What the MIPS system is and who it affects

The Merit-Based Incentive Payment System (MIPS) is a federal program that adjusts how much Medicare pays doctors based on their performance. If you are a physician, advanced practice provider, or medical group that bills Medicare, MIPS determines whether your payments go up, stay flat, or go down each year. The system measures performance across four categories: care quality, improvement activities, promoting interoperability (health IT), and cost. Your payment adjustment is calculated annually and takes effect the following year.

MIPS applies to most clinicians who bill Medicare more than a threshold amount. For 2024, the threshold is $10,000 in Medicare billing, though this changes year to year. If you bill less than that, you are exempt. Some clinicians are also exempt if they are part of an Advanced Alternative Payment Model (APM), which is a different arrangement with Medicare altogether.

Key Takeaways

  • MIPS adjusts your Medicare payment rate up or down based on performance data you report or that is reported on your behalf.
  • You must report data in four performance categories: quality measures, improvement activities, interoperability, and cost.
  • The payment adjustment is calculated in the year you report data but does not take effect until the following year.
  • Small practices and those billing under the annual threshold may be exempt, and some clinicians in Advanced APMs do not participate in MIPS.
  • Reporting can happen through your EHR vendor, a may have access to registry, a may have access to clinical data registry, or direct submission to CMS.

The four performance categories MIPS measures

MIPS collects data in four separate domains, and your score in each one contributes to your overall payment adjustment. The Quality category measures how well you deliver care — things like whether you screen patients for depression, manage blood pressure in diabetic patients, or follow cancer screening guidelines. You choose which quality measures to report from a list of hundreds maintained by the Centers for Medicare & Medicaid Services (CMS). Most practices report between 6 and 10 measures that match their patient population and specialty.

The Improvement Activities category rewards you for participating in activities that improve care delivery. Examples include implementing care coordination protocols, using shared decision-making tools, or participating in a patient safety evaluation system. You pick two or more improvement activities from a list of dozens. Unlike quality measures, which require ongoing data collection, improvement activities are reported as yes-or-no: you either did the activity or you did not.

The Promoting Interoperability category (formerly called Meaningful Use) measures your use of certified electronic health record (EHR) technology. It looks at whether you are sending summaries of care to other providers, using find messaging with patients, and reporting clinical quality data electronically. This category is largely automated if your EHR is certified and properly configured.

The Cost category is calculated by CMS using claims data — you do not report it yourself. It measures total per-beneficiary costs for your attributed patients, episode-based costs for specific conditions, and whether you are managing high-cost patients efficiently. CMS pulls this data directly from Medicare claims.

How your payment adjustment is calculated

Your MIPS score is built from your performance in each of the four categories, weighted differently depending on your specialty and the year. In 2024, Quality counts for 30 percent of your score, Improvement Activities for 15 percent, Promoting Interoperability for 25 percent, and Cost for 30 percent. These weights shift year to year, so you should check CMS guidance annually.

Your performance in each category is compared to a benchmark — usually the median performance of clinicians in your specialty. If you score above the benchmark, you earn points; if you score below, you lose them. Your total points are converted to a payment adjustment that ranges from -9 percent to +3 percent of your Medicare payments, though CMS adjusts these caps annually. A clinician who scores at the benchmark receives a 0 percent adjustment.

The adjustment is applied to all your Medicare billing the following year. If you earned a +2 percent adjustment in 2024, your Medicare payment rates increase by 2 percent starting January 1, 2025. Conversely, a -3 percent adjustment reduces your payments by 3 percent across the board.

Who reports the data and how it gets to CMS

You do not have to report MIPS data yourself. Most practices use one of four reporting pathways. The most common is through your EHR vendor — if your electronic health record is certified for MIPS, it can automatically extract quality and interoperability data and submit it to CMS on your behalf. This happens with no additional work on your part beyond using the system normally.

If your EHR does not support MIPS reporting, you can use a may have access to registry — a third-party service that collects your data and submits it to CMS. Registries are common in specialties like cardiology, orthopedics, and oncology. You enter data into the registry's portal, and they handle submission. Some registries charge a fee; others are free.

A may have access to clinical data registry (QCDR) is similar to a may have access to registry but is often specialty-specific and may include measures not on the standard CMS list. QCDRs exist for fields like gastroenterology, rheumatology, and urology. You can also submit data directly to CMS using their portal, though this is rare because it requires manual data entry and is labor-intensive for practices of any size.

If you are part of a medical group, your group may report on your behalf through a group submission. In this case, your individual performance is rolled into the group's overall score, and the payment adjustment applies to the whole group rather than to you individually.

Exemptions and alternatives to MIPS

You are exempt from MIPS if your Medicare billing falls below the annual threshold — currently $10,000. This exempts many part-time clinicians, those in rural areas with low Medicare volume, and clinicians who bill primarily through other payers. The threshold is adjusted each year, so check CMS guidance if you are close to the limit.

Clinicians in an Advanced Alternative Payment Model (APM) do not participate in MIPS. An Advanced APM is an arrangement where you accept financial risk for your patients' outcomes — for example, accountable care organizations (ACOs), patient-centered medical homes (PCMHs), and bundled payment models. If you are in an Advanced APM that meets CMS thresholds for revenue and patient volume, you are exempt from MIPS and instead participate in that model's own payment and reporting structure.

Some clinicians also may have access to for small practice exemptions or rural exemptions depending on their location and practice size, though these have become narrower in recent years. Check the CMS MIPS website to determine your status.

What happens if you do not report

If you are subject to MIPS and do not report data, CMS assumes you scored at zero and applies a negative payment adjustment — typically -4 to -9 percent depending on the year. This is a significant financial penalty. Even a poor MIPS score from reporting is usually better than the penalty for not reporting at all.

If you realize mid-year that you have not reported, you can still submit data before the important date — usually March 31 of the following year. Late submission is accepted, though CMS may explore a small penalty for missing the primary important date. If you miss the important date entirely, you are stuck with the non-reporting penalty for that performance year.

Frequently Asked Questions

Does MIPS explore to my practice if we are a small group?

MIPS applies to most practices regardless of size if they bill more than the annual Medicare threshold — currently $10,000. Very small practices or those with low Medicare volume may be exempt. Check your total Medicare billing for the previous year against the current threshold to determine whether you are subject to MIPS.

Can I choose which quality measures to report?

Yes. CMS publishes a list of hundreds of quality measures, and you select the ones that match your specialty and patient population. Most practices report 6 to 10 measures. Your EHR or registry can help you choose measures that your system already tracks, which reduces the reporting burden.

What if my EHR does not support MIPS reporting?

You can report through a may have access to registry or may have access to clinical data registry instead. Many registries are free or low-cost and handle data submission for you. If you are considering switching EHRs, MIPS reporting capability is worth evaluating as part of your decision.

How much can my Medicare payment change because of MIPS?

Your payment adjustment ranges from -9 percent to +3 percent of your Medicare revenue, though CMS adjusts these caps annually. Most clinicians who report score between -2 and +2 percent. The adjustment applies to all your Medicare billing the following year, so even a small percentage change affects your annual revenue significantly.

If I am in an ACO, do I still have to report MIPS?

Not if your ACO is an Advanced Alternative Payment Model that meets CMS thresholds. You would instead report under your ACO's own performance framework. Confirm with your ACO whether it qualifies as an Advanced APM, because some ACOs do not meet the threshold and their clinicians must still report MIPS separately.