What Is the Merit-Based Incentive Payment System (MIPS)?

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is federal legislation that required the Centers for Medicare & Medicaid Services (CMS) to create the Merit-Based Incentive Payment System (MIPS) track of the Quality Payment Program (QPP). The QPP is designed to reward eligible clinicians for the value of care they provide rather than the volume of care they provide. Payment adjustments are based on performance points scored according to national benchmarks. Each performance year, an eligible clinician’s MIPS final score determines their future Medicare Part B payment adjustments and creates a means for CMS to rate providers against national peers.

As mandated by the Bipartisan Budget Act, CMS gradually increased the MIPS performance threshold toward the goal of establishing the national historical median by performance year 2022 (PY 2022)/2024 payment year.

MIPS eligible clinicians participating in the program are scored on resource use, quality, clinical practice improvement, and electronic health record (EHR) utilization. As mounting MIPS performance requirements raise measurement-based financial and reputational stakes, clinicians must maintain or exceed the pace of their peers.

How important is 2024 MIPS performance? Consider a few bottom-line facts as healthcare organizations head into year eight of MACRA.

FACT 1: MIPS Is Competition

MIPS measures are assigned points, which are scored according to national benchmarks. This means you’re in competition with every practitioner in the country. MIPS demands an organization-wide commitment to continuous performance improvement for positive payment adjustments.

FACT 2: MIPS Is Marketing

Beginning in 2018, MACRA required CMS to publish MIPS composite scores and other MIPS data through its Physician Compare initiative. In 2020, CMS brought all eight of the compare sites, including Physician Compare, under one tool called Medicare Care Compare.

MIPS publishes each practitioner’s final score within 12 months following the performance year, allowing consumers to see their practitioners rated on a 100-point scale and learn how they compare to other healthcare providers.

Transparent MIPS scores impact revenue connected to patient attraction and retention, but the ramifications come with greater liability. CMS ties the MIPS score to the practitioner, so if the practitioner changes practices, they bring along the score, which then influences physician recruiting, contracting, and compensation plans.

The effects of one low-performing year, in other words, extend several years beyond the corresponding payment year.

If you had a low-performing year, your quickest route to recovery is to invest every effort in following up with a record-high performance.

FACT 3: MIPS Incentives Are Funded by Penalties

MIPS must remain budget neutral. This means that high performers can tip the scales in their favor, leaving low performers to fund their positive payment adjustments.

Amid escalating competition for incentives, MIPS eligible clinicians who ensure their medical coders, billers, and practice managers receive effective annual MACRA education will have the advantage and can bank on substantial investment gains.

Traditional MIPS Performance Categories

Traditional MIPS tracks data in four performance categories:

• Quality

• Cost

• Improvement Activities (IA)

• Promoting Interoperability (PI)

Quality Performance Category

The quality component of MIPS is the highest weighted performance category, worth at least 30percent of a clinician or group’s MIPS final score in PY 2024. The timeframe for the collection and submission of MIPS data runs for 12 months (Jan. 1 to Dec. 31, 2024).

MIPS quality measures have five collection types:

• Electronic clinical quality measures (eCQMs);

• MIPS clinical quality measures (CQMs);

• Qualified Clinical Data Registry (QCDR) measures;

• Medicare Part B claims measures; and

• Consumer Assessment of Healthcare Providers and Systems (CAHPS) for MIPS survey measure.

CMS set the data completeness threshold at 75 percent for PY 2024, up from 70 percent in PY 2023 (for Part B claims, QCDR measures, MIPS CQMs, and eCQMs) of all eligible encounters. This data completeness threshold percentage will stay in place through the 2026 performance period.

Note: Administrative claims measures, CMS Web Interface measures, and CAHPS for MIPS measures have different data completeness requirements. If a measure’s criteria are not met, the clinician could earn as little as 1 point (3 points for small practices) for a measure.

As of 2019, CMS reduced the quality denominator by 10, and the measure will receive zero points for groups that submit five or fewer quality measures and do not meet the CAHPS for MIPS sampling requirements.

Follow these steps to determine the number of encounters you must submit to meet a measure’s data completeness criteria:

1. Choose measures applicable to the practice.

2. Determine the eligible populations, per measure specifications, such as demographics and codes.

3. Verify reporting frequency, per measure specifications, and multiply it by the determined population (this is your eligible instances).

4. Divide eligible instances by 60 percent to learn the minimum number of submissions to meet data completeness.

Quality Performance Reporting Requirements

To achieve the highest score in this category (60 points), clinicians will need to report on at least six quality measures, including at least one outcome measure or high-priority measure. Clinicians can choose from 198 quality measures for PY 2024 and must collect a full calendar year of data.

