MIPS stands for the Merit-based Incentive Payment System, a federal program that adjusts the Medicare payments dermatologists and other clinicians receive based on how well they perform on a set of quality, cost, and technology benchmarks. Created by the Medicare Access and CHIP Reauthorization Act of 2015, MIPS replaced an older and widely criticized formula for calculating physician reimbursement. For dermatologists who bill Medicare Part B, the program is not optional: their scores directly determine whether their future payments go up, stay flat, or get cut.
Why MIPS Exists
Before MIPS, Medicare physician payments were governed by a formula called the Sustainable Growth Rate, which threatened steep, across-the-board cuts almost every year and required Congress to repeatedly intervene with temporary patches. The system was unpopular with virtually everyone involved. MACRA replaced it with a framework that ties payment adjustments to measurable performance rather than applying blunt spending caps. Dermatologists who provide Medicare Part B services are among the clinicians subject to MIPS reporting requirements.1Journal of the American Academy of Dermatology. Future considerations for clinical dermatology in the setting of 21st century American policy reform: The Medicare Access and Children’s Health Insurance Program Reauthorization Act and the Merit-based Incentive Payment System
The basic deal is straightforward: clinicians report data on their practice each year, CMS scores them on a 0-to-100 scale, and two years later their Medicare reimbursements are adjusted up or down based on where they land. A high score earns a bonus on top of every Medicare claim. A score below a set threshold triggers a penalty. Clinicians who fall in the middle see no change. The time lag matters: performance in 2024, for instance, affects payments in 2026.
The Four Performance Categories
MIPS scores are built from four weighted categories, each measuring a different dimension of practice. The weights CMS assigns to each category have shifted over the years as the program has matured, but the basic framework has stayed the same.
- Quality: This is the category most familiar to dermatologists. It asks clinicians to report on specific clinical measures, like whether patients with melanoma received appropriate follow-up or whether biopsy results were communicated within a certain timeframe. Clinicians choose from a menu of measures, and CMS scores their performance on each against national benchmarks.
- Cost: CMS calculates this category automatically using Medicare claims data, so clinicians do not report anything for it. It reflects the total cost of care attributed to a given provider, including downstream services like lab tests and prescriptions that stem from the clinician’s decisions.
- Improvement Activities: This category rewards clinicians for participation in activities that improve clinical practice. Examples include care coordination efforts, patient safety initiatives, or expanding access to care. Dermatologists can choose from a list of eligible activities and attest to completing them during the performance year.
- Promoting Interoperability: Formerly known as “Meaningful Use,” this category measures how effectively a practice uses certified electronic health record technology. It tracks actions like electronic prescribing, health information exchange, and providing patients with electronic access to their records.
Each category produces a score, and the weighted composite becomes the clinician’s final MIPS score. Quality has historically carried the largest weight, which is why specialty-specific quality measures matter so much in dermatology.
Dermatology-Specific Quality Measures
One of the more practical questions dermatologists face with MIPS is which quality measures to report. CMS maintains a large inventory of measures, but not all of them are relevant to skin conditions. Reporting measures that actually match what a dermatologist does in clinic produces better scores and more meaningful data. A 2018 analysis found that dermatologists who participated in MIPS reported improved performance, and those who achieved exceptional scores frequently relied on dermatology-specific measures rather than generic ones.2Journal of the American Academy of Dermatology. JAAD
Dermatology-specific measures cover areas like melanoma reporting and coordination, biopsy follow-up, appropriate use of systemic therapy for conditions like psoriasis, and screening practices. The American Academy of Dermatology has played an active role in developing and maintaining these measures so that dermatologists are not stuck reporting on metrics designed for primary care or surgical specialties that have little connection to their daily work.
This is where a tool called DataDerm comes in. DataDerm is the AAD’s own qualified clinical data registry, built specifically to help dermatologists collect, benchmark, and submit MIPS data. It pulls information from electronic health records and lets practices see in real time how they compare against national quality benchmarks.3Journal of the American Academy of Dermatology. The 2021 annual report of DataDerm: The database of the American Academy of Dermatology For many dermatologists, using a specialty registry like DataDerm is simpler and more cost-effective than trying to navigate MIPS reporting through a generic EHR vendor or third-party system.
