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iRCM is an industry leader with innovative technology and an expert team. We are a complete Revenue Cycle Management solution that streamlines reimbursements and delivers remarkable results.
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iRCM is an industry leader with innovative technology and an expert team. We are a complete Revenue Cycle Management solution that streamlines reimbursements and delivers remarkable results.
The Merit-based Incentive Payment System (MIPS) is a program under Medicare designed to tie physician payments to quality and cost efficiency in care.
Established by the 2015 MACRA law (Medicare Access and CHIP Reauthorization Act), MIPS is one of two tracks in Medicare’s Quality Payment Program (the other being Advanced Alternative Payment Models).
It consolidates several earlier Medicare quality initiatives into a single framework, pushing healthcare providers toward value-based care instead of volume-based fee-for-service.
In this comprehensive guide, we’ll explain what MIPS is, how MIPS works, MIPS criteria for participation, performance categories (like MIPS quality measures), reporting requirements.
Our goal is to provide a highly educational overview for healthcare providers and related stakeholders, with insights on MIPS management and the promotion of solutions to succeed under this program.
MIPS was born out of MACRA, landmark legislation that repealed the Sustainable Growth Rate (SGR) formula for Medicare physician fees.
MACRA established the Quality Payment Program (QPP) in 2017, offering two pathways for provider reimbursement:
1- The Merit-based Incentive Payment System (MIPS)
2- Advanced Alternative Payment Models (APMs)
The intent was to spur a transition toward value-based care, where clinicians are rewarded for quality and outcomes rather than volume of services.
Under MACRA’s QPP, most Medicare Part B providers default to MIPS unless they qualify for the Advanced APM track. MIPS essentially consolidated three legacy Medicare programs:
The Physician Quality Reporting System (PQRS), the Value-Based Payment Modifier (VBM), and the Medicare EHR Incentive “Meaningful Use” Program, into a single system.
These former programs were restructured as MIPS performance categories: Quality, Cost, and Promoting Interoperability (PI) (formerly Meaningful Use), with a new category added for Improvement Activities (IA).
Not all healthcare clinicians are required to participate in MIPS. Medicare has defined eligibility criteria (often called the MIPS low-volume threshold) to determine which providers are mandated to take part. Key MIPS criteria for eligibility include a provider’s Medicare Part B patient volume and billing amounts:
Clinicians who, in a given year, bill $90,000 or less in Medicare Part B allowed charges OR see 200 or fewer Medicare patients OR provide 200 or fewer covered services to Medicare patients are excluded from MIPS.
(In other words, to be required to participate in MIPS, a provider must exceed all three of those thresholds (billing > $90k, >200 patients, >200 services). Those below any of these thresholds are exempt from mandatory MIPS reporting as low-volume providers.
Clinicians who qualify as Qualifying Participants (QPs) in an Advanced Alternative Payment Model are excluded from MIPS (Partial QPs can elect to participate in MIPS or not.)
Certain clinicians with special statuses (e.g. small practices, hospital-based clinicians) or those who face extreme circumstances (natural disasters, etc.) can be exempt or have modified requirements.
For example, clinicians practicing predominantly in hospitals or ERs may be exempt from the Promoting Interoperability category and those in rural areas with no internet can apply for hardship exemption for EHR reporting.
If a provider is below the low-volume threshold but meets some criteria, CMS allows an opt-in option. Clinicians who meet one or two of the three volume criteria (but not all) can choose to opt in to MIPS and be subject to payment adjustments.
Many do this if they expect a high score (and bonus) or want to gain experience with MIPS. Otherwise, non-eligible providers can also report voluntarily without penalties or bonuses.
To check status, clinicians can use the CMS QPP Participation Lookup Tool with their NPI to see if they are required to participate in MIPS for the year. Generally, eligible clinician types for MIPS include physicians (MD/DO and specialists like dentists, podiatrists, etc.), physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and starting in recent years additional practitioners like physical/occupational therapists, clinical psychologists, social workers, and others who bill Medicare Part B certified nurse anesthetists, and starting in recent years additional practitioners like physical/occupational therapists, clinical psychologists, social workers, and others who bill Medicare Part B.
MIPS in healthcare is essentially a performance-based scoring system that affects Medicare payments. Here’s how it works in a nutshell:
1- Performance Year: MIPS runs on an annual cycle. The performance period is a calendar year (January 1 – December 31). During this year, clinicians work on meeting MIPS measures and activities.
