Understanding the Merit-Based Incentive Payment System

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The Merit-Based Incentive Payment System (MIPS) adjusts eligible clinician's Medicare payments based on performance in four categories: 

• Quality
• Cost
• Promoting Interoperability
• Improvement Activities

MIPS Eligibility and Participation Options 

Physicians and multiple other clinician types are eligible for and required to participate in MIPS, as long as they also meet certain other requirements as outlined by CMS.¹

Eligible clinicians may participate in MIPS as individuals or at the group practice or APM Entity level. Each year, CMS evaluates each Tax Identification Number/National Provider Identifier (or TIN/NPI) combination, as well as each (TIN), for MIPS eligibility. A single clinician (NPI) who bills Medicare under multiple TINs will receive an eligibility determination for each unique TIN/NPI combination he or she practices under and may be required to satisfy the requirements of MIPS under each separate practice. Additional information about the MIPS eligibility determination process and timeline can be found here.

CMS also evaluates clinicians and groups to determine if they fall into any special status categories (e.g., hospital-based, small practice, rural, etc.). Special status clinicians and groups must still participate in MIPS, but qualify for reduced reporting requirements in certain performance categories. 

CMS also will identify practices and clinicians who are "facility-based" and eligible for facility-based scoring. In general, group practices and clinicians identified as facility-based are attributed to a single facility with a Hospital Value-Based Purchasing (VBP) score. CMS will automatically use the VBP Program score of the hospital in lieu of a MIPS score if the VBP score is more favorable than the clinician's combined Quality and Cost category scores under MIPS. The intent of this policy is to eventually reduce reporting burden for these types of clinicians. CMS has multiple resources on facility-based scoring available for download through the QPP Resource Library.

Clinicians can check their MIPS-eligibility, including their eligibility for any special status categories and/or facility-based scoring, using the QPP Participation Status Tool. The tool is searchable by NPI and will show eligibility for each unique group practice that the NPI is affiliated with. 

Scoring and Payment Adjustments 

Performance in each MIPS category is totaled, weighted and then aggregated to determine a clinician's or group practice's MIPS final composite score.

MIPS performance category weights are set in statute for each performance year. However, CMS has the authority to redistribute the weight of these categories for clinicians. For example, those who meet CMS' definition of hospital-based or ASC-based qualify for automatic re-reweighting of the Promoting Interoperability category to 0%. In this situation, the weight of the Promoting Interoperability category would be redistributed to the Quality category.

2023 MIPS performance category weights are as follows: 

Performance Category	Category Weights Hospital-Based Clinicians	Category Weights Non Hospital-Based Clinicians
Quality	55%	30%
Cost	30%	30%
Promoting Interoperability	0%	25%
Improvement Activities	15%	15%

Note that there are other situations which might result in a redistribution of MIPS category weightings. For example, if a hospital-based clinician is also not attributed a minimum number of patients under any cost measure, the weight of both the Promoting Interoperability and Cost category will be redistributed to the Quality category, which will increase to 85% of the clinicians MIPS final score.   

Following the performance year, MIPS participants receive a MIPS final composite score, which ranges from 0 to 100 points. This score is compared to a national performance threshold to determine a clinician's or group's Medicare payment adjustment two years following the performance year (e.g., 2023 performance will impact 2025 Medicare payments). The performance threshold is set by CMS each year and represents the minimum number of points needed to avoid a penalty. Payment adjustments are determined on a linear sliding scale such that clinicians or groups with scores at the MIPS performance threshold will receive a neutral adjustment, while those with a score of 100 will receive the highest positive payment adjustment assigned for that year. Those who do not meet the performance threshold will be subject to a negative payment adjustment. 

For the 2023 performance year/2025 payment year, the performance threshold remains at 75 points. Thus, in 2023, clinicians and groups need to score at least 75 total points under MIPS to avoid a Medicare penalty in 2025. The maximum negative adjustment for the 2023 performance year/2025 payment year is -9.0%. Since MIPS is a budget neutral program, CMS cannot determine the range of positive payment adjustments for any given year until after the performance year closes. CMS typically releases final payment adjustment amounts in the summer prior to each payment year. To learn how to access your 2023 MIPS payment adjustment amount (based on 2021 performance), please see this CMS user guide.

