fiscal penalties and mandatory cost-sharing for states below the 6% error rate will begin on January 1, 2027, under H.R. 1. In addition, on October 1, 2026, for the first time, states will be required to pay an additional $2.7 billion per year in administrative costs for SNAP due to the administrative cost shift made in H.R. 1.

Only 10 states and territories had an error rate below 6% in FY 25, while 43 had error rates above the 6% threshold. About half of all states and territories improved their error rates since FY 24, with the largest improvements in New Jersey (-7.47%), Kentucky (-4.41%) and North Carolina (-2.85%). States with the largest increase in error rates since FY 24 include Hawaii (+4.24), Delaware (+3.63) and Minnesota (+3.6). Please see the full SNAP Error Rate Table comparing FY 25 and FY 24 rates below.

SNAP Error Rate Data Table FY 25 Download

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