2- Data Reporting: After the year ends, participants have a data submission window (usually until March 31 of the following year) to report MIPS data for the year.
Clinicians (or their practices) submit data on the various performance categories (quality measures, improvement activities, etc.) via the chosen reporting method.
We will discuss MIPS reporting in healthcare in more detail later.
3- Performance Categories and Scoring: MIPS evaluates clinicians across four performance categories (described in the next section) and assigns a numeric score (0 to 100) known as the MIPS Final Score.
Each category contributes a percentage to this composite score. The performance in each category (measured against benchmarks) is translated into points, which are weighted and summed to calculate the final MIPS score.
4- Performance Threshold and Payment Adjustment: The MIPS final score is compared against a yearly performance threshold (a target score determined by CMS). If your score is above the threshold, you earn a positive payment adjustment (bonus); if below, you incur a negative adjustment (penalty); if equal, you are neutral (no change).
For example, in recent years the performance threshold has been 75 points (out of 100). Clinicians scoring above 75 earn bonuses, those below 75 are penalized, and a score of 75 yields no change. The payment adjustments are applied to future Medicare Part B payments, on a two-year delay.
So your performance in a given year affects your Medicare reimbursements two years later. A 2024 MIPS score, for instance, will determine adjustments to your 2026 Medicare payments.
5- Budget Neutrality and Adjustment Range: MIPS is required by law to be budget-neutral. This means the total bonuses paid out equal the total penalties collected (aside from any extra bonus CMS might pay for exceptional performance, which through 2022 was funded separately).
As a result, the actual positive adjustment percentages can vary depending on how many clinicians earn bonuses vs penalties. There is a maximum penalty or bonus each year (capped by law).
Starting with the 2022 performance year onward, the max penalty is -9% of Medicare Part B payments, and the max bonus can reach up to +9% (scaled by a factor based on budget neutrality).
In practice, if many clinicians perform well (fewer penalties to fund bonuses), the top achievable bonus may be less than 9%.
For example, providers with a perfect MIPS score in a recent year (2022) received about +8.25% in 2024 payments, and due to broad participation CMS projected the maximum bonus for 2024 performance (paid in 2026) might be around +3%..
The penalty side, however, is fixed – failing to report MIPS can dock your Medicare payments by the full -9% in the adjustment year. In short, MIPS high performers can gain modest increases, while poor performers risk significant cuts.
6– Public Reporting: Beyond payments, MIPS scores are published publicly. CMS posts each clinician’s MIPS results on the Medicare Care Compare/Physician Compare website for patients and peers to see.High scores,signal to patients and partners that a clinician meets quality standards. The MIPS score even “travels” with the provider, if you change practices, your score (and its payment adjustment) follows your NPI to the new practiceit can also impact a provider’s reputation.
High scores, conversely, signal to patients and partners that a clinician meets quality standards. The MIPS score even “travels” with the provider, if you change practices, your score (and its payment adjustment) follows your NPI to the new practice.
To understand MIPS, one must understand its four performance categories. Each category evaluates a different aspect of care, and together they make up the MIPS score (each weighted a certain percentage of the total). The categories are: Quality, Cost, Promoting Interoperability (PI), and Improvement Activities (IA).
The Quality category replaces the old PQRS program and is arguably the centerpiece of MIPS. It measures the quality of care through specific quality measures. Clinical performance metrics on various aspects of patient care.
For the 2024 performance year, the Quality category generally accounts for 30% of the MIPS final score (this is true if all categories are scored; weight can be higher if another category is exempt, but typically 30%).
Clinicians must report at least 6 quality measures for the year (or a complete specialty measure set, if applicable).
One of the six must be an outcome measure (focused on patient outcomes) or, if no applicable outcome measure is available, a high-priority measure (e.g. patient safety, care coordination).
Each measure has specific specifications (denominator and numerator criteria) defining the patient population and the desired outcome/process.
There are hundreds of MIPS quality measures to choose from (approximately 200+ approved measures) covering various specialties and topic.
CMS also provides specialty measure sets, which are groupings of measures relevant to certain specialties (e.g. cardiology, orthopedics).
Clinicians can choose measures most pertinent to their practice, but they are not limited to their specialty set, you can report any measures on which you can collect data.
Common examples of quality measures include things like controlling high blood pressure, diabetes A1c control, preventive care screenings, outcome measures like surgical complication rates, patient experience survey results, etc.
