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MIPS Overview

The Merit-based Incentive Payment System (MIPS) is one of two tracks under the Quality Payment Program, which moves Medicare Part B providers to a performance-based payment system.

MIPS streamlines three historical Medicare programs — the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VM) Program and the Medicare Electronic Health Record (EHR) Incentive Program (Meaningful Use) — into a single payment program.

All Medicare Part B providers who meet the definition of a MIPS eligible clinician should plan to participate in MIPS in 2017 or they will be subject to a negative 4% payment adjustment on Medicare Part B reimbursements in 2019.

MIPS Participation: Individual vs. Group Reporting

One unique aspect of MIPS is that eligible clinicians have the option to participate as either an individual or as part of a group. An individual eligible clinician would report MIPS data to CMS under an NPI number that is tied to a single TIN. Two or more eligible clinicians (with unique NPIs) who have reassigned their billing rights to a single TIN have the option to participate in MIPS as a group. If eligible clinicians choose to participate in MIPS as a group, they will be assessed as a group across all four MIPS performance categories.

Pick Your Pace for Participation in MIPS for the Transition Year

To help Medicare providers transition into the new payment methodologies included under MACRA, CMS has designated 2017 as a “transition year” for the Quality Payment Program, which means there are four participation options for eligible clinicians with varying requirements as it relates to reporting data to CMS. To find out more about MIPS participation options in 2017, click here.

MIPS Test Pace
MIPS Partial Year
MIPS Full Year
Advanced Alternative Payment Model
Submit a minimum amount of data after January 1, 2017 and avoid a negative payment adjustment in 2019. Report data to CMS for a 90-day performance period that begins after January 1, 2017.
Avoid a negative payment adjustment and be eligible to earn a small positive payment adjustment.
Fully participate in MIPS starting January 1, 2017 and report data to CMS for the full performance period (Jan 1, 2017 through Dec 31, 2017).
Avoid a negative payment adjustment and be eligible to earn a modest positive payment adjustment
Some eligible clinicians may be in practices that choose to participate in an Advanced Alternative Payment Model in 2017.
Note that eligible clinicians participating in an Advanced APM to do not automatically avoid the MIPS payment adjustment.

It is important to note that the minimum amount of data required to meet MIPS Test Pace requirements and to avoid a negative payment adjustment in 2019 is defined for each MIPS performance category. To meet partial and full year MIPS participation requirements, eligible clinicians may be required to report additional data for each MIPS performance category.

Breaking down MIPS

MIPS is a performance-based payment system composed of four categories that provide clinicians the flexibility to choose the activities and measures that are most meaningful to their practice. An eligible clinician’s performance in each of the four weighted performance categories is combined to create the MIPS Composite Performance Score, also known as the MIPS Final Score, which is used to determine Medicare Part B payment adjustments in future years.

The four performance categories included in MIPS are:

  • Quality . The Quality category of MIPS replaces the Physician Quality Reporting System (PQRS) and requires eligible clinicians to report data to CMS for quality measures related to patient outcomes, appropriate use of medical resources, patient safety, efficiency, patient experience and care coordination. In 2017, the Quality category will make up 60% of an eligible clinician or group’s MIPS Final Score.
  • Advancing Care Information. The Advancing Care Information (ACI) category of MIPS replaces the Medicare EHR Incentive Program (Meaningful Use). This category will reflect how well clinicians use EHR technology, with a special focus on objectives related to interoperability and information exchange. In 2017, the ACI category will make up 25% of an eligible clinician or group’s MIPS Final Score.
  • Improvement Activities. The Improvement Activities category of MIPS is intended to encourage eligible clinicians to participate in activities that improve clinical practice in areas such as shared decision making, patient safety, coordinating care, and increasing access. In 2017, the Improvement Activities category will make up 15% of an eligible clinician or group’s MIPS Final Score.
  • Cost. The Cost category of MIPS (also known as Resource Use) replaces the CMS Value-based Payment Modifier program and evaluates eligible clinicians on measures related to resource utilization, calculated using Medicare claims. In 2017, the Cost category will be weighted at 0%, which means it will not be incorporated into the MIPS Final Score this year . CMS has said that this category’s weight will increase in future MIPS performance periods.

MIPS Payment Adjustments

MIPS payment adjustments reflect an eligible clinician’s performance two years prior – which means that payment adjustments for the 2017 transition year will be applied to Medicare Part B reimbursements starting on January 1, 2019. The MIPS payment adjustment amount will be determined based on an eligible clinician or group’s MIPS Final Score, which can be maximum of 100 points. In 2017, the payment adjustments and associated MIPS Final Scores will be as follows:

MIPS Final Score

Payment Adjustment

≥ 70 points

  • Positive adjustment
  • Eligible for the exceptional performance bonus, which means at least an additional 0.5%

4-69 points

  • Positive adjustment
  • Not eligible for exceptional performance bonus

3 points

  • Neutral payment adjustment

0 points

  • Negative payment adjustment of -4%
  • 0 points means an eligible clinician did not participate

The exceptional performance bonus is an annual pool of $500,000,000 incentive dollars that are allocated to eligible clinicians who are part of the top tier of MIPS participants in a given performance year. Only MIPS participants (individual clinicians or groups) are eligible for the exceptional performance bonus.

Source : Centers for Medicare and Medicaid Services. Merit-based Incentive Payment System webinar. November 29, 2016.

What is the Quality Payment Program?

Quality Payment Program is the name given to the new Medicare value-based reimbursement system. The program has two tracks for participation: MIPS and APM

Learn more >>

What are APMs?

MACRA allows providers who take further steps towards transforming healthcare to be exempt from MIPS and participate in Advanced Alternative Payment Models (APMs).

Learn more >>

How to prepare

Individual eligible providers can prepare to meet all MIPS measures and be ready to avoid penalties and earn bonuses on January 1, 2017.

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