Empirical Risk Management
Empirical Risk Management

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Empirical Risk Management

Phone: 772-210-2823

Fax: 772-210-2824


Kameron Gifford, CPC



Todd Gifford, MBA


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APPROVED by the AAPC for 5 CEUs

Course Overview

Medicare Advantage (MA) is one of the fastest-growing and most complex health plan lines of business representing significant growth opportunities for payers. Launching and/or managing a successful MA market requires careful, strategic planning to meet requirements, ensure compliance, and maximize the program benefits for your organization.

Success in this market will depend on success in each of the following essential areas:

Value-based contractingClinical documentation and codingDelivering high quality careManaging utilization

This course will touch on all four essential areas of MRA Operations.

Learn more or Register here

Review the Agenda below:

Risk Adjustment Operations

Medicare Risk Adjustment OverviewHistory of Medicare Risk AdjustmentKey Concepts and TermsRisk Adjustment DataRisk Adjustment ProcessRisk Adjustment Data Validation

CMS-HCC Risk Models

PY 2020 CMS HCC Risk Adjustment ModelPY 2021 CMS HCC Risk Adjustment ModelPY 2022 CMS HCC Risk Adjustment Model

Calculating Risk Scores and Payments

General Payment RulesData Submissions and PaymentsPY 2020 Risk Score CalculationsPY 2020 CMS-HCC Payment Calculation ExamplePY 2021 Risk Score CalculationsPY 2021 CMS-HCC Payment Calculation Example

Optimizing RA Operations

Network Adequacy GuidanceMedicare Star RatingsGrowth and RetentionReports and ResourcesVisit www.ERM365.org to see more courses. 

For the 2020 performance year, MIPS eligible clinicians, groups, and virtual groups can submit an application to the Centers for Medicare and Medicaid Services (CMS) asking the agency to re-weight one or more performance categories to 0% due to the COVID-19 public health emergency. This means if you have concerns about the impact of the COVID-19 public health emergency on your performance data – including cost measures – you can submit an application to CMS and cite COVID-19 as the reason for your application.

CMS has recently announced that it will be extending the deadline for COVID-19-related 2020 Merit-based Incentive Payment System (MIPS) Extreme and Uncontrollable Circumstances Exception applications to February 1, 2021.

If you have concerns about the effect the COVID-19 public health emergency will have on your performance data for the 2020 performance period, including cost measures,  submit an application now and make sure you cite COVID-19 as the reason for your application. The deadline to submit a MIPS Promoting Interoperability Performance Category Hardship Exception application or an Extreme and Uncontrollable Circumstances application not related to COVID-19 remained December 31, 2020. If you are already exempt from reporting Promoting Interoperability data, you don’t need to apply.

Once you have an approved application, you can still receive scores for the Quality, Improvement Activities and Promoting Interoperability performance categories if you submit data. If the Cost performance category is included in your approved application, you will not be scored on cost measures even if other data are submitted. It is important to note that you cannot submit an application to override data for program year 2020 that has already been submitted and any data submitted either before or after an application has been approved will be scored. 

MIPS Extreme and Uncontrollable Circumstances Exception Application Deadline Extended to February 1, 2021 – Policy & Medicine

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Let’s Talk About Risk On-Demand

Join us on-demand for this event recorded 11/11/2020. The presentation is an introduction to risk adjustment and HCC coding for coders, physicians and other healthcare professionals.

Approved by the AAPC for 2 CEUs - only $14.99


Review the Agenda:

Section 1 – Risk Adjustment Basics

This section will cover basic concepts and terminology in the CMS-HCC Model of Risk Adjustment.

What is an HCC?Why are HCCs important?How is a risk score calculated?What is the value of an HCC?What are the most common HCCs?

Section 2 – Rules of the Road

This section will cover ICD-10 Guidelines and other “rules” related to clinical documentation and coding within the CMS-HCC Model of Risk Adjustment.