*Note that starting with the 2023 performance year/2025 payment year, CMS is no longer authorized to award a bonus payment to clinicians with “exceptional” performance in MIPS. This MACRA-authorized temporary funding stream made up a substantial portion of MIPS positive payment adjustments to date.  

Note that historically, MIPS positive adjustment amounts have been relatively low. For example, the maximum positive adjustment in 2023, based on 2021 performance, is only about 2% (which includes the additional adjustment for exceptional performance). CMS predicts that clinicians will have the opportunity to earn higher maximum positive payment adjustments in the future as the agency continues to increase the MIPS performance threshold, making it more difficult for certain clinicians to avoid a penalty. At the same time, MIPS positive payment adjustments over the next couple of years may be lower than usual due to a large number of clinicians applying for an exemption from MIPS penalties due to the impact of COVID-19. More information about applying for this exception can be found here. 

MIPS payment adjustments are applied on a claim-by-claim basis to Medicare Part B covered professional services furnished by a MIPS eligible clinician two years following the performance year. If a group practice (identified by its Tax Identification Number or TIN) does not participate in MIPS as a group, each individual clinician in the TIN will receive his/her own performance score and MIPS payment adjustment. If a TIN participates in MIPS as a group, and none of the clinicians in the TIN earn a higher individual score, each clinician will receive the same score and payment adjustment based on the group's performance. CMS typically releases performance feedback, final scores and payment adjustment amounts in the summer prior to the payment year. For more information on accessing your 2021 performance feedback report, please see this CMS guide.  

MIPS Reporting Frameworks

In 2023, clinicians can participate in MIPS through three different frameworks, which are discussed in more detail here. The MIPS Value Pathways (MVPs) is the newest framework, meant to reduce clinician burden and to offer a more focused participation pathway. MVPs will be an optional pathway for clinicians starting in 2023. However, at this time, there are no MVPs that are directly relevant to cardiac and thoracic surgeons.  

Data Submission Mechanisms 

Regardless of the MIPS reporting framework selected, clinicians and groups may collect and report data for MIPS via multiple mechanisms, which are listed here. Although is it common for clinicians and groups to rely on a single mechanism, they are permitted to use multiple mechanisms across performance categories (e.g., report quality measures via a QCDR and improvement activities via a qualified registry or QR) and within performance categories (e.g., report quality measure A through a QCDR and quality measure B through a QR). 

Members who are not eligible for claims-based reporting because of the size of the practice will have to rely on other registries or their EHR to report their data to CMS. A list of Qualified Registries QRs and QCDRs approved for 2023 can be found in CMS' QPP Resource Library. Clinicians also can find out if their EHR is federally certified and whether it has the capacity to submit MIPS data to CMS by searching the Certified Health IT Product List.  

MIPS data generally can only be submitted to CMS during the MIPS data submission period, which typically occurs from January 2 of the performance year through March 31 of the year following the performance year (except for quality measures reported via Medicare claims, which are submitted to CMS throughout the performance period). 

Available Measures and Improvement Activities

The MIPS measures and improvement activities available to clinicians each year can be found here.  Note that clinicians may search by “specialty set” when looking for relevant quality measures.  Specialty sets are more focused sets of measures that CMS has identified as most relevant to a specific specialty. They are intended to help clinicians navigate the large inventory of MIPS quality measures, but are simply recommendations and not required. 

MIPS Exceptions 

Note that if you are eligible for MIPS in 2023, but feel there are circumstances out of your control that make it difficult for you to meet program requirements, you may apply for an exception from meeting certain or all MIPS program requirements. In certain circumstances, these exceptions may be applied automatically. More information about these exceptions can be found here.

Additional Information

More detailed information about how to participate in MIPS is available through the QPP Resource Library and the QPP Webinar Library.