I am looking to see if Episerver CMS has document/item level permission out of the box for managing documents/items as well as content. If so, can you share any additional information?
If by document / item you are referring to media files (blobs) - they do share the same behavior as ordinary content (pages & blocks). Meaning that you can set ACL on them as well.
For details, see this user guide section: http://webhelp.episerver.com/latest/cms-admin/access-rights.htm.
This explains how to "...set access rights for different types of content, such as pages, blocks, images and documents in the navigation and assets panes."