When should a diagnosis be coded?How often can a diagnosis be codedWhat clinical documentation is needed to support the diagnosis?Is it okay to code for resolved conditions?Would it be acceptable to code a diagnosis documented as “suspected” in an outpatient setting such as a provider’s office?

Section 3 – HCC Coding

This section will review the most common HCC’s for Medicare enrollees based on MedPAC data.

What are the twenty most common HCC categories for Medicare enrollees?What are the most common ICD-10 codes included in each category?How can clinical documentation impact code selection?What are common errors leading to inaccurate risk scores?

Section 4 – Tips for Success

This section will cover simple tips that will make a big impact. At the end of this lesson you will be able to work smarter not harder.

What should be included in the problem list?Why does clinical documentation need to clarify active vs. history of?What small changes can you start making today that will have a big impact on the accuracy of your risk scores?


Who Should Attend? 

Coders, Billers, and AuditorsPhysicians, NPs and PAsMedical Assistants and Front Office Price: $14.99Purchase includes a copy of the presentation and other resources. 180 days of access to course and materials. 


On Demand Course Instructions for CEUs:

Login or Register for a FREE account with ERM365.Purchase the course.Click on “My Dashboard” and then “My Courses” to access.Download the handouts and other resources.Watch the video.Pass the post quiz.Download CEU Certificate. Would you prefer to attend a LIVE event? Visit https://erm365.org/events/ to view the schedule and register. 

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Advanced Risk Management and HCC Coding for Value Based Payments On-Demand

Join us on-demand for this event recorded on 11/13/2020. This course is an advanced course on risk adjustment and HCC coding for coders, physicians and other healthcare professionals.

Approved by the AAFP and AMA for 5 CMEs and the AAPC for 7 hours CEUs – only $49.00



Vast changes are coming to Medicare risk adjustment in 2021 and beyond. Is your team ready? What are the potential impacts to your revenue?Discuss the importance of managing HCCs year over year. What resources are available from CMS to help?What are the components of a risk score and how is it calculated? What is the impact of the payment count?Review NEW HCCs and see what documentation is needed to validate payment.Simple steps for optimizing risk adjustment operations and associated revenue.Take a deep dive into the grey areas and red flags of HCC coding and clinical documentation. See what your team should and should not be coding. 


Physicians and Other ProvidersCoders, CDI Specialists and AuditorsNurses, Medical Assistants and ScribesMedical Directors and CIOsMA, Medicaid and Commercial PlansACO, MSO and IPA TeamsHospitals and Academic CentersCommunity Health, RHCs and FQHCsHealth Alliance Members

PRICE: $49

On Demand Course Instructions for CEUs:

Purchase the course Download the handoutsWatch the videoPass the post testDownload CEU CertificateSubmit post course surveyWould you prefer to attend a LIVE event? We have several upcoming LIVE events - view the schedule and/or register here https://erm365.org/events/

On October 2, 2020, Health and Human Services (HHS) Secretary, Alex M. Azar II, announced the renewal of the public health emergency declaration due to the continued consequences of the COVID-19 pandemic. The 90-day renewal is effective October 23, 2020, and extends until January 20, 2021.

The renewal impacts a number of regulatory flexibilities and temporary rules applicable to health care providers including, but not limited to, 1135 Waivers, HIPAA enforcement discretion, and fraud and abuse enforcement discretion – all of which are effective only for the duration of the public health emergency.

1135 Waivers

Section 1135 of the Social Security Act grants HHS the power to waive and/or modify certain federal healthcare requirements during a federal emergency to (i) ensure individuals enrolled in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) have sufficient access to health care items and services and (ii) protect health care providers furnishing such items and services in good faith during emergency conditions against penalties for noncompliance.

Presently, HHS and the Centers for Medicare and Medicaid Services (CMS) have issued numerous “blanket” waivers and state-specific Medicaid waivers in connection with the COVID-19 public health emergency (including waivers related to sanctions under the physician self-referral law (Stark Law) for COVID-19 purposes).

These waivers afford health care providers enhanced flexibility with regard to Medicare telehealth services, waive certain physician hospital privilege requirements/credentialing process requirements, and suspend many reporting requirements.

