Merit-Based Incentive Payment System

The Sustainable Growth Rate (SGR) Repeal and Medicare Provider Payment Modernization Act of 2014 repeals Medicare's sustainable growth rate (SGR) formula for setting physician pay and also rolls three Medicare bonus-and-penalty programs into the Merit-Based Incentive Payment System (MIPS). This new program will streamline and incorporate the Physician Quality Reporting System (PQRS), Value-Based Modifier (VBM) and Meaningful Use of Electronic Health Records (EHR MU). The current programs will sunset at the end of 2018.  Payments to professionals under MIPS will start in 2019. The money from penalties that would have been assessed will remain in the physician fee schedule increasing total payments compared to the current law baseline. 

MIPS will assess the performance of eligible professionals in the four categories: Quality, Resource Use, Meaningful Use and Clinical Practice Improvement Activities. Each year, the Secretary of Health and Human Services will publish through notice and comment rulemaking a list of quality measures to be used in the forthcoming MIPS performance period. Professionals will receive a composite score of 0 – 100 based on their performance in the four assessment categories. They will only be assessed on the categories, measures and activities that apply to them. Professionals will receive credit for improvement from one year to the next in the quality and resource use performance categories in order to incentivize improved performance. 

Professionals’ composite scores will be compared to a performance threshold. The performance threshold will be the mean or median of the composite performance score for all MIPS eligible professionals during a period prior to the performance period. Professionals are to be informed of the composite score they must achieve to obtain incentive payments and avoid penalties. Those whose composite scores fall above the threshold will receive a positive payment adjustment; those whose composite scores fall below the threshold will receive a negative payment adjustment.