MIPS: A Guide to the Merit-Based Incentive Payment System

Beth Hickerson, Healthcare Transformation Consultant Healthcare Consulting

Group of doctors discussing MIPS at their office

Improving quality performance for healthcare plans and providers is not always easy. The complexities of a value-based care market can be difficult to navigate, and providers who don’t understand all that it entails can leave money on the table when seeking value-based reimbursement. 

If you are a healthcare provider considering value-based reimbursement under MIPS, you need to fully understand the program and how to use it successfully.

What Does MIPS Stand For in Healthcare?

In the healthcare field, MIPS stands for Merit-based Incentive Payment System.

What is the Purpose of MIPS and How Does it Work?

According to the Department of Health and Human Services (HHS), the Centers for Medicare and Medicaid Services (CMS) “is required by law to implement a quality payment incentive program,” which is currently known as the Quality Payment Program. MIPS, along with Advanced Alternative Payment Models (APMs), are the two systems that the CMS uses to measure and reward clinician performance in this program.

With MIPS, clinicians must report their performance in four areas: quality, promoting interoperability, improvement activities, and cost. These categories make up the clinicians’ final score, which the HHS uses to assess MIPS-eligible clinicians and determine their payment adjustment to Medicare reimbursements every year. 

According to the HHS, “MIPS was designed to tie payments to quality and cost-efficient care, drive improvement in care processes and health outcomes, increase the use of healthcare information, and reduce the cost of care.”

MIPS Quality Measures

For the quality category, clinicians are scored based on six MIPS quality measures, which they can select based on what makes the most sense for their practice. CMS releases the final regulations for the Quality Payment Program at the end of every year, which includes the full list of MIPS quality measures.

It is critical that clinicians be aware of any changes to these regulations to ensure they are using MIPS quality measures that are still regulated by CMS and appropriate for their practice. Failing to do so can have a negative impact on reimbursement. 

When evaluating MIPS quality measures, consider:

  • What are the new measures? New MIPS quality measures are available for reporting for the first time in that year and do not have historical data for CMS to use for benchmarking. At Medical Advantage, our consultants recommend that practices not use a new measure as one of their top six required measures, since scoring for these new measures will be unpredictable. 
  • What are the deleted measures? Practices who report a quality measure no longer part of the MIPS reporting program will need to choose a replacement measure.
  • What are the topped out measures? Measures with high overall performance rates are capped at seven points, which can impact a clinician’s scoring potential. 
  • What are the new improvement activities? Clinicians should be aware of improvement activities and how they are weighted, as this can affect their overall scoring potential.

Learn more about MIPS quality measures here.

Relationship Between MACRA and MIPS

According to CMS, The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is the legislation that created the Quality Payment Program. It streamlined “multiple quality programs” under the new MIPS, and is responsible for changing the way that “Medicare rewards clinicians for value over volume.”

MACRA is significant for any provider of Medicare services because it requires participation in The Quality Payment Program. These providers must measure the quality of their healthcare delivery through one of two tracks: the Merit-based Incentive Payment System (MIPS) or an Advanced Alternative Payment Model (APM). Some companies offer MACRA consulting and support services to help Medicare providers successfully navigate MACRA, maximize incentives, and avoid penalties.

Overwhelmed by MACRA and not sure where to start? Find 10 MACRA resources here.

Using MIPS Successfully

Clinicians and practice managers who use MIPS successfully:

  • Protect their financial future by increasing incentives and avoiding penalties
  • Gain staff buy-in by aligning MIPS goals to what motivates their staff
  • Empower a quality champion to provide insight and take the reins on achieving MIPS goals
  • Find and use MIPS resources to their advantage 
  • Optimize their EHR system to support quality measurement 

Want to learn more? Find 5 tips for primary care practice managers using MIPS here.

MIPS Consulting Services

If you’re having trouble successfully navigating the MIPS program, you can enlist the help of MIPS consultants who understand MACRA and industry best practices. They can help guide you through the process to maximize your incentive opportunities and avoid penalties, leading to a more efficient and profitable practice.


Interested in learning more? Contact our MACRA consultants today.