The Merit-Based Incentive Payment System (MIPS) is how Medicare adjusts what it pays your doctor based on their performance

MIPS is a Medicare payment model that raises or lowers what the government pays your doctor depending on how well they meet certain performance measures. If your doctor scores high on things like patient safety, care coordination, and cost management, Medicare pays them more. If they score low, Medicare pays them less. You don't pay MIPS directly — it's a payment adjustment between Medicare and your provider — but it can affect what your doctor charges you, whether they stay in Medicare, and how much time they spend on paperwork instead of patient care.

MIPS launched in 2017 as part of the Medicare Access and CHIP Reauthorization Act (MACRA). It replaced a previous system called the Sustainable Growth Rate (SGR) formula, which had threatened steep cuts to Medicare payments every year. MIPS was designed to reward doctors who deliver better outcomes and manage costs more efficiently, rather than simply cutting everyone's pay across the board.

Key Takeaways

  • MIPS adjusts Medicare payments to your doctor up or down based on performance scores in four categories: quality, improvement activities, promoting interoperability, and cost.
  • Your doctor must report MIPS data to Medicare, usually through their electronic health record system or a third-party vendor, or face a payment penalty.
  • Doctors with very low revenue from Medicare, or those in certain alternative payment models like accountable care organizations, are exempt from MIPS reporting.
  • Payment adjustments range from a penalty of up to 9 percent to a bonus of up to 27 percent, depending on your doctor's performance score and how many other doctors are reporting.
  • MIPS affects your care indirectly: doctors may invest more in data systems to track performance, or they may leave Medicare entirely if the reporting burden becomes too high.

The four performance categories MIPS uses to score your doctor

Medicare measures your doctor's performance across four domains. The first is quality — things like whether they screen patients for depression, manage blood pressure, or follow evidence-based treatment guidelines. Your doctor picks which quality measures to report, usually between 6 and 25 measures depending on their specialty.

The second domain is improvement activities. This covers things like participating in care coordination programs, using patient feedback to improve their practice, or implementing care protocols for chronic disease management. Your doctor must report at least two improvement activities.

The third is promoting interoperability (formerly called "meaningful use"). This measures whether your doctor's electronic health record system can exchange patient information with other providers, whether they use secure messaging with patients, and whether they report data to public health agencies or clinical registries.

The fourth is cost. Medicare looks at the total cost of care for patients under your doctor's care, adjusted for the patient's age and health status. This is the hardest measure for individual doctors to control, because it includes hospital stays, specialist visits, and imaging — not just what the doctor themselves ordered.

How MIPS payment adjustments work

Your doctor's performance score in each category is converted to a single MIPS score on a scale of 0 to 100. Medicare then compares your doctor's score to a threshold — usually the median score of all doctors reporting that year. Doctors above the threshold get a payment bonus; doctors below it get a payment penalty.

The size of the adjustment depends on your doctor's score and how many other doctors are reporting. In recent years, the maximum bonus has been around 27 percent and the maximum penalty around 9 percent, though these numbers change annually. A doctor scoring at the median typically sees no adjustment. A doctor scoring in the top 25 percent might see a 15 to 20 percent bonus; a doctor in the bottom 25 percent might see a 5 to 9 percent penalty.

These adjustments apply to all Medicare payments to that doctor for the entire year. So if your doctor gets a 10 percent bonus, Medicare pays them 10 percent more for every visit, test, and procedure they bill that year. If they get a 5 percent penalty, Medicare pays them 5 percent less.

Who has to report MIPS data and who is exempt

Not every doctor reports MIPS. Your doctor is exempt if they earned less than $90,000 from Medicare in the previous year, or if they saw fewer than 200 Medicare patients. Small practices and rural doctors often fall below these thresholds.

Your doctor is also exempt if they participate in an alternative payment model (APM) instead of MIPS. APMs include accountable care organizations (ACOs), patient-centered medical homes, and bundled payment arrangements. In these models, the doctor or their organization takes on financial risk for patient outcomes, so Medicare measures performance differently.

