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Background of MIPS

By November 1, 2017 No Comments

Merit-based Incentive Payment System (MIPS) is a new Centers for Medicare and Medicaid (CMS) program based on the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) passed by Congress in 2015. While providing direction and insight into CMS vision for high quality and patient-centered care, it also unifies several of the previous CMS payment adjustment programs for eligible clinicians in Medicare into a single program. Eligible clinicians can find their Medicare reimbursement adjusted both positively and negatively based on how they perform in MIPS. The reimbursement is based on scoring in several categories and activities. This whitepaper provides a high-level overview of eligibility and timeline, different categories that comprise MIPS, and how results affect Medicare payments. This paper uses the first year of MIPS, CY 2017, as its basis for describing the requirements. In subsequent years, CMS will release annual updates to the MIPS rules, which can affect requirements for the coming year. Other Drummond Group whitepapers will address the specifics for those respective updates.

Eligibility and Timeline

Eligible clinicians

Compared with its Medicare and Medicaid EHR Incentive Program for Meaningful Use (MU), MIPS is open to a greater range of providers and clinicians, referred to as Eligible Clinicians (EC). Starting in CY 2017, an EC is defined as a physician, a physician assistant, nurse practitioner, clinical nurse specialist or a certified registered nurse anesthetist. However, the law allows for CMS to expand this definition to additional types of providers, which CMS plans to do in coming years. These changes will be announced in CMS’ annual MIPS update.

CMS does require a threshold value of number of Medicare patients seen and Medicare billing done during the performance year to qualify. Thus, some providers will not have to submit to MIPS because their Medicare patient count or billing is too low. Again, these specific threshold values are set in the annual MIPS update.

Timeframe and annual update

MIPS becomes effective in CY 2017. The general three-year life cycle of MIPS reporting is as follows:

  • Year 1: Performance Year
  • Year 2: Attestation Year
  • Year 3: Adjustment Year

For example, EC do the various MIPS-required activities for their MIPS performance in CY 2017. In CY 2018, they submit and attest to their results from the previous year. Those results are factored against the MIPS scoring requirements and results of other ECs to then give a Medicare payment adjustment, which comes into play on Medicare reimbursement. This is a repeating cycle, so the performance in CY 2018 is reported in CY 2019 to affect payment adjustment in CY 2020. Because it is not purely an incentive program, the cycle has no defined end date.

Each year, CMS provides an annual update on MIPS in which they make adjustments in the requirements, categories elements, scoring, eligibility and other definitions. CMS provides a proposed rule of its planned changes early in the year, accepts comments, and then finalizes the ruling before the end of the year.

Scoring and payment adjustments

MIPS provides details on how an EC can be scored across its various categories, and each year, CMS makes adjustments in the annual update. The scoring results of each category are combined together to achieve a MIPS Composite Score. This score is used to provide the payment adjustment factor for Medicare reimbursement, either negatively or positively. CMS rewards ECs who achieve high performance with a bonus payment, but otherwise, the payment adjustments average across the group based on performance of all ECs.


Categories of MIPS


The Quality category addresses specific clinical quality measures to determine the health care provided for patients with specific ailments and healthcare scenarios. Before MACRA, CMS used the Physician Quality Reporting System (PQRS), which is closed with CY 2016 being its last year. This is now moved into the Quality category of MIPS.

Within Quality, there numerous clinical quality measures (CQMs) to evaluate clinical care, nearly 300 for the first performance year of CY 2017. The CQMs are developed by organizations such as NCQA and medical associations to target clinical care for specific specialties and types of care. The CQMs cover the various healthcare domains that CMS is targeting for improvement such as “Patient Safety” and “Efficiency and Cost Reduction”.

In general, a CQM determines “success” by doing a calculation of the numerator and denominator of that measure. The denominator represents the patients or encounters that are of clinical interest, for example patients with hypertension, and the numerator represents the intended clinical outcome or goal with respect to that denominator measure, such as regular measurement of blood pressure for patients with hypertension. Together, this gives us a numeric percentage to evaluate the care of the patient.

The percentage results of measures are crossed against a benchmarking threshold to “rank” the performance. This results in a point score of 0-10 per measure, and the collective point scores of the submitted measures are added together. For CY 2017 performance period, the eligible clinician can choose up to six measures to submitted and counted in the scoring.

Eligible clinicians can use either different methods to submit their results, primarily their EHR or qualified registries or claims data. Because some submission methods provide different degrees of accuracy, the means of submission affects the benchmarking scoring previously mentioned.

Improvement Activities

Improvement activities are defined by CMS as activities that demonstrate or lead to better health outcomes for patients. By giving incentives to eligible clinicians to undertake these activities, CMS believes it will lead to better patient care.

Current CMS rules for CY 2017 performance period have ninety-two (92) different improvement activities, but CMS will continue to add or remove improvement activities in coming years. The improvement activities focus on areas such as expanded practice access, population management, and care coordination. A general description for each one is provided along with a validation goal, but the overall approach for implementing the improvement activity is left to the eligible clinician. It is intentional in its openness and flexibility as eligible clinicians are encouraged to adapt it to the specific needs of their practice and patient community. The eligible clinician implements one or more of the improvement activities for a 90-day period in CY 2017, and then attests to completing it to receive scoring in MIPS.

The improvement activities are weighted as high or medium based on difficult and general importance given by CMS on the respective activity. The high-weighted activities are given 20 points for successful completion, and medium-weighted activities are given 10 points for successful completion. There is no partial scoring, as the improvement activity is either successful or not. Maximum points allowed for this category are 40. CMS provides some general guidelines on how to conduct the activity and judge successful outcome, but it is largely open and left to the implementer.

