MIPS stands for the Merit-based Incentive Payment System, a program run by the Centers for Medicare and Medicaid Services (CMS) that ties a portion of Medicare reimbursement to how well clinicians perform on quality and cost measures. If you bill Medicare for professional services, your MIPS score directly affects how much Medicare pays you in future years, with adjustments ranging from a 9% penalty to a positive bonus.
How MIPS Works
MIPS is one track within the larger Quality Payment Program (QPP), which Congress created to replace older pay-for-reporting programs. Under MIPS, clinicians collect and submit performance data to CMS each year. CMS also gathers some data automatically, particularly around cost. All of that information is scored, and the resulting number determines whether your Medicare reimbursement goes up, goes down, or stays the same in a future payment year.
The core idea is straightforward: clinicians who deliver higher-quality, more cost-efficient care earn higher payments, while those who fall short see their payments reduced. The system is budget-neutral, meaning the money collected through penalties funds the bonuses for top performers.
Who Needs to Participate
Not every clinician is subject to MIPS. You’re only eligible if you meet all three parts of the low-volume threshold in a given year:
- Billing: more than $90,000 in Medicare Part B covered professional services
- Patients: more than 200 Medicare Part B patients
- Services: more than 200 covered professional services to those patients
If you fall below any one of those thresholds, you’re excluded from MIPS and won’t receive a payment adjustment. This carve-out is designed to keep solo practitioners and low-volume clinicians from being penalized by a system built for higher-volume practices. Clinicians who participate in certain Advanced Alternative Payment Models (APMs) may also be exempt, since they follow a separate payment track within QPP.
Performance Categories and Scoring
MIPS evaluates clinicians across several performance categories. Historically, four categories have been weighted and scored: Quality, Cost, Improvement Activities, and Promoting Interoperability (which covers the use of electronic health records). Each category contributes a percentage of your total MIPS score, though those weights have shifted over the years as CMS phases in greater emphasis on cost.
Starting with the 2025 performance period, Improvement Activities are no longer weighted in the final score. You still need to complete one or two qualifying activities depending on your reporting situation, but they no longer contribute points. This change concentrates the scoring on how well you perform on clinical quality measures, how efficiently you use resources, and how effectively you use health IT to coordinate care.
Your scores across all weighted categories are combined into a single final score on a 100-point scale. That number is what determines your payment adjustment.
The 75-Point Threshold
The performance threshold, the score you need to avoid a penalty, is 75 points. This threshold stays in place through the 2028 performance year. Here’s how the scale breaks down:
- Below 18.75 points: maximum negative adjustment of 9%
- 18.76 to 74.99 points: negative adjustment on a sliding scale between 9% and 0%
- Exactly 75 points: no adjustment, payment stays neutral
- 75.01 to 100 points: positive adjustment, scaled to maintain budget neutrality
The maximum penalty is 9%, set by law. The size of positive adjustments varies each year because CMS applies a scaling factor so total bonuses don’t exceed total penalties collected. In practical terms, this means a perfect score doesn’t guarantee a 9% bonus. The actual positive adjustment depends on how many clinicians scored above the threshold and how much penalty money is available to redistribute.
The Two-Year Delay
One detail that catches many clinicians off guard is the timeline. MIPS operates on a two-year lag between when you deliver care and when your payment adjustment takes effect. The performance year runs from January 1 through December 31. You then submit your data between January 2 and March 31 of the following year. The payment adjustment based on that data kicks in the year after submission.
For example, care delivered during the 2025 performance year gets reported in early 2026. The resulting payment adjustment applies to all of your Medicare Part B claims throughout 2027. This means decisions you make today about quality reporting and care efficiency won’t show up in your reimbursement for roughly two years. It also means that if you skip reporting entirely, the penalty hits your revenue well after the missed opportunity to collect data.
MIPS Value Pathways: The Next Phase
CMS has been gradually introducing MIPS Value Pathways (MVPs) as an alternative to traditional MIPS reporting. Each MVP bundles a focused set of measures and activities around a specific specialty or medical condition, making reporting more clinically relevant. Instead of choosing from a broad menu of measures that may not align with your practice, an MVP lets you report on metrics that actually reflect the care you provide.
MVP reporting is currently optional. You can choose to report through traditional MIPS, through an MVP, or (if eligible) through the APM Performance Pathway. However, CMS has stated its intention to sunset traditional MIPS through future rulemaking, at which point MVPs would become the default reporting method for most clinicians. No firm date has been set for that transition, but the direction is clear: MVPs are designed to eventually replace the broader, less focused traditional framework.
What This Means for Your Practice
If you’re a clinician or practice administrator trying to understand what MIPS means for your bottom line, the key numbers to remember are the 75-point threshold and the 9% maximum penalty. Falling short of 75 points costs you money on every Medicare Part B claim for an entire year. Scoring well above 75 earns you a bonus, though the exact amount fluctuates.
The practical work of MIPS involves choosing which quality measures to report, ensuring your electronic health record systems meet Promoting Interoperability requirements, and tracking the cost measures CMS calculates from claims data. Many practices use registry services or their EHR vendor’s built-in tools to handle data submission. The submission window closes on March 31 each year, and there are no extensions, so building reporting into your routine well before the deadline is critical.
For clinicians near the low-volume threshold, it’s worth checking your eligibility status through the QPP website each year. Your patient volume and billing can fluctuate enough to push you in or out of MIPS eligibility from one year to the next, and being caught off guard by a reporting requirement you didn’t expect can result in an automatic penalty.