HIPAA Enforcement Discretion

The HHS Office of Inspector General (OIG) has issued various guidance providing for OIG enforcement discretion with regard to certain provisions of HIPAA (e.g., privacy, security, and breach notification rules) as it relates to permissible telehealth practices, business associates making disclosures for public health purposes, and community-based testing sites (CBTSs).

Note that in conjunction with the relaxation of certain federal HIPAA privacy and security rules during the public health emergency, health care providers should continue to be cognizant of compliance with other applicable state privacy laws to the extent they are still in effect.

Fraud and Abuse Enforcement Discretion

In connection with applicable HHS waivers, the HHS Office of Inspector General (OIG) has issued guidance relaxing the imposition of administrative sanctions under the Anti-Kickback Statute and Stark Law for certain COVID-19 response activities (see also this OIG Policy Statement regarding physicians and other practitioners that reduce or waive amounts owed by federal health care program beneficiaries for telehealth services during the public health emergency).

Note that HHS retains the discretion to terminate the public health emergency at any time and is not required and/or obligated to extend the present declaration beyond its January 20, 2021 expiration. Accordingly, health care providers should be mindful of termination, expiration, and renewal timelines applicable to COVID-19 related emergency measures, which could immediately eliminate current regulatory flexibilities (such as the ones discussed herein).

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Visit www.erm365.org to learn more. 

It has taken CMS more than 50 years, but the agency has finally proposed a regulatory definition for determining whether an item or service is "reasonable and necessary" for Medicare coverage purposes. Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of "Reasonable and Necessary," 85 Fed. Reg. 54327 (Proposed Rule, September 1, 2020). This move comes in response to the President's October 3, 2019 Executive Order 13890 directing the Secretary of HHS to ensure that Medicare beneficiaries have access to new cures and technologies that improve health outcomes. While CMS simultaneously seeks to establish a Medicare coverage pathway for medical devices designated as breakthrough by the FDA in this proposed rule, the proposed regulatory definition, including a possible consideration of whether an item or service is covered in the commercial insurance market, marks some progress toward clarifying when Medicare coverage is available. Comments to the proposed rule must be received by November 2, 2020.

"Reasonable and Necessary"

CMS explains that it is proposing to establish in regulations the factors it has historically used in making "reasonable and necessary" determinations under Section 1862(a)(1)(A), with "some modification." 85 Fed. Reg. at 54329. It acknowledged that stakeholders have expressed interest in codifying this definition for many years and that the proposed definition is "familiar and functional." 85 Fed. Reg. at 54328. The factors used by CMS for this purpose are set forth in the Medicare Program Integrity Manual (MPIM) and state that:

An item or service is considered "reasonable and necessary" if it is

(1) safe and effective;(2) not experimental or investigational; and(3) appropriate, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it isfurnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient's condition or to improve the function of a malformed body member;furnished in a setting appropriate to the patient's medical needs and condition;ordered and furnished by qualified personnel;one that meets, but does not exceed, the patient's medical need; andat least as beneficial as an existing and available medically appropriate alternative.

MPIM, CMS 100-08, ch. 13, § 13.5.4.

In addition to codifying the above criteria, CMS is proposing to include a separate basis under which an item or service would be "appropriate for Medicare patients" based on commercial health insurers' coverage policies (non-governmental entities that sponsor health insurance plans). And, CMS states that an "item or service deemed appropriate for Medicare coverage based on commercial coverage would be covered on that basis without also having to satisfy the bullets listed above." 85 Fed. Reg. at 54328.

By considering commercial health insurer coverage policies, CMS states that it would bring together the expertise of private payers and the Medicare program. Under this separate basis, CMS proposes that an item or service would satisfy factor (3) above if it is "covered under a plan(s) coverage policy if offered in the commercial insurance market, unless evidence supports that differences between Medicare beneficiaries and commercially insured individuals are clinically relevant." 85 Fed. Reg. at 54332. Under this proposal, CMS would exclude Medicaid managed care, Medicare Advantage, and other government administered health care coverage programs from the types of coverage CMS would consider, as these enrollees are not in the commercial market. CMS believes this definition is a "significant step in meeting the E.O.'s directive to bring clarity to coverage standards."