Advancing Care Information

The Advancing Care Information (ACI) category comes from the Medicare EHR Incentive Program for Meaningful Use. Since 2010, the MU program has existed to promote the adoption and use of certified EHR technology among providers and hospitals. MU worked through requiring EHR technology to be certified to various clinical and security criteria. Providers and hospitals used the certified EHR technology (CEHRT) for objectives specified by the MU program and had specific threshold measures to meet.

Through MIPS, the eligible provider Medicare portion of the MU program has been ended and relaunched in the ACI category. ACI looks very similar to Medicare MU but with some changes to add flexibility to providers and clinicians. It should be noted that the eligible provider Medicaid portion of MU remains, as does the eligible hospital portion of MU.

With ACI, eligible clinicians have some specific measures, called Base Measures, they must report on to qualify for any ACI points. However, the threshold is very low to qualify, so as long as ECs do some basic use of their CEHRT, they should achieve at least 50% of the possible points.

Greater points are available when doing more measures, called Performance Measures, and scoring higher in the measures. Thus, CMS allows a balance of ECs with more basic workflow implementations of CEHRT to qualify for some points while rewarding those more establish practices who better use CEHRT.


CMS had been using a program called Value Modified (VM) to evaluate cost effectiveness in treating Medicare beneficiaries for physician fee services. It allows for a payment adjustment on Medicare reimbursements. Aspects of this VM program have been brought into the Cost category in MIPS.

Cost category examines factors such total per-capita cost for patients, the Medicare Spending per Beneficiary (MSPB) measure, and episode-based measures. It considers and makes necessary adjustments for geographic payment rate and beneficiary risk factors. Cost scoring is calculated through submitted Medicare claims.

Fewer details are known about the Cost category than the other three categories as CMS has indicated Cost will not be factored into the MIPS scoring for CY 2017. It will eventually be phased in for reporting, and more details will come at that time.




Snapshot of Certification Requirements
Across CMS Programs

In a recent final rule, CMS made notable changes to its EHR Incentive Program (“Meaningful Use” or “MU”) regarding certified EHR technology (CEHRT) and quality measure reporting. These changes directly affect eligible providers (EP) who qualify in the MU-Medicaid program and eligible hospitals and critical access hospitals (EH/CAH).

At almost the same time, CMS proposed changes for CY 2018 regarding CEHRT and quality measure reporting in the MIPS Quality Payment Program. MIPS affects eligible clinicians (ECs) regarding Medicare reimbursements.

To quickly see and understand these requirements, a snapshot summary of the certification requirements as proposed is listed below. Please note this data is subject to change pending future CMS rulings.

CEHRT and Measure Reporting

For certified EHR technology requirements, MU and MIPS are more alike than different. The similarities:

  • Reporting period of consecutive 90 days for either CY 2017 or CY 2018.
  • 2014 Edition or 2015 Edition CEHRT can be used for either CY 2017 or CY 2018.
  • Modified Stage 2 Measures for MU and ACI Transition Measures for MIPS are largely the same.
  • Stage 3 Measures for MU and ACI Measures for MIPS are largely the same.
  • If using 2014 Edition CEHRT, the EC/EP/EH/CAH must follow Modified Stage 2 / ACI Transition Measures.
  • If using only 2015 Edition CEHRT, EC/EP/EH/CAH may follow Modified Stage 2 / ACI Transition Measures or Stage 3 / ACI Measures.

The key differences:

  • MIPS awards bonus points to its scoring system in CY 2018 if using exclusively 2015 Edition CEHRT.
  • System for Measure scoring or compliance is very different between MIPS and MU, which means the criteria necessary to be certified can be different.
  • MIPS requires support for EC group reporting and attestation at the NPI/TIN level.
  • MU allows more exceptions for Measure compliance than MIPS.



Quality Measure Reporting

With respect to clinical quality measures, there are some notable differences across the program that are best summarized on this table.

CY Program Reporting Period Available Measures Measure to Report Submission Method
2017 MU-EP Consecutive 90-Days 53 6 eCQM or Attestation
2017 MU-EH/CAH 1 Quarter of CY 16 4 eCQM
2017 MIPS-Quality Consecutive 90-Days 270+ 6 Multiple
2018 MU-EP Consecutive 90-Days 53 6 eCQM or Attestation
2018 MU-EH/CAH 1 Quarter of CY 16 4 eCQM
2018 MIPS-Quality Consecutive 90-Days 270+ 6 Multiple



  • For MIPS, EC may submit fewer than six quality if the eligible clinician cannot find six that are applicable.
  • For MU, clinical quality measures must be certified in CEHRT to be submitted.
  • For MU-EH/CAH, the CEHRT must be certified on all 16 quality measures, even though the hospital organization only needs to submit on four of the measures.
  • Changes for MIPS-Quality in CY 2018 are as proposed. CMS will confirm rules for CY 2018 in fourth quarter of CY 2017.



General Information: https://qpp.cms.gov/about/resource-library

General Information: https://qpp.cms.gov/docs/QPP_Advancing_Care_Information_Measure_Specifications.zip

Quality Measures: https://qpp.cms.gov/docs/QPP_quality_measure_specifications.zip


Meaningful Use:

Modified Stage 2 – EP: https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/TableofContents_EP_Medicaid_ModifiedStage2.pdf

Stage 3 – EP: https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/TableofContents_EP_Medicaid_Stage3.pdf

Modified Stage 2 – EH/CAH: https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/TableofContents_EH_Medicaid_ModifiedStage2.pdf

Stage 3 – EH/CAH: https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/TableofContents_EH_Medicaid_Stage3.pdf

Electronic Quality Measures: https://ecqi.healthit.gov/




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