Direct Answer
MIPS (Merit-based Incentive Payment System) is the primary quality reporting program for eligible clinicians under the Quality Payment Program (QPP). MIPS affects Medicare payment — a low MIPS score in a performance year results in a payment penalty (applied two years later), while high performance can earn a positive adjustment. MIPS has four performance categories: Quality (traditionally 45% weight), Cost (15%), Promoting Interoperability (25%), and Improvement Activities (15%). Providers who do not participate receive an automatic negative payment adjustment. Strategic MIPS participation — selecting appropriate measures and performance targets — is both a compliance requirement and a revenue protection strategy.
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MIPS Eligibility and Exceptions
Not all Medicare clinicians are subject to MIPS. MIPS eligibility requires meeting two thresholds: billing more than $90,000 in Medicare Part B allowed charges, and having more than 200 Medicare Part B patients in the determination period. Clinicians below both thresholds are excluded from MIPS for that performance year (though they can voluntarily participate). New Enrollees (Medicare providers in their first year of participation) are also excluded. Clinicians participating in Advanced Alternative Payment Models (AAPMs) that meet qualifying participant criteria earn a 5% APM incentive payment and are excluded from MIPS. Understanding whether your practice and individual clinicians are MIPS-eligible each year — and capturing any applicable exclusions — is the first step in MIPS program management.
Quality Performance Category
The Quality category requires reporting at least 6 quality measures (or all measures in a specialty-specific measure set if fewer than 6 measures are available) for at least 70% of eligible cases (for claims-based submission) or all eligible cases (for registry or EHR submission) across a 12-month performance period. At least one measure must be an outcome measure or, if no outcome measure is available, a high-priority measure. MIPS quality measures are compared against national benchmarks — the performance score for each measure is based on your case-weighted performance rate relative to the national benchmark for that measure. Measure selection strategy matters: choosing measures where your practice performs well relative to national benchmarks maximizes quality score without requiring practice transformation.
Cost Performance Category
The Cost category score is calculated automatically by CMS using claims data — no submission required. CMS calculates two cost measures for all eligible clinicians: Total Per Capita Cost (TPCC, the total cost of care for Medicare beneficiaries attributed to the clinician) and Medicare Spending Per Beneficiary Clinician (MSPB-C, cost efficiency of care around inpatient stays for attributed cases). Additional episode-based cost measures may apply to clinicians with sufficient case volume in specific clinical episodes. Because Cost scoring uses a two-year lookback and applies to attributed beneficiaries (patients with a plurality of Medicare visits with that clinician), practices have limited levers to improve Cost scores quickly — but managing post-acute care utilization and care transitions is the primary driver of cost performance.
Promoting Interoperability
The Promoting Interoperability (PI) category replaced Meaningful Use and measures EHR utilization and health information exchange. PI has a base score (required measures that must be reported to avoid a score of zero) and a performance score from optional measures. Required base score measures include: e-Prescribing (required measure), Health Information Exchange — Send (required), and Security Risk Analysis (exclusion is not possible — must be attested). The PI category requires using a 2015 CEHRT (Certified EHR Technology) or later — practices using outdated EHR systems that are not 2015 CEHRT certified face scoring limitations. Certain hardship exceptions and reweighting options exist (for clinicians who qualify as small practices, in rural areas, or in non-patient-facing roles) that can shift PI category weight to other categories.
Improvement Activities
The Improvement Activities (IA) category requires achieving at least 40 points through reported improvement activities. High-weighted activities (20 points each) include: care coordination initiatives, depression screening and follow-up, participation in a QCDR (Qualified Clinical Data Registry), and systematic collection of patient experience data. Medium-weighted activities (10 points) include a broad range of care delivery improvements. Completing two high-weighted activities or one high-weighted and two medium-weighted activities typically achieves the full 40 points. Small practices (15 or fewer clinicians) receive automatic double credit for IA activities. Practices already engaged in PCMH (Patient-Centered Medical Home) recognition earn automatic full credit for the IA category. IA has among the most straightforward paths to full credit — many activities reflect good clinical practice that practices may already be doing without formally documenting for MIPS purposes.
FAQ
What is the MIPS payment adjustment timeline?
MIPS operates on a two-year lag: performance in Year X determines payment adjustments in Year X+2. Performance in the 2024 calendar year (the 2024 performance period) determines Medicare payment rate adjustments applied to payments made in calendar year 2026. The maximum negative adjustment is -9% for clinicians who do not participate or score at the performance threshold or below. Maximum positive adjustments depend on the total available MIPS adjustment budget — historically in the range of +1% to +2% for all high performers combined (the positive budget is limited by the negative adjustment pool collected). Exceptional performance (scoring above the exceptional performance threshold) has historically earned additional bonus payments, though CMS has adjusted these parameters annually.
What is an Advanced Alternative Payment Model and how does it relate to MIPS?
Advanced Alternative Payment Models (AAPMs) are CMS-approved payment models that require participants to bear more than nominal financial risk and use certified EHR technology. Examples include Medicare Shared Savings Program ACOs (Track 2/Track 3, ENHANCED Track), Bundled Payments for Care Improvement Advanced (BPCI-A), and Comprehensive Primary Care Plus (CPC+). Clinicians who meet the Qualifying Participant (QP) threshold for an AAPM — receiving a sufficient percentage of their payments through the AAPM — are excluded from MIPS and instead receive a 5% bonus on their Medicare payments through 2025 and a higher fee schedule update after 2025. Participation in an AAPM is both a quality program strategy and a payment strategy — practices evaluating whether to pursue AAPM participation should model both the MIPS exclusion benefit and the operational requirements of the AAPM.
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