Industry News

Understanding Medicare’s Merit-based Incentive Payment System (MIPS)

July 5, 2017 | Source: American Medical Association

Medicare’s current quality reporting programs are being consolidated and streamlined into 1 merit-based incentive payment system, referred to as “MIPS.” This consolidation will reduce the aggregate level of financial penalties physicians otherwise could have faced, and it also provides a greater potential for bonus payments.

Modification of the Fee-for-Service System

Establishment of the MIPS program provides an opportunity to revise, rework and improve the existing Medicare programs focused on quality, costs and use of electronic health records to improve their relevance to real-world medical practice and reduce administrative burdens for physicians.

Under this payment system, physicians will no longer face the threat of double-digit cuts each year, as they did under the now-repealed sustainable growth rate. There will be greater certainty in annual payment updates.

MIPS components include:

  • Quality—replaces Physician Quality Reporting System (PQRS) program
  • Cost—replaces value-based modifier (VBM) program
  • Advancing Care Information (ACI)—replaces Meaningful Use (MU) program Improvement activities (new component)
  • Improvement activities (new component)

Determine MIPS Eligibility

The Centers for Medicare and Medicaid Services (CMS) offers a tool on their website for clinicians to determine if they should participate in the MIPS track of the Quality Payment Program (QPP) in 2017. The tool shows participation status and resources after a national provider identifier (NPI) is entered.

Clinicians new to Medicare in 2017 do not participate in MIPS although they may participate voluntarily without being subject to payment adjustments. Other exemptions exist for those participating in an Advanced Alternative Payment Model (APM) or for those qualifying for one of the special rules for certain types of clinicians. See the CMS MIPS Participation Fact Sheet below.


Clinicians will participate in MIPS in 2017 if they bill Medicare Part B more than $30,000 a year AND see more than 100 Medicare patients a year. In addition, they must also be one of the following:

  • Physician
  • Physician assistant
  • Nurse practitioner
  • Clinical nurse specialist
  • Certified nurse practitioner

What’s Next? Use the AMA’s MIPS Action Plan

The MIPS Action Plan lays out the 10 key steps needed to successfully implement MIPS for 2017. It is intended for physicians who plan to participate in MIPS and not as part of an advanced APM. For more detailed information regarding each step of the Action Plan, refer to the MIPS Action Plan Supplementary FAQ below.