For instance, a family physician might report measures such as colorectal cancer screening rates and influenza immunization rates, whereas a surgeon might report surgical infection rates and patient functional outcome improvements.
Quality measures can be reported via different methods: claims (for small practices), electronic health record (EHR) data submission, qualified registries or QCDR (Qualified Clinical Data Registries), or the CMS web interface (for larger groups).
Each measure reported is scored against a national benchmark on a 1–10 point scale (assuming a minimum case volume and data completeness is met).
To maximize points, clinicians should aim to report measures on at least 75% of eligible patients (data completeness requirement) and achieve high performance rates relative to benchmarks. The top 6 scoring measures count (up to 60 points, which is then 30% of MIPS).
If a clinician reports more than 6, CMS will take the highest scoring ones. Missing the required measures or data completeness can result in zero points for those measures, significantly hurting the Quality score.
The Cost category evaluates the economic efficiency of care essentially, how much it costs to care for your patients. Like Quality, the Cost category is weighted at 30% of the MIPS score in 2024(equal weight to Quality, as mandated in recent years).
A unique aspect of the Cost category is that clinicians do not have to submit any data for cost measures. CMS calculates Cost performance automatically based on Medicare claims. Throughout the year, CMS tracks the costs associated with the care you (and in some cases your clinical group) provide to patients.
CMS currently uses a set of cost measures that include some broad, population-based measures and several episode-specific measures. For example:
Each measure has criteria for attributing patients to clinicians and then calculates the Medicare payments for those patients’ care. The clinician’s costs are compared to national benchmarks (risk-adjusted) and scored.
Similar to quality, each cost measure is scored out of 10 points. CMS will calculate all applicable cost measures for a clinician (not all measures apply to everyone; it depends on having enough cases for each measure).
Those are then averaged for a total Cost category score. If a clinician doesn’t meet the case minimum for any cost measure (i.e., too few patients), the Cost category is reweighted to 0% and its weight is redistributed to other categories (e.g., Quality becomes 60% in that scenario)
The Promoting Interoperability (PI) category (formerly known as Advancing Care Information, and before that the Meaningful Use EHR Incentive Program) is all about effective use of certified electronic health record (EHR) technology to improve patient care. PI generally counts for 25% of the MIPS final score
To participate in PI, clinicians must use a certified EHR system (2015 Edition Cures Act certification as of recent rules).If you don’t have a Certified EHR (CEHRT), you essentially cannot earn points in PI – and non-participation in PI will usually result in a zero for 25% of your MIPS score (and thus likely a penalty).
Certain exemptions exist (e.g., hospital-based clinicians or hardship exemptions) where the PI category can be reweighted to 0%, but most outpatient practices are expected to report PI.
The PI category measures how well clinicians use EHR functionality to promote care coordination and patient engagement. CMS has a set of PI objectives, each with specific measures that are scored. The current objectives include:
Each measure in these objectives has a numerator/denominator or a yes/no attestation. For example, one measure might be the percentage of patient visits for which a summary of care was sent electronically to the next provider. Another might simply be attesting “Yes, I participated with an immunization registry.”
The PI category is scored out of 100 points (which will then be weighted to 25% of the MIPS score). Each measure contributes a certain number of points. For instance, e-Prescribing might be up to 10 points, health information exchange measures might be 20 points each, etc., totaling 100.
Performance-based measures are scored by performance rate (e.g., 100% e-prescribing = full points; 50% might earn half points), whereas some are simply earned by attestation (yes/no).
There are also required measures that if not fulfilled, can result in a zero for the entire PI category (for example, not conducting a Security Risk Analysis or not enabling patient portal access can jeopardize your PI score).
Starting with 2024, CMS now requires a minimum 180-day reporting period for PI (up from the previous 90-day minimum).
This means clinicians must use their EHR meaningfully for at least half the year to earn full credit, aligning the requirement with the Medicare Promoting Interoperability Program in hospitals.
The Improvement Activities (IA) category is a bit different from the others – it rewards clinicians for engaging in activities that improve clinical practice, such as care coordination, patient engagement, and patient safety efforts. IA contributes 15% to the MIPS final score.
Clinicians earn points by attesting to clinical improvement activities they performed during the year. CMS provides a list of over 100+ Improvement Activities to choose from.
