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Merit-based Incentive Payment Systems

 The Merit-based Incentive Payment System (MIPS) is part of the Medicare Quality Payment Program (QPP). QPP was created by the Medicare Access and CHIP Reauthorization (MACRA) act of 2015. MACRA requires clinicians to implement an incentive program. There are two choices – MIPS or Advanced Alternative Payment Models (APMS). For this Tip of the Month, we will focus on the MIPS pathway.  


MIPS was designed to tie payments to quality and cost-efficient care, drive improvement in healthcare, increase the use of healthcare information and reduce the cost of care. The MIPS performance year begins on January 1 and ends on December 31 each year. Performance is measured across four areas: quality, improvement activities, promoting Interoperability, and cost.

There are four data submission options for MIPS:

  • Claims based submission
  • Qualified Clinical Data Registry (QCDR)
  • Qualified registry
  • Electronic Health Record (EHR) or Electronic Medical Record (EMR) data extraction and reporting

MIPS was designed so that payments can be balanced up or down to keep an average change of 0% across reimbursements. Since performance is measured based on the calendar year the 2021 payment adjustment will be +/- 9% in 2023. MIPS eligible providers who enrolled in Medicare prior to 1/1/2021 are required to participate in MIPS; including (but not limited to) physicians of all specialties, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, clinical psychologists, physical therapists, and occupational therapists. Clinicians are not eligible to participate if they are in their first year of Medicare Part B participation or are below either of the low-patient thresholds.

To understand MIPS, it is important to thoroughly read through each measure. Then, focus on the key components for meeting the measure requirements. First, check the age restrictions and qualifying Code sets (CPT, ICD, HCPCS). These will be found within the Denominator section. Next, move onto the Numerator section. Here you will find documentation requirements and/or definitions and the specified numerator options.

Understanding the numerator options is key to successful MIPs submissions. You will be given options for performance met or performance not met. Each will have required criteria to apply the specific code(s) that support the measure.

Below are the key sections for determining performance:

  • Description: Explanation of the measure
  • Instructions: Purpose of the measure
  • Denominator: Explanation of the application of the qualifying criteria
    • Denominator criteria: Qualifying code requirements
  • Numerator
    • Numerator instructions: Explanation of the measure
    • Definitions: Detailed explanation of the components of the measure
  • Numerator options: Explanation of the required documentation
    • Performance met: Documentation supports the measure
    • Performance not met: Outline of when documentation does not meet the measure

To determine if performance has been met or not met, review the documentation within the applicable document type. Based on whether performance is met or not met a certified coder will add the appropriate MIPS tracking code to the claim.

Hopefully this information assists you on your journey to MIPS based QPP compliance!


Please contact us if you have questions or suggestions for future topics of discussion, or for help implementing or mapping to standard terminologies.