CMS specifically seeks comment on a myriad of issues related to this proposed definition, which include, among others, the following:

The sources of data that could be used to implement this policy;The most appropriate source(s) for these coverage policies and best way to determine which commercial plan(s) it would rely on for Medicare coverage;Whether beneficiaries, providers, innovators, or others wishing to gain coverage for an item or service demonstrate that the item or service is covered by at least one commercial insurance plan policy. If they can provide CMS with evidence of commercial coverage or if CMS or its MACs identify such coverage from its review of compilations of health insurance offerings or data from other sources, CMS would consider factor (3) to be satisfied;Whether CMS should limit its consideration of commercial plan offerings or covered lives to a subset of the commercial market in the interest of simplicity, including looking at geographic subsets, subsets based on number of enrollees, subsets based on plan type (HMO, PPO, etc.), or other subsets of plans – including utilizing a singular plan; andWhether CMS should adopt the most or least restrictive coverage policy since commercial plans may impose certain restrictions on an item or service (related to clinical criteria, disease stage, or number and frequency of treatment).

85 Fed. Reg. at 54332-54333.

In sum, CMS is proposing to define the term "reasonable and necessary" based on the factors currently found in the MPIM, plus an alternative basis for meeting factor (3) based on any coverage in the commercial market. As CMS states, it is soliciting comment on this proposed definition of reasonable and necessary as well as other mechanisms or definitions it could establish for the term "reasonable and necessary" and the merits and drawbacks associated with each, including the potential impact on Medicare program expenses or complexity.

Key Takeaways

To be sure, CMS did not propose this regulatory definition in a vacuum. This definition, if finalized, would be codified within 42 C.F.R. Part 405, Subpart B, which addresses "Medical Services Coverage Decisions that Relate to Health Care Technology." In this proposed rule and not discussed in detail here, CMS also seeks national Medicare coverage for breakthrough devices that are FDA market-authorized and used consistent with the FDA approved or cleared indication for use. For these devices, CMS will deem coverage under the MCIT pathway "reasonable and necessary under section 1862(a)(1)(A) of the Act because the device has met the unique criteria of the FDA Breakthrough Devices Program." 85 Fed. Reg. at 54329.

What is markedly absent from this proposed regulatory definition is an explicit requirement that this new regulatory definition be used solely for medical devices participating in the MCIT pathway and/or the FDA Breakthrough Devices Program. In fact, CMS explains:

Further, under our proposal, each MAC would be responsible for reviewing commercial offerings to inform their LCDs or claim by claim decisions, which would include individual medical necessity decisions. We may also allow the MACs to develop approaches to address any or all of the considerations outlined above, parallel to their current practice of making coverage decisions in the absence of an NCD or national policy.

85 Fed. Reg. at 54332.

While it remains to be seen whether claim adjudicators may utilize this proposed regulatory definition for other services or items outside of the FDA Breakthrough Devices Program or MCIT pathway, this could be useful for individual consideration of Medicare claims since any additional clarification to the subjective "reasonable and necessary" is helpful.

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Effective Dates

The 2021 ICD-10-CM files below contain information on the ICD-10-CM updates for FY 2021. These 2021 ICD-10-CM codes are to be used for discharges occurring from October 1, 2020 through September 30, 2021 and for patient encounters occurring from October 1, 2020 through September 30, 2021.