Examples include things like implementing care coordination agreements, expanding practice access with after-hours appointments, using telehealth services, participating in research registries, behavioral health integration, medication therapy management programs, and many others.
Each improvement activity is assigned either “high weight” (20 points) or “medium weight” (10 points). A standard MIPS participant needs a total of 40 points from activities to get full credit (40 points = 100% in this category).
For instance, a clinician could do 2 high-weight activities (2×20 = 40), or 1 high-weight + 2 medium-weight (20 + 2×10 = 40), or 4 medium-weight (4×10), etc., to reach 40 points. Small practices (< 15 clinicians) get double credit for each activity (so a high-weight counts 40, etc.), effectively halving the number of activities needed.
In 2024, CMS has signaled future simplification: for 2025 they even planned to reduce it to 1–2 activities total depending on practice size, but for 2024 the requirements remain similar to prior years.
Other common activities include care coordination (e.g., timely communication of test results to patients), population management (like using registries to track chronic conditions), or patient safety training.
MIPS reporting in healthcare refers to the processes and systems through which healthcare providers submit their MIPS performance data. Here’s what providers need to know about reporting:
Reporting Timeline: As mentioned, the performance year runs January–December. Data reporting generally occurs in the first quarter of the following year. For example, for the 2024 performance year, the data submission window opens January 2, 2025 and closes March 31, 2025 (approximately).
It’s crucial to meet the deadline failing to report by end of March means CMS will score you based on whatever data they have (which for many will result in a 0 score and a penalty). Thus, early preparation for submission is key.
Reporting Methods: Medicare offers multiple reporting options for MIPS data
For example, you might attest “Yes, we did X improvement activity” and enter your PI measure numerators/denominators directly on the portal for those categories. Many users who don’t use a registry or EHR submission will manually attest their IA and PI on the portal.
When reporting as a group, data from all clinicians under the tax ID are aggregated. Groups can use similar methods (registry, EHR, etc.). One special option for groups is the CAHPS for MIPS survey, which, if conducted via approved vendors, can count as a quality measure.
Submission and Verification: Once data is submitted (via any method), CMS provides a confirmation. After submission, there is usually a period where you can view your preliminary score on the QPP portal and even update submissions up until the deadline. It’s wise to submit data well before the deadline to allow time to fix any issues (like failed file uploads or measure calculation errors).
Failure to Report: It must be emphasized that not reporting (for those who are required) leads to an automatic penalty. Specifically, if a MIPS-eligible provider does not submit any data, they will receive a MIPS score of 0 and incur the maximum negative adjustment (−9% to their Medicare payments). Even minimal reporting is better than none (there are hardship exceptions, but those must be applied for in advance if you cannot report due to circumstances).
Data Accuracy and Audit: The data submitted is subject to audit. CMS can request documentation to verify the accuracy of reported measures and activities for up to several years post-submission. Therefore, providers should keep thorough records (for example, screenshots of EHR reports, lists of patients who met quality measures, proof of Improvement Activities conducted, etc.). Accuracy in reporting is crucial – intentional falsification can carry penalties beyond MIPS.
Because MIPS is a program under Medicare, its implications are directly financial for practices that see Medicare patients.
MIPS is essentially a mechanism for Medicare to adjust Part B reimbursements based on performance. For healthcare providers, this means MIPS can significantly impact revenue:
High MIPS performers stand to earn more than the standard Medicare fee schedule amount for their services. For example, a clinician who exceeds the performance threshold might receive a +up to 9% increase on all Medicare Part B payments for the adjustment year
Although, as noted, due to budget neutrality the actual increase could be smaller, every percentage point matters in today’s margins.
Over the course of a year, a +5% or +2% adjustment on all Medicare billings can amount to tens of thousands of dollars for a busy practice.
Conversely, a low performer will lose a percentage of their Medicare payments. The maximum penalty is −9% off all Part B reimbursements.
To put that in perspective, if a provider billed $100,000 to Medicare, a 9% cut is $9,000 lost. For some, it could be much more. These penalties can drastically reduce or even wipe out profit margins for practices that rely heavily on Medicare income.
Clinicians who hit exactly the performance threshold (e.g., 75 points) neither gain nor lose – they receive a neutral adjustment (0%). Essentially, they get the standard fee schedule amount with no multiplier.
It’s important to budget and plan, knowing that the financial effect hits later. For instance, a practice underperforming in 2024 won’t feel the cut until 2026, but it will then persist for the entire year of 2026.