Specialty Set Measures

While providers aren’t restricted to measures listed in the specialty sets that apply to them, they may find these sets helpful when selecting measures. Ultimately, providers should choose measures based on how their performance compares with corresponding benchmarks and their ability to meet case minimums. Always refer to measure specifications to verify applicable measures — even for those measures within the provider’s specialty set, as not all will be applicable. Providers are required to submit data on at least six quality measures; however, if the specialty set includes less than six applicable measures, only the applicable measures should be reported. For the selected measures, the case minimum needs to be met.

CAHPS for MIPS Survey Measure

If a provider is participating in Traditional MIPS for PY 2024, register for the CAHPS for MIPS survey measure, and meet the sampling requirements to count this as one of the quality measures. The registration process starts April 1, 2024. An additional requirement was added for the 2024 performance period: Those who are registered as a group, virtual group, or an APM entity and registered as a CAHPS for MIPS survey vendor must provide a Spanish translation option of the survey.

Improvement Activities (IA) Performance Category

The IA performance category focuses on care coordination, beneficiary engagement, and patient safety. The IA category is worth 15 percent of the MIPS final score. To get full credit in this category, a clinician or group must complete activities equal to a maximum of 40 points. The 40-point total can be reached with the following submission combinations:

• Two high-weighted activities, usually worth 20 points each;

• One high-weighted activity and two medium-weighted activities (10 points each); or

• Four medium-weighted activities.

For PY 2024, CMS added five new IAs, including Improving Practice Capacity for Human Immunodeficiency Virus (HIV) Prevention Services Guidelines, and removed three IAs. Clinicians can calculate their performance in this category with AAPC’s MIPS calculator.

Clinicians earn points with high-weighted activities worth 20 points each and medium-weighted activities worth 10 points each. Certain clinicians earn double-points for each improvement activity:

• Small practices

• Providers in practices located in a rural area (in a ZIP code designated as rural in the most recent Health Resources & Services Administration (HRSA) Area Health Resources File data set)

• Providers in practices located in a geographic health professional shortage area

• Non-patient facing providers or groups

Patient-facing encounter codes determine non-patient-facing status. A non-patient-facing, MIPS-eligible clinician is:

• An individual who bills 100 or fewer patient-facing encounters (including telehealth)

• A group with 75 percent of the clinicians billing under the group’s Taxpayer Identification Number (TIN), meeting the definition of a non-patient-facing individual

The list of patient-facing encounter codes includes evaluation and management (E/M) codes and surgical and procedural codes. To earn full credit for an activity, clinicians must perform the activity for 90 continuous days during the performance period. A group or virtual group may attest to an improvement activity when at least at least 50 percent of its MIPS eligible clinicians participate in or perform the activity. At least 50 percent of the group’s national provider identifiers (NPIs) must perform the same activity for the same continuous 90 days in the performance period. Because this performance category will be reported through attestation, clinicians should maintain documentation to justify their Yes/No statement in case of an audit.

Promoting Interoperability (PI) Performance Category

PI replaced Meaningful Use to continue the effort for secure exchange of health information and the use of certified EHR technology (CEHRT). For most providers, this category is worth 25 percent of the MIPS final score. In some cases, a provider may qualify for an exception from this performance category; those cases include eligible clinicians with special status, an approved hardship exception application, and APM entities. In these circumstances, the PI performance category is reassigned a weight of zero percent, and CMS will then redistribute the 25 percent to another performance category. For the 2024 performance period, CMS added the following PI requirements:

• Report measures using an EHR that aligns with recently adopted Office of the National Coordinator for Health Information Technology (ONC) standards and regulations outlined in 45 CFR 170.315, which moves away from the previous 2015 CEHRT Edition requirement;

• Report data for a minimum of 180 continuous days; and

• Include the EHR’s CMS identification code from the Certified Health IT Product List with the submission.

Clinicians are required to report five to six measures from each of the four objectives in addition to required attestations, unless an exclusion is claimed. MIPS providers are now also required to submit a “yes” to these attestations as of PY 2024:

• Actions to Limit or Restrict Compatibility or Interoperability of CEHRT (previously called Prevention of Information Blocking)

• Safety Assurance Factors for EHR Resilience (SAFER) Guides measure

• ONC Direct Review

• Security Risk Analysis measure

MIPS eligible clinicians who may qualify for an automatic exception from this category include:

• Hospital-based clinicians (those with 75 percent or more of their Medicare encounters occurring in place of service 21 (hospital), 22 (on-campus outpatient hospital), or 23 emergency room)

• Non-patient facing clinicians (those who don’t typically see patients face-to-face (e.g., radiology, anesthesiology) who bill fewer than 100 patient-facing CPT^® codes to Medicare in a 12-month period). CMS has provided a list of the patient-facing CPT^® codes. If reporting as a group, at least 75 percent of the eligible clinicians in the group must meet the non-patient facing criteria.