Doctors who do report MIPS usually do so through their electronic health record vendor, a billing service, or a specialty registry. Some larger practices hire staff just to manage MIPS reporting. The reporting deadline is typically March 31 of the year following the performance year.

How MIPS affects your out-of-pocket costs and access to care

MIPS adjustments don't directly change what you pay at the doctor's office. Your copay, coinsurance, and deductible are set by your Medicare plan, not by MIPS. However, MIPS can affect you indirectly in several ways.

If your doctor receives a large penalty year after year, they may decide to stop accepting Medicare patients altogether. This reduces your choice of providers, especially in rural areas where few doctors participate in Medicare. Some doctors have left Medicare specifically because they view MIPS reporting as too burdensome relative to the payment adjustment.

MIPS can also affect how your doctor spends their time. Doctors who report MIPS often invest in electronic health record upgrades, hire data analysts, or spend more time documenting care to hit performance targets. This can mean less time in the exam room or longer wait times for appointments. Conversely, doctors who use MIPS data to improve their practice — for example, by implementing better blood pressure management protocols — may deliver better outcomes.

The difference between MIPS and other Medicare payment models

MIPS is one of three pathways under MACRA. The other two are Advanced APMs and the traditional fee-for-service model with no performance adjustment.

Doctors in Advanced APMs take on financial risk for patient outcomes. They might be part of an ACO that shares savings with Medicare if they keep costs down, or they might receive a bundled payment for an entire episode of care. In return, they are exempt from MIPS reporting. Advanced APMs are more common among large health systems and specialists in high-cost areas.

Doctors in traditional fee-for-service who don't meet the MIPS reporting threshold (low Medicare revenue or patient volume) receive no adjustment. Their Medicare payments stay flat year to year, but they also don't have to report performance data.

MIPS sits in the middle: it applies to most independent practices and mid-sized groups that have enough Medicare revenue to trigger reporting, but not enough to move into an Advanced APM.

What happens if your doctor doesn't report MIPS

If your doctor is required to report MIPS but doesn't, Medicare applies an automatic penalty of 5 percent to their payments. This penalty is separate from any performance-based adjustment and applies regardless of how well they actually performed.

Some doctors choose to accept this 5 percent penalty rather than invest in the systems and staff needed to report MIPS. Others report late or incompletely and receive a smaller penalty. A few doctors challenge their MIPS score through Medicare's appeals process if they believe the data is wrong.

If your doctor stops accepting Medicare because of MIPS penalties or reporting burden, you will need to find a new provider or switch to a Medicare plan that includes out-of-network coverage.

Frequently Asked Questions

Does MIPS apply to my Medicare Advantage plan?

MIPS is a Medicare fee-for-service program, so it does not directly affect Medicare Advantage plans. However, some Medicare Advantage insurers use similar performance measures to adjust what they pay doctors in their network. Ask your plan whether they use performance-based payment adjustments.

Can I see my doctor's MIPS score?

Medicare publishes MIPS scores and payment adjustments in the Physician Compare database on Medicare.gov, though the data is usually one to two years behind. You can search by doctor name or location to see their performance score and whether they received a bonus or penalty.

What if my doctor's MIPS penalty causes them to leave Medicare?

If your doctor stops accepting Medicare, you can continue seeing them as a Medicare patient only if you pay out of pocket and submit your own claims, or if they are part of a Medicare opt-out program. Most doctors who leave Medicare give patients 30 days' notice. Contact your doctor's office to ask about their Medicare status.

Does MIPS measure the quality of care I receive?

MIPS measures some aspects of quality — like whether your doctor screens for certain conditions or follows treatment guidelines — but it does not measure patient satisfaction, outcomes after treatment, or how well your doctor communicates. A high MIPS score suggests your doctor follows evidence-based practices, but it is not a complete picture of care quality.