What is MIPS? The Complete Healthcare Guide to MIPS Reporting & Compliance
Medicare has been shifting from paying for volume toward paying for value for quite some time, and MIPS is the program that puts that shift into practice. If you bill Medicare Part B and you’re not already tracking your MIPS score, it’s affecting your reimbursement whether you’re paying attention to it or not.
This guide covers what MIPS is, who has to participate, how reporting works, how your score gets calculated, and where EHR software fits into making the process less painful. When you’re evaluating new practice management or EHR software, knowing how MIPS works will help you ask the right questions.
What Is MIPS?
MIPS stands for Merit-based Incentive Payment System. It’s a Centers for Medicare & Medicaid Services (CMS) program that adjusts Medicare Part B reimbursement up or down based on a clinician’s performance across a set of measures.
MIPS came out of the Medicare Access and CHIP Reauthorization Act (MACRA), passed in 2015, which replaced the old Sustainable Growth Rate formula and several older reporting programs.* (https://www.cms.gov/medicare/quality/value-based-programs/chip-reauthorization-act) Instead of separate programs for quality reporting, EHR use, and practice improvement, MACRA folded them into one framework: MIPS.
The basic idea is straightforward. Clinicians report data across four performance categories. CMS turns that data into a composite score, and that score determines whether Medicare payments to that clinician go up, go down, or stay flat in a future payment year.
Who Needs to Participate in MIPS?
Not every clinician who bills Medicare has to report MIPS. CMS sets eligibility based on clinician type and volume thresholds.
Eligible clinician types typically include physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certain other practitioners billing Medicare Part B* (https://qpp.cms.gov/eligibility-participation/eligibility/determination).
Low-volume threshold exemptions apply to clinicians who fall below certain limits on Medicare Part B allowed charges, number of Medicare patients, or covered professional services. If you’re under all three thresholds, you’re exempt, though you can still opt in voluntarily.
Small practices face the same reporting categories as larger ones but often have more flexibility in how they report, and some measures and activities are weighted differently for small practices.*
(https://www.cms.gov/medicare/payment/fee-for-service-providers/shared-savings-program-ssp-acos/guidance-regulations)
Group vs. individual reporting is a choice, not a requirement. A practice can report as a group under a single Tax Identification Number, or clinicians can report individually. Group reporting means everyone in the group gets the same score; individual reporting means each clinician’s score reflects only their own performance.* (https://qpp.cms.gov/eligibility-participation/ways-to-participate/individual-or-groups)
If you’re not sure where you fall, CMS provides a QPP Participation Status lookup tool by NPI — that’s the fastest way to confirm eligibility rather than estimating from thresholds alone.
How Does MIPS Reporting Work?
MIPS runs on an annual cycle. Clinicians collect performance data during a defined performance period (generally the calendar year), submit that data by a CMS deadline, and receive a payment adjustment two years later. A 2026 performance year, for example, affects payments in a later payment year, not the same year.
There are several ways to submit data, and the right one depends on your practice’s setup:
- Certified EHR (attestation and direct submission): Many EHRs can capture and submit data directly to CMS for categories like Promoting Interoperability and Quality.
- Qualified Registry: A CMS-approved third party that collects data from your practice and submits it on your behalf, often across multiple data sources.
- Qualified Clinical Data Registry (QCDR): Similar to a Qualified Registry but can include specialty-specific measures not otherwise available under MIPS.
- CMS Web Interface: Historically available to larger groups, though CMS has phased out or restricted this option in recent years* (https://qpp.cms.gov/get-started/what-is-mips/reporting-options)
Whichever method you use, you’re reporting the same four categories underneath it. The submission mechanism is just the pipe the data flows through.
Understanding the Four MIPS Performance Categories
Each category is weighted differently in the final composite score, and the weights themselves can shift from year to year.* (https://qpp.cms.gov/reporting-requirements/ways-to-report/compare)
| Category | What It Measures | How It’s Scored |
|---|---|---|
| Quality | Clinical performance on selected quality measures, including outcomes, patient safety, and care coordination | Clinicians select measures relevant to their specialty and report performance rates against established benchmarks |
| Promoting Interoperability | Use of certified EHR technology to securely exchange health information | Scored through attestation and performance-based measures tied to health information exchange and patient access |
| Improvement Activities | Participation in activities that improve clinical practice, such as care coordination and patient engagement | Clinicians attest to completing activities from a CMS-defined inventory, with activities weighted by complexity |
| Cost | Medicare spending associated with the clinician’s patients, calculated by CMS using claims data | Calculated automatically by CMS, with no separate submission required |
Quality
This is typically the most heavily weighted category. Clinicians choose a set number of quality measures relevant to their specialty and report performance data across a defined period. Documentation matters here more than almost anywhere else in MIPS, because a measure is only as good as the data captured to support it.
Promoting Interoperability
This category replaced the old “Meaningful Use” program and focuses on whether a practice is using its EHR the way it’s designed to be used: securely exchanging records, giving patients electronic access to their information, and supporting care coordination through data exchange.
Improvement Activities
This is the most flexible category. CMS maintains an inventory of activities. Things like, expanded practice access, care coordination, and population health management, then clinicians attest to which ones they’ve implemented.