• Ambulatory surgical center-based clinicians

• Small practices

• One clinician type: clinical social workers

MIPS eligible clinicians who will no longer be automatically reweighted starting in 2024:

• Physical therapists

• Occupational therapists

• Qualified speech-language pathologists

• Qualified audiologists

• Clinical psychologists

• Registered dieticians or nutrition professionals

MIPS Scoring: PI

There are two types of measures: those that require a numerator and denominator, and those that are scored with either a “yes” or “no.” For numerator/denominator measures, CMS multiplies the total point outcome for the measure submission by the performance rate. Here are other PI measure scoring things to know for PY 2024:

• If exclusions are claimed, the points for measures will be reallocated to other measures.

• If all required measures aren’t reported with a “yes” submission or claimed as an exclusion, the category gets a zero.

• If a “yes” for the Public Health and Clinical Data Exchange objective is submitted, then credit is given for either two required measures (Immunization Registry Reporting and Electronic Case Reporting) or a “yes” submission and exclusion.

If you submit additional measures under the Public Health and Clinical Data Exchange objective, you can earn five bonus points.

Cost Performance Category

The goal of the Cost performance category is to track national healthcare spending and to use the resulting data, adjusted for risk and other factors, to create benchmarks (see the accompanying sidebar, “What Are Benchmarks?”) for value-based care. CMS uses these benchmarks as a gauge for performance. For the 2024 performance period, Cost will be calculated at 30 percent of the MIPS final score, as required by MACRA. Although CMS assesses performance in this category using administrative claims data (instead of data submission or attestation), medical coders, auditors, and practice managers who understand the measures CMS uses to evaluate their clinicians’ claims data can ensure their clinicians meet requirements and score high in this category.

Factor Cost Into the MIPS Final Score

With cost now a significant factor in the MIPS final score — the determining factor for MIPS payment adjustments — time is of the essence for clinicians to assess their performance. The motivation to do so in PY 2022 is a Medicare Part B payment adjustment somewhere between plus or minus 9 percent in payment year 2024.

Review Cost Measures for Clues

For the 2024 performance period, CMS will evaluate a clinician’s cost performance using episode-based measures or population-based measures. There are a total of 29 Cost measures for the 2024 performance period:

• Total Per Capita Cost for All Attributed Beneficiaries (TPCC) measure

• Medicare Spending Per Beneficiary (MSPB) measure

• 15 procedural episode-based measures

• Six acute inpatient medical condition episode-based measures

• Five chronic condition episode-based measures

• One emergency care-focused measure

In 2022, there are five new episode-based cost measures, one of which as a new measure attribution framework for identifying and confirming a clinician-patient relationship.

Understand Measured Criteria

Each measure’s criteria are different, so let’s look at them individually to ascertain what is being measured and how.

Total Per Capita Cost for All Attributed Beneficiaries (TPCC)

The TPCC measure assesses total Medicare Parts A and B expenditures for a patient attributed to an individual clinician or clinician group during a performance period (Jan. 1 – Dec. 31) by calculating the risk-adjusted, per capita costs. Patients are attributed to a clinician or clinician group based on the amount of primary care services (shown in Table A) they received by their primary care clinician (PCC) — or specialist, if they don’t see a PCC — during the performance period. Attributable patients must reside in the United States and be enrolled in both Medicare Parts A and B (unless newly enrolled) for the full year. The case minimum for this measure is 20 Medicare patients.

Table A: Applicable primary care services for the TPCC measure

Medicare Spending Per Beneficiary (MSPB)

The MSPB measure assesses total Medicare Parts A and B expenditures incurred by a single patient attributed to an individual clinician or clinician group during the episode window (up to three days prior to, during, and 30 days following a qualifying inpatient hospital stay) and compares these costs to expected costs.

Each patient MSPB episode is attributed to the MIPS eligible clinician who billed the largest amount of Medicare Part B-allowed charges during the episode window (barring exclusions). The minimum case volume for this measure is 35 patients.

Episode-Based Measures

The 27 episode-based measures only look at items and services related to applicable episodes of care, identified by procedure and diagnosis codes reported on Medicare B claims or Medicare Severity Diagnosis-Related Group (MS-DRG) codes on Medicare Part A claims for the 15 procedural episode-based measures and the one emergency care-focused measure. For the six acute inpatient medical condition episode-based measures and five chronic condition episode-based measures, CMS uses Medicare Parts A, B, and D claims.

Each episode-based measure (listed above) has a corresponding measure code list file. The Measure Codes List file is an Excel workbook that provides clinicians with the specific codes and logic that apply to the Cost measure, including episode triggers (applicable codes for the measure), exclusions, episode sub-groups, assigned items and services, and risk adjusters (e.g., Hierarchical Condition Category codes).