How Mohs Surgeons Participate
Mohs micrographic surgery is one of the most procedurally intensive areas in dermatology, and Mohs surgeons interact with MIPS in slightly different ways than general dermatologists. A study of 2020 MIPS data found that 8,778 dermatologists and 2,148 Mohs surgeons received a MIPS score that year. Mohs surgeons most commonly participated through group reporting or as individuals. About three-quarters of Mohs surgeons scored high enough to receive a positive payment adjustment two years later.4PubMed. Performance and Quality Measure Selection by Mohs Surgeons in the 2020 Merit-Based Incentive Payment System
An interesting finding from that same analysis was the gap in specialty measure use depending on practice type. Nearly all individual dermatologists and dermatology-only groups reported on dermatology- or Mohs-specific quality measures. But among multispecialty groups that included Mohs surgeons, only about 6% reported those specialty measures.4PubMed. Performance and Quality Measure Selection by Mohs Surgeons in the 2020 Merit-Based Incentive Payment System That is a substantial difference. It suggests that when dermatologists are embedded in large multispecialty practices, the group-level reporting strategy often defaults to generic measures chosen to fit the broadest range of clinicians in the group, leaving dermatology-specific metrics on the table.
For individual Mohs surgeons, this creates a real strategic question. Reporting through a group can simplify administration and spread the compliance burden, but it may mean your MIPS score reflects measures that have little to do with skin surgery. Reporting individually or through a dermatology-only group makes it easier to use specialty measures, which tend to produce higher and more meaningful scores.
When MIPS Measures Fall Short
A score that satisfies MIPS does not always mean a patient is getting the best possible outcome. This tension has been studied most directly in psoriasis. MIPS quality measures for psoriasis treatment typically define success using broad response thresholds, asking whether a patient’s symptoms improved by a certain percentage from baseline. But the clinical standard many dermatologists now aim for is PASI 90, meaning a 90% or greater improvement in the Psoriasis Area and Severity Index, a much higher bar than MIPS requires.
A study comparing patients who met PASI 90 against those who satisfied the MIPS response criteria but fell short of PASI 90 found significant differences across the board. The PASI 90 group reported meaningfully larger improvements in skin pain, itch, quality of life, and work productivity compared to those who only met the MIPS threshold.5PubMed Central. Value of PASI90 Versus Merit-Based Incentive Payment System Efficacy Measures Every patient who achieved PASI 90 also met the MIPS criteria, but the reverse was not true: plenty of patients cleared the MIPS bar while still experiencing meaningful symptoms and reduced quality of life.
The practical takeaway here is that MIPS is a payment and reporting system, not a clinical guideline. Meeting its benchmarks is necessary for avoiding payment penalties and earning bonuses, but it does not substitute for the higher therapeutic goals that dermatologists and patients increasingly expect. The gap between “good enough for MIPS” and “the patient is doing genuinely well” is real, and it is one of the more serious criticisms of how quality measurement intersects with dermatologic care.
COVID-19 Exemptions and Their Aftermath
The pandemic disrupted MIPS participation in dermatology just as it disrupted everything else. Starting with the 2020 performance year, CMS allowed clinicians to opt out of MIPS reporting entirely under an extreme and uncontrollable circumstances exemption tied to the COVID-19 public health emergency.6Journal of the American Academy of Dermatology. The 2022 Annual Report of DataDerm: The database of the American Academy of Dermatology Clinicians who claimed this exemption received a neutral payment adjustment, meaning no bonus but also no penalty, regardless of whether they reported any data.
This exemption was widely used. In the Mohs surgeon analysis discussed earlier, about one in five Mohs surgeons received a neutral adjustment in connection with the COVID-19 exemption.4PubMed. Performance and Quality Measure Selection by Mohs Surgeons in the 2020 Merit-Based Incentive Payment System For practices that were shut down, operating at reduced capacity, or redeploying staff during surges, the exemption made sense. But it also meant that several years of MIPS data have gaps, making it harder to track trends in dermatology performance across the pandemic period.
The exemption has since expired, and clinicians are again expected to report fully. Practices that leaned on the exemption for multiple years may face a steeper learning curve returning to routine MIPS reporting, particularly if staff turnover has disrupted institutional knowledge about which measures to choose, how to document them, and when to submit.
