The Merit-based Incentive Payment System (MIPS) is the government’s primary program designed to shift how Medicare pays clinicians. Established by the Centers for Medicare & Medicaid Services (CMS), MIPS moves away from paying for the volume of services toward rewarding the value and quality of care delivered. This performance-based system evaluates eligible clinicians, including dermatologists, across multiple categories. The goal is to improve patient care quality and outcomes while controlling the overall cost of healthcare delivery for Medicare beneficiaries.
The Foundation of MIPS
MIPS is one of the two main pathways under the Quality Payment Program (QPP), created by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. This legislation fundamentally changed how the federal government reimburses providers, replacing previous payment formulas with a structured, value-based approach. The MIPS final score, which ranges from zero to 100 points, determines whether a clinician receives a positive, neutral, or negative adjustment to their Medicare Part B payments.
The total MIPS score is derived from performance across four distinct categories, each weighted differently. The Quality category, typically weighted at 30%, measures the quality of care provided using specific evidence-based metrics. The Cost category, also weighted at 30%, evaluates the efficiency and resource utilization associated with patient care.
The remaining two categories focus on practice operations and technology adoption. Improvement Activities (IA), accounting for 15% of the score, reward clinicians for engaging in activities that improve clinical practice, such as patient safety protocols or expanded access. The Promoting Interoperability (PI) category, constituting 25% of the score, assesses the meaningful use of certified Electronic Health Record (EHR) technology to share information and engage patients. These categories combine to create a comprehensive picture of a clinician’s performance, driving the transition to value-based care.
MIPS Application in Dermatology Practices
Dermatologists must select and report on a specific set of measures tailored to their specialty to achieve a high Quality score. For instance, a measure might track the appropriate follow-up care for a patient diagnosed with melanoma, ensuring timely re-excision or necessary imaging. Other quality metrics focus on chronic skin conditions, such as documenting the improvement in patient-reported itch severity for those with psoriasis or dermatitis.
The Improvement Activities category requires dermatologists to implement specific processes that enhance patient care coordination and access. This involves establishing systems for the timely communication of abnormal pathology results to patients or participating in a qualified clinical data registry to benchmark performance. Successful participation requires maintaining these activities for a continuous period of at least 90 days within the performance year.
The Cost category is unique because dermatologists do not submit any data; CMS calculates the score using administrative claims data. CMS assesses measures related to the overall cost of care for common conditions and procedures, such as the total per capita cost for attributed Medicare beneficiaries. Performance in this category encourages dermatologists to select cost-effective, yet clinically sound, diagnostic and treatment pathways.
The Promoting Interoperability category assesses how dermatologists use their certified EHR systems to exchange health information securely. This involves demonstrating the use of electronic prescribing, providing patients with electronic access to their health records, and engaging in health information exchange for better care coordination. This requirement drives technology adoption and the secure digital flow of patient data.
Understanding MIPS Scoring and Payment Adjustments
A clinician’s performance across the four categories is combined to generate a final MIPS Composite Performance Score (CPS) on a scale of 0 to 100. CMS establishes an annual performance threshold score, which determines the financial outcome for the clinician. Clinicians scoring above the threshold receive a positive payment adjustment, while those scoring below it incur a negative adjustment.
The financial adjustment is applied to the clinician’s Medicare Part B payments two years after the performance year. Performance data collected in one calendar year determines the payment adjustment applied to claims submitted two years later. The maximum negative adjustment is capped at -9%, while the potential positive adjustment can exceed this percentage.
The MIPS program is designed to be budget-neutral. Negative adjustments collected from lower-scoring clinicians fund the positive incentives given to high-scoring clinicians. This competitive structure means that simply meeting the performance threshold results in a neutral adjustment. Achieving a score significantly above the threshold is necessary to earn a meaningful positive incentive, encouraging continuous quality improvement.
Patient Implications of the MIPS Framework
The requirements of MIPS are intended to translate into tangible benefits for patients receiving dermatological care. By requiring reporting on specific measures, MIPS encourages the standardization of high-quality care protocols, especially for managing high-risk conditions like skin cancer. The focus on measuring patient-reported outcomes, such as the reduction of itch severity in chronic conditions, ensures that treatment success is defined by what matters most to the patient’s daily life.
MIPS promotes better communication and care coordination by incentivizing the use of certified electronic health records. This technology facilitates the secure and swift sharing of critical information, like pathology reports, with other providers involved in the patient’s care. Ultimately, the framework aims to reduce unnecessary procedures and control costs, leading to more efficient and patient-centered dermatology care.