Merit-based Incentive Payment System: Categories and Scoring

The Merit-based Incentive Payment System (MIPS) is one of the two tracks of Medicare Part B’s current pay-for-performance program [1]. It was introduced in 2015 by the Medicare Access and CHIP Reauthorization Act (MACRA) to replace the sustainable growth rate model [2]. Each year, the Merit-based Incentive Payment System evaluates clinicians and medical groups on four categories – quality, cost, promoting interoperability, and improvement activities – to determine their compensation for providing care to Medicare beneficiaries [2].

Each MIPS category abides by different submission guidelines. For the quality component, providers must submit data for at least six measures [3]. At least one submitted measure must be an outcome measure [3]. It can also be a high-priority measure if an outcome measure is not available [3]. Providers are also required to submit performance data from, at minimum, 70% of measure-qualifying patients to ensure data completeness [3]. Submission guidelines vary depending on how big a practice is [3]. For instance, groups whose practice contains 15 clinicians or fewer can submit their quality information using Medicare Part B Claims, but larger practices cannot do so [3].

By contrast, the other categories in the Merit-based Incentive require fewer disparate measures to submit. For cost, providers do not need to submit any data because cost is evaluated by Medicare using claims data [2]. As for promoting interoperability, clinicians and groups are responsible for reporting on a pre-established list of measures and objectives that will be scored on performance [2, 4]. If providers cannot submit this data due to special circumstances or lack of resources, they are eligible to apply for a hardship or extreme circumstances exception [2, 4]. Finally, the improvement activities category is measured by having providers submit proof of completing either two high-weighted activities, one high-weighted and two medium-weighted activities, or four medium-weighted activities [5]. These activities must be continued over at least 90 days unless otherwise stated [5].

Once a healthcare provider has submitted this data, each field will be scored and multiplied by a certain weight, depending on the category [2]. For 2021 compensation, the weights for each domain were as follows: 40% for quality, 20% for cost, 25% for promoting interoperability, and 15% for improvement activities [2]. It is important to note that Medicare determines compensation based on data from two years ago, so 2021 compensation depends on a provider’s weighted performance from 2019 [2].

After the Quality Payment Program calculates a provider’s final score, the organization uses a sliding scale to decide budget-neutral payment adjustments [2]. Each year, Medicare sets a performance threshold that providers must meet to receive at least a neutral payment adjustment [2]. Providers with final scores above the threshold receive a positive adjustment, while those with scores below the threshold will receive a negative adjustment [2]. Exceptional performers who surpass a higher threshold could receive an additional sliding scale adjustment [2]. In 2021, the performance threshold was 60 points, while the payment adjustment was ±7% [2].

According to a survey of 1,431 internists, physicians believe that MIPS is helping improve the value of Medicare services [1]. However, the system is not perfect: clinicians who see more patients at high social risk tend to receive less compensation [6]. Adjustments may be necessary to ensure that MIPS creates a fair and efficient healthcare compensation system.

References

[2] AAFP, “Merit-based Incentive Payment System (MIPS),” American Academy of Family Physicians, Updated February 2020. [Online]. Available: https://www.aafp.org/family-physician/practice-and-career/getting-paid/mips.html.

[3] Quality Payment Program (1), “Quality Measures: Traditional MIPS Requirements,” The Centers for Medicare & Medicaid Services, Updated 2021. [Online]. Available: https://qpp.cms.gov/mips/quality-requirements.

[4] Quality Payment Program (2), “Promoting Interoperability Measures: Traditional MIPS Requirements,” The Centers for Medicare & Medicaid Services, Updated 2021. [Online]. Available: https://qpp.cms.gov/mips/promoting-interoperability?py=2020.

[5] Quality Payment Program (3), “Improvement Activities: Traditional MIPS Requirements,” The Centers for Medicare & Medicaid Services, Updated 2021. [Online]. Available: https://qpp.cms.gov/mips/improvement-activities.

[1] L. M. Marcotte et al., “Physician Perspectives: How the Merit-Based Incentive Payment System Improves Value,” The American Journal of Accountable Care, vol. 9, no. 1, April 2021. [Online]. Available: https://www.ajmc.com/view/physician-perspectives-how-the-merit-based-incentive-payment-system-improves-value.

[6] J. LaPointe, “Clinicians Serving Socially At-Risk at a Disadvantage Under MIPS,” RevCycleIntelligence, Updated September 10, 2020. [Online]. Available: https://revcycleintelligence.com/news/clinicians-serving-socially-at-risk-at-a-disadvantage-under-mips.