Acute Inpatient Medical Condition measures are a little different than Procedural measures in that the episodes are attributed to each MIPS eligible clinician who bills inpatient E/M claim lines during a trigger inpatient hospitalization — determined by the MS-DRG — under a TIN that renders at least 30 percent of the inpatient E/M claim lines in that hospitalization.

Episode-based measures have minimum case volumes that the MIPS eligible clinician or group must meet to be scored on a given measure:

• The minimum case volume for most procedural measures is 10 episodes. The exception is the Colon and Rectal Resection measure which has a case minimum of 20 episodes.

• The minimum case volume for acute inpatient medical condition measures is 20 episodes.

• The minimum case volume for chronic condition measures is 20 episodes.

• The minimum case volume for the one emergency medicine measure is 20 episodes.

MIPS eligible clinicians and their support staff should review each measure’s specifications and code list to determine which ones CMS uses to score them.

Create a Line of Defense

Plan now for a positive future. And remember: Your best defense is always documentation and coding that justifies the quality care your clinicians provide.

Take Control of Cost

Three critical steps help clinicians assess their performance in this MIPS category:

1. Determine if clinicians meet case minimums of attributable patients for the MSPB and TPCC measures.

2. Determine if clinicians may be assessed under any of the eight episode-based measures by auditing claims for:

   • Episode triggers and windows

   • Item and service assignment

   • Exclusions

   • Attribution methodology

   • Risk adjustment variables

3. Review benchmarks to determine achievement points and calculate a Cost performance category score (for comparison purposes).

What Are CMS Cost Benchmarks?

CMS establishes a single, national benchmark for each Cost measure, based on claims data from the performance period. As such, there’s an approximate six-month lag between the performance period ending and clinicians finding out how they measured up. For example, the MSPB and TPCC benchmarks used to determine a MIPS eligible clinician’s 2024 Cost performance category won’t be made public until the summer of 2025.

MIPS Scoring: Cost

To calculate the Cost performance category, CMS will assign one to 10 achievement points to each scored measure based on the clinician or clinician group’s performance on the measure compared to the performance period benchmark.

The Cost performance category score formula is:

[Earned Points] ÷ [Total Possible Points] = [Percentage]
[Percentage] x [Weight] = [Score]

MIPS Final Score

Performance in the four MIPS categories, plus bonus points, factor into a clinician’s annual MIPS score, which CMS caps at 100 points. The category breakdown for PY 2024 is:

• Quality 30 percent weight

• Cost 30 percent weight

• PI 25 percent weight

• IA 15 percent weight

• Small practice bonus 5 MIPS points

• Complex patient bonus 10 MIPS points maximum

For PY 2024, CMS modified the performance category weight redistribution policy for small practices:

• When PI is reweighted to zero percent, the Quality performance category will be weighted at 40 percent and both the Cost and IA performance categories will be weighted at 30 percent.

• When both the PI and Cost performance categories are reweighted, both the Quality and the IA performance categories will be weighted at 50 percent.

The APM Performance Pathway (APP) is a streamlined reporting framework that began in PY 2021 for MIPS eligible clinicians who participate in a MIPS APM.

MIPS Value Pathways

In addition to the option of reporting under Traditional MIPS for the 2024 performance period, providers can also submit measures via the MIPS Value Pathways (MVPs) program. MVPs began in PY 2023 and are subsets of measures and activities that can be used to meet MIPS reporting requirements. There are 16 MVPs that will be available for reporting in PY 2024.

New MVPs for PY 2024:

• Focusing on Women’s Health

• Quality Care for the Treatment of Ear, Nose, and Throat Disorders

• Prevention and Treatment of Infectious Disorders Including Hepatitis C and HIV

• Quality Care in Mental Health and Substance Use Disorders

• Rehabilitative Support for Musculoskeletal Care

Modified MVPs:

• Adopting Best Practices and Promoting Patient Safety within Emergency Medicine

• Advancing Cancer Care

• Advancing Care for Heart Disease

• Advancing Rheumatology Patient Care

• Coordinating Stroke Care to Promote Prevention and Cultivate Positive Outcomes

• Improving Care for Lower Extremity Joint Repair

• Optimal Care for Kidney Health

• Optimal Care for Patients with Episodic Neurological Conditions

• Patient Safety and Support of Positive Experiences with Anesthesia

• Value in Primary Care

• Supportive Care for Neurodegenerative Conditions

Clinicians will be able to report individual measures in Traditional MIPS until CMS fully implements MVPs.

Last reviewed on Feb. 7, 2024, by the AAPC Thought Leadership Team