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Merit-Based Incentive Payment

Jun 1, 2015

The Merit-Based Incentive Payment (MIPS) system was set up as a compromise by the Health and Human Services Department to replace the current Medicare Part B Sustainable Growth Rate (SGR). The MIPS system is based on aggregating annual levels of activities for eligible providers. 

MIPS annually measures Medicare Part B providers in four performance categories to derive a score from 0 to 100 points, which can significantly change a provider's Medicare reimbursement in each payment year.  The performance categories are: Value-Based Modifier (VBM)-measured quality (up to 30 points), VBM-measured resource use (30 points), Meaningful-Use (MU) (25 points), and a new category named "clinical practice improvement" (15 points).  The MIPS score's maximum impact on reimbursement increases from +/- 4% for the 2019 payment year to +/- 9% for the 2022 and subsequent payment years. 

 The measurement or performance period determining the MIPS score should end prior to and as close as possible to the provider’s payment year.  Based on our past experience with Medicare programs such as MU and VBM, there is typically a two-year lag from performance year to payment year, making 2017 the anticipated first performance year—the MIPS score would then adjust reimbursements in the 2019 payment year. 

The payment adjustments that could be made to the reimbursement levels of a practice are potentially significant. Providers and their business management team needs to be compliant with the requirements of the MIPS program.

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