With healthcare continuing to be a value-based delivery of care, MIPS will play an important role for Medicare providers. While providing incentives, MIPS healthcare also brings with it the possibility of penalties for those who do not pass certain performance thresholds.
In this guide, we will help you understand how you can avoid penalties in MIPS healthcare.
Let’s get started!
What are MIPS Healthcare Penalties?
MIPS penalties are reductions in payment for Medicare Part B claims submitted by a clinician if the actual performance standards for participation in the MIPS healthcare program for that year have not been met. The penalty calculations depend on national-level performance. It changed from year to year. The highest penalty in 2024 for a reduction in Medicare payment was 9 percent less.
Breaking Down MIPS Healthcare Score Calculation
Four types of categories exist when it comes to MIPS program requirements.
It includes:
- Quality
- Promoting Interoperability
- Improvement activities
- Cost
The score is evaluated and measured differently for each category. Your MIPS healthcare scores for each of these categories are added together to give you your final MIPS CPS (Composite Performance Score). However, the categories are weighted, therefore, some of them will have a greater impact on your MIPS CPS than others.
CMS has historically changed the category weights year to year. In 2024, the category weights were like this:
- Quality – 30%
- Promoting Interoperability – 25%
- Improvement Activities – 15%
- Cost – 30%
Your final CPS for an MIPS healthcare performance year determines the payment adjustment for the fiscal year that is two years later. Generally, this means that there will be a two-year delay between when the individual impacts the performance year and when the actual impact feels them.
For example, what was paid for during 2022 impacts payments for the fiscal year of 2024.
MIPS Healthcare Performance Threshold
Each year, CMS sets a minimum MIPS Composite Performance Score (CPS), called the “performance threshold,” that clinicians must meet to avoid penalties and potentially earn extra money. The penalties and rewards depend on how far your score is from this threshold, with adjustments based on a sliding scale.
Here’s how it works for 2024, where the threshold was set at 75 points:
0-18.75 Points: -9% penalty on Medicare payments
18.76-74.99 Points: Penalty ranging from just below -8.99% up to 0%, based on your score
75-100 Points: CMS redistributes funds from lower performers to those who meet the threshold, so if you score in this range, you could earn up to a 9% increase in Medicare payments.
Is MIPS the Ideal Reporting Framework for You?
Of course, CMS has other reporting options under the Quality Payment Program that may make more sense for your practice. Those options include MIPS Value Pathways (MVP), which measures performance specifically by specialty. It is eventually supposed to replace traditional MIPS and the APM Performance Pathway (APP) for Accountable Care Organizations (ACOs).
4 Steps to Avoid MIPS Penalty in Payment Year 2024
You can avoid MIPS healthcare penalties by following the steps below:
- Use the CMS QPP Participation Status Tool at the CMS official website to determine if you are eligible for MIPS. The tool will tell you if you are excluded from having to report MIPS. As you have low Medicare volume, you are new to Medicare during the performance year, or you are participating as a QP in an Advanced APM such as ACO. If you are excluded, you do not have to report MIPS data.
- If you need to report MIPS, first check whether your institution, employer, or group will report all of your MIPS data on your behalf. If so, they are reporting through group reporting ACO or an APM. You don’t have to report your data separately.
- If your data isn’t submitted for you, and you are not exempt, you will need to report your MIPS data yourself. Always remember that the performance threshold increased to 75 points for 2022, so you’ll likely report in all categories.
- You must have at least 75 points to avoid the MIPS healthcare penalty. You can no longer meet the threshold by not reporting in all four MIPS categories, which was permissible in prior years when the threshold was lower and category weights were less. According to the ACS, to maximize your chances of avoiding the penalty in the 2024 payment year, you should fully report in the Promoting Interoperability (PI), Improvement Activities (IA) and Quality categories (CMS calculates Cost).
If you want to learn more about MIPS scoring and how you can improve it, you may consult with Prime Well Med Solutions now!
How does MIPS affect payment adjustments?
MIPS payment adjustments range between -9% and +2.15% for the year 2025. A MIPS score of 100 means you earn an addition of +2.15%. Federal law requires CMS to adjust MIPS payments in such a way that would ensure the budget as a whole remains balanced.
Wrapping Up!
You need to be aware of MIPS healthcare program requirements, focus on high-impact categories, and ensure accuracy in data submitted correctly and on time. These are the steps that healthcare providers have to carry out to avoid the MIPS penalty in 2024 and also enhance their quality of care as well as financial performance.
