The Merit-based Incentive Payment System (MIPS) came into effect on January 1, 2017. The purpose of introducing MIPS was to tie payments to quality and cost-efficient care. Notably, other objectives behind launching MIPS were to improve care processes and health outcomes, boost the use of healthcare information, and decrease the care cost.

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Quality Payment Program

What’s the Quality Payment Program?

The Medicare Access and CHIP Reauthorization Act (MACRA) was signed into law in 2015. MACRA replaced the Sustainable Growth Rate (SGR) formula, which would have reduced the payment rates for physicians that accept Medicare. It is required by MACRA to implement the Quality Payment Program (QPP), which is an incentive program. Based on their practice size, location, specialty, or patient population, clinicians can choose to participate in QPP in 2 ways:

  • MIPS: Merit-Based Incentive Payment System

  • APMS: Advanced Alternative Payment Method

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Merit-based Incentive Payment System

MIPS Score

In total, there are 4 performance categories that determine your final score. Your final score decides your payment adjustment. The four categories are:

  • Quality (45% of the final score)

    This performance category replaces Physician Quality Reporting System (PQRS). This category covers the quality of care delivered by medical practitioners, which is based on performance measures created by CMS (Centers for Medicare & Medicaid Services) and medical professional/stakeholder groups.

  • Improvement Activities (15% of the final score)

    This relatively new performance category gauges improvement in care processes, enhancement of patient engagement in care, and increase of access to care. This category allows physicians to choose the activities that are relevant to their practice from the classifications such as improving care coordination, expansion of access to practice, and shared decision-making of patient and clinician.

  • Promoting Interoperability (25% of the final score)

    The Advancing Care Information performance category was renamed by CMS to Promoting Interoperability (PI). It promotes patient engagement and the electronic exchange of health information using certified electronic health record technology (CEHRT). This is implemented by sharing data with other physicians or patients in a comprehensive and proactive manner.

  • Cost Measures (15% of the final score)

    This performance category of MIPS score replaces the Value-based Payment Modifier (VBM). CMS will calculate the cost of the services that physicians provide based on Medicare claims. MIPS uses cost measures to assess the total cost of care during a hospital stay or a year. Since the beginning of 2018, this performance category is being counted in the MIPS final score.

MIPS Composite Performance Score

MIPS Quality Measure Data

Participating physicians must collect measure data for the 12-month performance period (e.g., January 1 – December 31, 2021). The amount of data to be submitted depends on the collection type.

The Five Collection Types for Quality Measures:


  • The CAHPS for MIPS survey

  • Medicare Part B claims measures

  • Electronic Clinical Quality Measures

  • Qualified Clinical Data Registry Measures

Who is Eligible

If you’re an eligible clinician type, you must participate in MIPS if you

  • Exceed the low-volume threshold as an individual
  • Enrolled in Medicare before January 1, 2019
  • Don’t become a QP or Partial QP
  • Are part of an APM Entity with Partial QP Status that elects to participate in MIPS

MIPS Eligible Clinician Types

Clinical Nurse Specialists, Certified Registered Nurse Anesthetists, Qualified Audiologists, Clinical Psychologists, Registered Dietitians or Nutritional Professionals, Physician Assistants, Physical Therapists, Nurse Practitioners, and Occupational Therapists. Physicians (including doctors of medicine, osteopathy, dental surgery, dental medicine, podiatric medicine, and optometry; osteopathic practitioners.)

Why Report MIPS?

Financial rewards received by physicians under this system for providing good quality care, improvement, and reporting to the CMS. Moreover, physicians can earn a positive payment adjustment. However, if physicians choose not to report, they can be penalized and lose compensation.

  • MIPS: Merit Based Incentive Payment System

  • APMS: Advanced Alternative Payment Method

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