2021 Coding Guidelines (PDF)

2021 POA Exempt Codes (ZIP)

2021 Code Descriptions in Tabular Order (ZIP)

2021 Addendum (ZIP)

2021 Code Tables and Index (ZIP)

2021 Conversion Table (ZIP)

Overview of Changes

The final update includes hundreds of new ICD-10-CM codes including (but not limited to):

128 additions to Chapter 19: Injury, poisoning and certain other consequences of external causes for adverse effects and poisoning by fentanyl and tramadol as well as other synthetic narcotics.125 additions to Chapter 20: External causes of morbidity, including more specific codes for collisions involving electric scooters and other nonmotor vehicle accidents.57 musculoskeletal codes, including several in category M24.- (other specific joint derangements) for other articular cartilage disorders, disorders of ligament, pathological dislocation, recurrent dislocation, contracture, and ankylosis.21 codes to describe withdrawal from substances including alcohol, cocaine, and opioids.18 detailed codes for sickle cell anemia. New codes such as D57.213 (sickle-cell/Hb-C disease with cerebral vascular involvement) and D57.431 (sickle-cell thalassemia beta zero with acute chest syndrome) specify complications related to the condition.Three codes to capture stage 3 chronic kidney disease (CKD) in two new sub-stages. The new Chapter 22: Codes for Special Purposes (U00-U85) so far includes just two codes: U07.0 (vaping-related disorder) and U07.1 (COVID-19), which took effect in the early part of this year.The final update deletes code Q51.20 (other doubling of uterus, unspecified) and all codes within subcategory T40.4X- (poisoning by adverse effect of and underdosing of other synthetic narcotics), without code replacements.Visit ERM365 to learn more


Why OIG Did This Audit

This audit involved individuals eligible for Medicare who were covered under traditional Medicare in one year but chose to enroll in Medicare Advantage (MA) the following year (transferred enrollees). The Centers for Medicare & Medicaid Services (CMS) maps certain diagnosis codes into Hierarchical Condition Categories (HCCs). For transferred enrollees who, while covered under traditional Medicare, receive a diagnosis that maps to an HCC, CMS makes higher payments to MA organizations for the following year.

Through data mining and discussions with medical professionals, we have identified several diagnosis codes that were at high risk of being miscoded and resulting in inaccurate payments. For this audit, we focused only on selected acute stroke diagnosis codes (which map to the Ischemic or Unspecified Stroke HCC) that were reported on one physician's claim without being reported on a corresponding inpatient claim.

Our objective was to determine whether selected acute stroke diagnosis codes submitted by physicians under traditional Medicare that CMS later used to make payments to MA organizations on behalf of transferred enrollees complied with Federal requirements.

How OIG Did This Audit

We reviewed 582 of 8,437 transferred enrollees (that we selected with a stratified random sample) who received one instance of a high-risk acute stroke diagnosis code during 2014 or 2015. We had reviews performed to determine whether the medical records supported the submitted diagnosis codes. We relied on these reviews as the basis for our conclusions.

What OIG Found

Almost all of the selected acute stroke diagnosis codes that physicians submitted to CMS under traditional Medicare and that CMS later used to make payments to MA organizations for 2015 or 2016 on behalf of the 582 transferred enrollees did not comply with Federal requirements. For 580 of the transferred enrollees, the medical records did not support the acute stroke diagnosis codes. Thus, the Ischemic or Unspecified Stroke HCCs were not validated.

These errors originated from physicians submitting incorrect acute stroke diagnosis codes on claims billed under traditional Medicare. However, these errors were unnoticed and caused inaccurate payments in MA because CMS did not have policies and procedures to (1) identify beneficiaries who transferred from traditional Medicare to MA, and (2) evaluate whether the acute stroke diagnosis codes submitted under traditional Medicare on their behalf complied with Federal requirements. As a result, we estimated that CMS made inaccurate payments of just over $14.4 million to MA organizations.

What OIG Recommends and CMS Comments

We recommend that CMS (1) educate physicians on how to correctly submit acute stroke diagnosis codes and how these diagnosis codes may impact the MA program, and (2) develop and implement policies and procedures to identify beneficiaries transferring from traditional Medicare to MA and evaluate whether the acute stroke diagnosis codes submitted under traditional Medicare comply with Federal requirements.

