The Merit-based Incentive Payment System (MIPS) is the government’s primary mechanism for moving the United States healthcare system away from paying for the volume of services provided to rewarding the value and quality of patient care. Established under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), MIPS is a component of the Quality Payment Program (QPP). This system evaluates eligible clinicians on standardized metrics, known as MIPS measures, which determine annual adjustments to Medicare Part B payments. The program’s design aims to incentivize providers to focus on better patient outcomes, smarter spending, and improved coordination of care.
Defining MIPS Measures
A MIPS measure is a specific, quantifiable metric used by the Centers for Medicare & Medicaid Services (CMS) to gauge an eligible clinician’s performance in quality, efficiency, or the use of health technology. These measures are the core data points that translate clinical work into a formal performance score. Each measure is precisely defined, consisting of a numerator, a denominator, and specific exclusion criteria. The denominator establishes the eligible patient population, while the numerator defines the specific action or outcome that should have occurred for those patients. Exclusion criteria allow clinicians to remove certain patients if a measure is clinically inappropriate for them. MIPS measures fall into different categories, each focusing on a different aspect of care delivery:
- Process measures look at the steps a clinician takes to deliver care, such as performing a specific test.
- Outcome measures focus on the patient’s resulting health state, like the rate of surgical complications.
- Structural measures assess the presence of resources and policies necessary for quality care.
- Efficiency measures evaluate the appropriate use of clinical activities under specific circumstances.
The Four Performance Categories
MIPS measures are organized into four distinct performance categories that collectively form a clinician’s comprehensive performance assessment: Quality, Improvement Activities, Promoting Interoperability, and Cost. These categories are assigned specific weights that contribute to the final MIPS score.
Quality
The Quality category assesses the quality of care delivered, requiring clinicians to report on measures that track clinical outcomes, patient safety, and treatment effectiveness. This category often holds the largest weight and includes metrics such as blood pressure control or appropriate use of antibiotics.
Improvement Activities
The Improvement Activities category focuses on clinical practice changes aimed at improving care processes, patient engagement, and access to care. Clinicians must attest to performing a certain number of activities for a minimum of 90 continuous days during the performance year. This category rewards proactive steps taken to transform the practice environment and streamline patient care workflows.
Promoting Interoperability
The Promoting Interoperability category measures the effective use of certified Electronic Health Record (EHR) technology. This section assesses a clinician’s ability to electronically exchange health information, manage patient access to their own data, and engage in public health reporting. The objective is to support seamless data sharing across the healthcare system, which improves communication and coordination.
Cost
The Cost category evaluates the total cost of care provided to patients, focusing on resource utilization. Clinicians do not need to submit data for Cost; CMS calculates performance using administrative claims data to determine measures like Medicare Spending Per Beneficiary (MSPB). This category ensures that quality care is delivered efficiently, aligning reimbursement with value rather than just spending.
Translating Performance into a Score
Performance across the four MIPS categories is aggregated into a single Composite Performance Score (CPS), which ranges from 0 to 100 points. The score is calculated by summing the points earned in each category, weighted by percentages set annually by CMS. The category weights can shift, and some categories may be reweighted to zero for certain specialties or for clinicians who meet specific exemption criteria, such as those who are non-patient-facing.
A Performance Threshold, determined annually, is the minimum score a clinician must achieve to avoid a negative payment adjustment. Clinicians scoring exactly at the threshold receive a neutral payment adjustment. The final MIPS score directly determines the payment adjustment—a percentage change applied to Medicare Part B payments two years after the performance year. Clinicians whose scores fall below the threshold receive a negative adjustment, while those who exceed the threshold can earn a positive payment adjustment. MIPS is designed to be a budget-neutral program, funded by penalties collected from underperforming clinicians.
Reporting Requirements and Deadlines
Eligible clinicians must actively collect and submit their performance data to CMS to receive a MIPS score and avoid the automatic negative payment adjustment. The typical MIPS reporting period aligns with the calendar year, running from January 1st through December 31st, with data submission generally due by March 31st of the following calendar year.
Clinicians have several mechanisms available for submitting their data, offering flexibility based on practice size and technical capabilities. These options include:
- Direct submission through the CMS Web Interface.
- Using certified Electronic Health Record (EHR) systems.
- Utilizing qualified registries and Qualified Clinical Data Registries (QCDRs).
- Claims-based reporting for Quality measures (for smaller practices).
The choice of submission method affects the number of measures available to report and the data completeness requirements.