Similarly, improvements made in one year yield higher payments two years later. This lag means practices should be proactive; waiting until a penalty hits is too late to correct that year’s outcome.
MIPS payment adjustments are applied at the level of the individual clinician (NPI), but they are specific to each Tax ID (practice) the clinician bills under. If a doctor works at two different practices, their MIPS score under each practice’s reporting could differ, and Medicare payments to each practice for that doctor’s services get adjusted according to that practice-specific score.
However, if a physician switches jobs, their MIPS score moves with them to the new practice’s payments. This also means healthcare organizations may check a physician’s historical MIPS scores when hiring, as an indicator of quality and a predictor of future Medicare reimbursement impact.
MIPS directly affects Medicare Part B professional services payments. It does not directly change Medicare Advantage or other insurers’ payments (though indirectly, it signals quality to other payers).
Medicaid and commercial insurers are not under MIPS, though some have similar value programs. However, the existence of MIPS in Medicare has encouraged other payers to also implement quality incentive programs.
Implementing MIPS is not a one-time compliance task. It is an operational system that needs structure, ownership, and live visibility. Done right, it protects revenue, avoids penalties, and builds a measurable quality story for your practice.
Each performance year, begin by reviewing current MIPS criteria, eligibility, and applicable measures for your specialty and care model.
Select quality measures and improvement activities that genuinely fit your services, data reality, and patient mix.
Build workflows around those measures from day one so data is captured naturally in routine care instead of rushed at year end.
Certified EHR technology should be the backbone of MIPS management. Confirm you are using a certified system with all required Promoting Interoperability functionalities enabled, including patient portal, e prescribing, secure exchange, and public health reporting.
Configure dashboards and automated reports to monitor quality performance, PI measures, and data completeness in real time. Digital intake, screening tools, and structured templates can feed directly into measures, reduce manual workload, and close care gaps more consistently.
MIPS performance is a team sport. Clinicians, MAs, nurses, and front-desk staff must know which measures matter and what actions are expected in each encounter.
Hardwire steps like tobacco use screening, BP documentation, follow up planning, and portal enrollment into standard workflows.
Many practices formally assign a MIPS or quality lead to track progress, share scorecards, and flag slippage early.
Treat low scores as signals, not surprises. Review performance monthly or quarterly. If a measure underperforms, check documentation, workflows, and outreach.
Use simple PDSA style cycles to fix issues. Select Improvement Activities that reinforce real clinical gains, such as behavioral health integration, care coordination, expanded access, or population health tracking, so you strengthen both IA scoring and clinical outcomes.
If internal capacity is thin or regulations are complex, involve MIPS specialists or consulting partners.
They can help interpret annual rules, align measure selection with your risk profile, and design a realistic reporting strategy, especially for borderline eligible practices or multi site organizations.
Specialized MIPS solutions and registry platforms can integrate with your EHR, standardize data capture, calculate estimated scores continuously, and submit to CMS accurately. Strong tools provide:
MIPS is recalibrated every year. Monitor CMS QPP updates, Final Rules, measure specifications, and submission requirements.
Assign responsibility to one person or team to track these changes and translate them into concrete adjustments for your measures, PI configuration, and reporting methods.
Keep an eye on MIPS Value Pathways as they evolve, especially if there is an MVP that aligns tightly with your specialty.
Maintain a structured MIPS documentation archive for each year. Store:
In multi clinician environments, decide strategically between individual, group, or virtual group reporting.
Group reporting can simplify operations and help weaker performers benefit from stronger peers.
Individual reporting can protect high performers where variation is wide. Reevaluate this choice annually based on performance patterns and organizational goals.
MIPS has redefined how Medicare rewards quality and accountability. By understanding how MIPS works and aligning operations with its requirements, healthcare providers can protect reimbursements, improve patient outcomes, and strengthen overall performance.
The key is disciplined management. Plan early, engage your staff, track your data continuously, and adapt to every rule change. When done right, MIPS isn’t just compliance—it’s a financial and reputational advantage.
At iRCM, our Quality Payment Program Services help providers simplify MIPS management, automate reporting, and maximize their performance scores. From measure selection to real-time dashboards and CMS submission, we handle the complexity so your practice can focus on care.
iRCM is an industry leader with innovative technology and an expert team. We are a complete Revenue Cycle Management solution that streamlines reimbursements and delivers remarkable results.