CMS concurred with our recommendations and described actions that it had taken or planned to take to address them. Specifically, CMS stated that it would continue to educate physicians on how to correctly submit acute stroke diagnosis codes, including updated information on how these codes may impact the MA program. CMS also stated that although our findings account for less than 0.5 percent of all transferred enrollees, it would review its existing policies and procedures to evaluate whether any further clarification is needed with regards to acute stroke diagnoses.

Filed under: Centers for Medicare and Medicaid Services


Key Takeaways:

Billions in estimated risk-adjusted payments supported solely though HRA’s raise concerns about the completeness of payment data, validity of diagnoses on HRA’s and quality of care coordination for beneficiaries.

OIG findings highlight concerns about the extent to which MAOs are using HRAs to improve care and health outcomes, as intended, and about the sufficiency of the oversight by the Centers for Medicare & Medicaid Services (CMS).

From an analysis of 2016 MA encounter data, the OIG found that:

Diagnoses that MAOs reported only on HRAs, and on no other encounter records, resulted in an estimated $2.6 billion in risk-adjusted payments for 2017.

In-home HRAs generated 80 percent of these estimated payments. Most in-home HRAs were conducted by companies that partner with or are hired by MAOs to conduct these assessments—and therefore are not likely conducted by the beneficiary’s own primary care provider.

Twenty MAOs generated millions in payments from in-home HRAs for beneficiaries for whom there was not a single record of any other service being provided in 2016.

Read the full report here

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 1948 - 2020

George Franklin Smith, M.D., 71, passed away on August 25, 2020 in Austin, Texas.

He was born November 25, 1948 in San Augustine, Texas.

George graduated with a Bachelor of Arts from the University of Texas at Austin, and then went on to earn his Masters of Science in Public Health from the University of Texas Health Science Center at Houston's School of Public Health.

He earned his Doctor of Medicine from the University of Texas Medical Branch at Galveston in 1977, where he was the presiding senior of the Phi Chi Medical Fraternity.

He practiced family medicine in Austin for a decade, during which time he held multiple leadership positions at St. David's South Austin Medical Center, including Chairman of the Board of Trustees. He then went on to serve as President of PCA Medical Group of Texas, P.A. and Vice President of Medical Affairs and then Executive Director of the Central Texas Market at PCA Health Plans of Texas, Inc./Humana, Inc. in Austin from 1990 through 1998, and then as Chief Medical Officer of HealthFirst HMO, Inc. in Tyler, Texas.

He rejoined Humana in San Antonio, Texas in 2001, where he served as Vice President and Chief Medical Officer for the South Texas market, and then as Regional President of Senior Products for the Southwest Region until his retirement in 2013.

He served in leadership positions in various professional organizations and was a great mentor to many colleagues. After his retirement he kept busy with consulting roles.

George lived life to the fullest. He had a passion for the outdoors, including hunting, fishing, hiking and gardening. He loved Texas Longhorns football and playing poker with dear friends. He also loved cooking for family and friends, hosting parties, and enjoying great food and wine with his fellow Chaine des Rotisseurs members. In his retirement, George spent much of his time traveling to new places near and far. A sixth generation Texan, descendant of The Old 300 and a member of the Sons of the Republic of Texas, he loved Texas and its history. He also had a passion for reading, and was taking seminar courses through the University of Texas's OLLI SAGE program.

He is predeceased by his parents, Leonard Louis Smith and Gladys Nichols Smith, and his first wife, Kelly Reynolds Smith. He is survived by his daughter Megan (Brad) Demicco of Dallas, son Garrett (fiancé Danelle Cantu) of Austin, grandchildren Andrew and Julia Demicco of Dallas, sweetheart Marilyn Davis of Austin, sister-in-law Morna Reynolds (Lee) Erwin of Knoxville, Tennessee, and many extended family members and dear friends. We will miss George's kind and generous spirit, great stories, and wonderful sense of humor.

In lieu of flowers, donations may be made to the University of Texas Medical Branch at Galveston or an animal rescue organization of your choice.

A celebration of George's life will be held at a later date.


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