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Merit-Based Incentive Payment System (MIPS)

This payment track builds on traditional fee-for-service payments by adjusting them up or down based on a physician’s performance in a new reporting system.

How MIPS works

This new reporting system will combine several existing Medicare reporting programs; the Physician Quality Reporting System (PQRS), the Medicare EHR Incentive Program (also known as Meaningful Use), and the Value-Based Payment Modifier Program—and also adds in a new component, Improvement Activities.

In Year 1 (2019 payments based on 2017 performance) physicians participating in MIPS will receive a composite score based on four weighted categories:

  • Quality = 60% (This percent will gradually decrease to 30% in future years.)
  • Resource Use (or cost) = 0% (This percent will gradually increase to 30%.)
  • Clinical Practice Improvement Activities= 15%
  • Advancing Clinical Information (formerly known as meaningful use)= 25%

These categories will be combined into one number called the MIPS Composite Performance Score.

MIPS scoring

How are payments determined?

MIPS payments will be the Medicare base rate in addition to a physician’s composite performance score adjusting his or her payments up or down.

  • In 2019, the first year of the program, payments can go up or down by 4%.
  • In 2020, physician payments can go up or down by 5%.
  • In 2021, physician payments can go up or down by 7%.
  • In 2022 and beyond, physician payments can go up or down by 9%.
MIPS payments

Payments can never be reduced by more than the level set in the law. However, in order to make the adjustments budget neutral, the upward adjustments may have a scaling factor applied to make the total upward and downward adjustments equal to each other.

Additionally, physicians who are determined to be an exceptional performer will be eligible to receive an additional positive payment adjustment of up to 10%. This exceptional performance payment adjustment is not budget neutral but will come from a separate designated fund.