Cost
Unlike the other three categories, Cost requires no direct submission. CMS calculates it automatically from Medicare claims data tied to the clinician’s patients. That doesn’t mean it’s out of your control, though. Documentation and coding accuracy still influence how a patient’s cost episode gets attributed and measured.
How Is a MIPS Score Calculated?
CMS combines performance across the four categories into a single Composite Performance Score (CPS), using the category weights noted above. That score is then compared against a performance threshold set by CMS for the year.
- Score above the threshold: positive payment adjustment
- Score at the threshold: no adjustment
- Score below the threshold: negative payment adjustment
Payment adjustments apply to Medicare Part B payments in a future year, and they can move in either direction by several percentage points . On volume, that swing is real money. A few missed measures or a documentation gap in one category can be the difference between a bonus and a penalty two years later.* (https://www.cms.gov/files/document/2026-papi-parameters-guidance-2024-10-08.pdf)
Common MIPS Reporting Challenges
Most of the practices that struggle with MIPS aren’t struggling with the concept. They’re struggling with the mechanics:
- Manual data collection across paper notes, spreadsheets, and disconnected systems
- Missing or incomplete documentation that doesn’t support the measures being reported
- Tracking quality measures in real time instead of finding out at submission time that a measure wasn’t met
- Staff workload — MIPS reporting often lands on already-stretched administrative or clinical staff
- Reporting errors from manual data entry or reconciling multiple data sources
- Workflow inefficiencies where documentation happens in one system and reporting happens in another
Most of these are solvable with better workflows and better software, not with more staff double-checking spreadsheets.
Can EHR Software Help with MIPS Reporting?
Yes, when the EHR is built to support it. An EHR that’s genuinely designed around MIPS reporting can reduce a lot of the manual burden described above:
- Automated quality measure tracking that flags gaps during the patient visit, not after the reporting period closes
- Clinical reminders that prompt documentation the measures require
- Performance dashboards that show where a clinician or practice stands throughout the year, not just at submission time
- Built-in reporting and submission tools that reduce the need for a separate registry or manual upload
- Certified EHR Technology (CEHRT) status, which is required for Promoting Interoperability reporting and signals the software meets ONC certification standards
None of this replaces good clinical documentation. Software can surface gaps and reduce manual work, but it can’t invent data that was never captured. The foundation is still accurate, complete documentation at the point of care.
For a closer look at what to look for when evaluating EHR software specifically for MIPS reporting, see our guide: [MIPS Reporting Software: What to Look for in an EHR].
How to Choose the Right MIPS Reporting Solution
If you’re evaluating EHR or practice management software with MIPS in mind, a few things matter more than others:
- Specialty-specific workflows. Generic templates often miss the documentation points that specialty-specific quality measures require.
- Ease of reporting. Look for software that surfaces performance during the year, not just at submission time.
- CEHRT certification. Confirm the software is certified for the current edition CMS requires, not just certified at some point in the past.
- Dashboards and visibility. You want to know where you stand in March, not find out in December.
- Automation. Fewer manual uploads and reconciliations mean fewer errors.
- Support. CMS updates its requirements regularly; your vendor should keep the software current without you having to chase it.
- Interoperability. Reporting shouldn’t require exporting data from one system to manually enter into another.
This isn’t a decision to rush, and there’s no single “best” answer that fits every practice. The right fit depends heavily on specialty, practice size, and how your current documentation workflow already works.
MIPS Is a Compliance Requirement, But It’s Also an Opportunity
MIPS isn’t just a box to check for Medicare. A well-managed reporting process can mean a real reimbursement bump, and the workflow improvements that support good MIPS reporting (better documentation, better visibility into performance, less manual reconciliation) tend to pay off well beyond the reporting period itself.
If you’re evaluating new practice management or EHR software, understanding how a platform supports MIPS reporting, not just whether it technically allows it, is worth the time before you sign a contract. Our guide on MIPS Reporting Software: What to Look for in an EHR breaks down the specific features and questions to ask.
Frequently Asked Questions
What does MIPS stand for?
MIPS stands for Merit-based Incentive Payment System, a CMS program that ties Medicare Part B reimbursement to clinician performance.
What is MIPS in healthcare?
MIPS is a value-based payment program that adjusts Medicare reimbursement based on performance across four categories: Quality, Promoting Interoperability, Improvement Activities, and Cost.
Who is required to report MIPS?
Eligible clinicians who bill Medicare Part B and exceed CMS’s low-volume thresholds are generally required to participate, unless otherwise exempt.
(https://qpp.cms.gov/eligibility-participation/eligibility/determination)
How is a MIPS score calculated?
CMS combines weighted performance across the four categories into a Composite Performance Score, then compares it against a performance threshold set for that year.
What happens if I don’t report MIPS?
Clinicians who are eligible but don’t report typically receive the maximum negative payment adjustment for that payment year.
https://www.cms.gov/openpayments/program-participants/reporting-entities/audits-and-penalties
What is Certified EHR Technology (CEHRT)?
CEHRT refers to EHR software that has met ONC certification requirements, confirming it can support the data capture and exchange functions MIPS reporting depends on.
What are the four MIPS performance categories?
The 4 MIPS performance categories are: Quality, Promoting Interoperability, Improvement Activities, and Cost.
How do I improve my MIPS score?
Focus on complete and accurate documentation, choose quality measures that fit your specialty and patient population, and use software that surfaces performance gaps during the year rather than after the reporting period closes.