Merit-based Incentive Payment System (MIPS) - New Jersey Anesthesia Professionals
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Merit-based Incentive Payment System (MIPS)

The Merit-based Incentive Payment System (MIPS) is one of two tracks under the Quality Payment Program (QPP), which moves Medicare Part B providers to a performance-based payment system (1). 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 (2). MIPS streamlines three historical Medicare programs — the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VM) Program and the Medicare Electronic Health Record (EHR) Incentive Program  — into a single payment program (1). MIPS also adds a fourth component, Improvement Activities (IA), to promote ongoing improvement and innovation. This new program is meant to ease clinician burden and allow clinicians to choose the activities and measures that are most meaningful to their practice to demonstrate performance (3).

The Medicare Access and CHIP Reauthorization Act (MACRA) replaced the Sustainable Growth Rate formula (SGR) with MIPS (4). According to the New England Journal of Medicine, the new policies under MACRA provide greater incentives for physicians to participate in alternative payment models. Alternative payment models, such as bundled payments, bring more strict benchmarks for providers to follow in improving the quality of care across their facilities (4). Another advantage of MIPS is that it promotes health care reform. Under MIPS, the Centers for Medicare and Medicaid Services (CMS) proposes that clinicians will receive a Composite Performance Score (CPS) based on the categories of quality, resource use/cost, advancing care information, and the aforementioned new category (IA).  Each performance year, CMS proposes to issue a MIPS performance threshold score to clinicians. For most clinicians, the four categories of the CPS will be weighted at 50 percent quality, 25 percent advancing care information, 15 percent IA participation, and 10 percent cost in the first year (5). Those clinicians who score below the threshold will receive a negative payment adjustment of up to 4 percent in 2019. Those in the lowest 25th percentile will see the maximum negative adjustment, while those closer to the benchmark may see smaller adjustments. Clinicians who score at or above the threshold will receive either a neutral payment adjustment, or a bonus in 2019 (5). The IA category, for example, will reward providers working toward implementing healthcare reform strategies. This may include the use of telehealth technology or taking part in a patient-centered home as well as clinical data registry (4).

However, there are challenges to the implementation of MIPS. There are flaws in aligning stakeholders under MIPS, for instance (4). Quality measures under MIPS need to be simplified, while quality data needs to be more user-friendly, in order to truly benefit beneficiaries. The lack of alignment between Medicare, Medicaid programs, and commercial payers (with regard to quality measures) has led to significant burden among providers when it comes to improving performance. More discussion is needed among payers, providers, healthcare associations, and quality-measurement professionals in order to reduce this lack of alignment (4). Another challenge is the lack of consumer engagement measures. When it comes to chronic disease management, patient engagement is vital to ensure that the right medications are taken at the right time, patients stick to their appointments, and a healthy lifestyle is incorporated throughout the consumer base. It is beneficial for future quality measurement programs under MIPS to incorporate patient engagement benchmarks, in order to truly improve health outcomes (4).

According to a 2018 survey conducted by the Medical Group Management Association (MGMA), 80% of group practice leaders cited the QPP as their top regulatory burden, and another 67 % said they were specifically dissatisfied with MIPS reporting requirements and methods (6). Currently, the CMS is planning to overhaul reporting for the MIPS, through the implementation of the MIPS Value Pathways (MVP). The MVP is a conceptual participation framework that will streamline MIPS reporting by requiring eligible clinicians to report on a smaller set of measures that are specialty-specific, outcome-based, and more closely aligned with alternative payment models starting in the 2021 performance year (6).


  1. What is MIPS? Merit-Based Incentive Payment System. (2016, June 17). Retrieved from
  2. Merit-based Incentive Payment System (MIPS) Overview. (n.d.). Retrieved from
  3. Merit-Based Incentive Payment System (MIPS). (n.d.). Retrieved from
  4. Gruessner, V. (2015, November 30). Challenges, Advantages of Merit-Based Incentive Payment System. Retrieved from
  5. Merit-Based Incentive Payment System Proposed Rule Issue Brief. (n.d.). Retrieved from
  6. LaPointe, J. (2019, August 07). Unpacking Proposed Merit-Based Incentive Payment System Changes. Retrieved from