Who Is Exempt from MIPS Under Normal Circumstances
Even outside of pandemic-era exceptions, not every dermatologist is subject to MIPS. CMS sets low-volume thresholds each year: if a clinician bills Medicare for fewer than a certain number of patients, claims, or total allowed charges, they are automatically excluded from the program. The exact thresholds are updated annually, but in recent years, clinicians billing Medicare for roughly 200 or fewer patients or under a certain dollar amount have been exempt. Newly enrolled Medicare clinicians also receive a grace period during their first year.
For dermatologists in primarily private-pay or cosmetic practices, MIPS may barely register. But for any practice with a substantial Medicare patient population, participation is effectively mandatory. Failing to report at all does not just forfeit the bonus: it triggers the maximum penalty, which has been as high as a 9% reduction in Medicare payments.
MIPS Value Pathways
CMS has been gradually introducing a more streamlined reporting option called MIPS Value Pathways, or MVPs. The idea behind MVPs is to bundle a smaller, more coherent set of measures around a specific clinical topic rather than letting clinicians pick from the entire catalog. For dermatology, this could mean a pathway focused on skin cancer management or chronic inflammatory skin disease, where the quality measures, improvement activities, and cost measures all relate to a single clinical focus area.
MVPs are still relatively new, and participation has been optional for most clinicians so far. But CMS has signaled that MVPs will eventually become the primary reporting framework, replacing the traditional MIPS approach. For dermatologists, the shift could be welcome: a curated set of relevant measures is easier to report well than a grab bag of generic options. The risk is that if dermatology-specific pathways are not designed carefully, the specialty could end up shoehorned into pathways that do not reflect the breadth of dermatologic practice.
What MIPS Means If You Are a Patient
If you are a Medicare beneficiary seeing a dermatologist, MIPS affects you indirectly but meaningfully. Your dermatologist’s MIPS score influences how much Medicare pays them for your care, and over time, practices that consistently score poorly face financial pressure that can affect staffing, technology investment, and appointment availability. A practice that earns bonuses has more resources to invest in things like better EHR systems, shorter wait times, and newer treatment options.
You can actually look up your dermatologist’s MIPS score. CMS publishes performance data through its online tool, though the information runs two years behind the current year because of the reporting lag. The scores are aggregated, so you will not see how your specific provider performed on individual measures, but you can get a general sense of whether a practice is above or below the national benchmark.
That said, a high MIPS score is not a perfect proxy for clinical excellence. As the psoriasis research illustrates, the bar MIPS sets for “quality” can be lower than what dermatologists and patients would consider genuinely good outcomes.5PubMed Central. Value of PASI90 Versus Merit-Based Incentive Payment System Efficacy Measures A dermatologist who scores well on MIPS is doing the administrative work correctly and meeting minimum performance standards. Whether they are delivering cutting-edge care, staying current with the latest biologic therapies, or spending enough time listening to your concerns are questions MIPS was not designed to answer.
Common Misconceptions About MIPS in Dermatology
One widespread confusion is that MIPS is a quality certification, like a board certification or accreditation. It is not. MIPS is a payment adjustment mechanism. A dermatologist with a perfect MIPS score has demonstrated proficiency in reporting and meeting CMS benchmarks, but those benchmarks are minimum standards, not markers of excellence. Conversely, a dermatologist with a low score may be providing outstanding clinical care but struggling with the reporting infrastructure.
Another misconception is that MIPS only matters to large practices. In reality, solo dermatologists and small groups face some of the steepest challenges. They have fewer administrative staff to handle reporting, less bargaining power with EHR vendors for MIPS-compatible software, and a narrower patient base over which to spread compliance costs. The data on Mohs surgeons showed that individual reporters and dermatology-only groups used specialty measures at very high rates, suggesting that smaller, focused practices can do well if they invest in the right reporting tools, but the administrative burden per clinician is heavier than in a large hospital system where a compliance department handles much of the work.
Finally, some patients assume that if their dermatologist participates in MIPS, it means their care is being rationed or constrained by cost metrics. The cost category does exist, but it is calculated from claims data that CMS already has. Your dermatologist is not making treatment decisions based on what will optimize their cost score. The cost category is designed to flag outlier spending patterns across large patient panels, not to penalize individual clinical decisions. If your dermatologist recommends a biologic for your psoriasis or a Mohs procedure for your skin cancer, those decisions are driven by clinical judgment, not by MIPS arithmetic.