The Medicare Merit-based Incentive Payment System (MIPS) is well-intentioned, but its reporting requirements are burdensome to physician practices and often appear to be clinically irrelevant, with a focus on checking boxes rather than improving care.
And the payment system is hurting certain types of physicians more than others.
MIPS grew out of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, which promised to create a path to a value-based health care system that would reward physicians more for the successful patient outcomes they helped achieve rather than for the volume of the clinical tasks they completed.
But reports from the Centers for Medicare & Medicaid Services (CMS) show the program isn’t always accomplishing what it was intended to do.
While 87% of MIPS-eligible clinicians avoided a penalty or earned a bonus for the 2022 practice year, which affects payment in 2024, the 13% of practices that were penalized continue to disproportionately be small practices and rural practices. According CMS’ 2022 Quality Payment Program Experience Report:
- 27% of small physician practices were penalized.
- 18% of rural physician practices were penalized.
- Nearly 30% of physicians in solo practite received the maximum 9% penalty.
- Anesthesiology and orthopaedic surgery were among the specialties with the highest proportion of physicians getting a penalty.
Physicians say the Medicare physician payment systems, including MIPS, is in dire need of change. One alternative payment methodology is direct primary care, in which the patient signs a contract with a physician and pays them a set amount every month to get care from that physician.
“A lot of physicians are going to that model of care because it will stabilize their income over the course of the year and they can see fewer patients,” said rural Virginia family physician Sterling N. Ransone Jr., MD. He added that doctors “can spend that extra time with their patients, taking care of important issues to the patients, their families, and—quite frankly—their communities.”
Dr. Ransone is among the AMA members who have taken time to share their firsthand perspectives on the impact of unsustainable Medicare physician payment in interviews with the AMA.
The AMA is leading the charge to reform the Medicare payment system, which is the AMA’s top advocacy priority.
Learn how physicians can take part in the fight to reform Medicare on behalf of your patients and practices at the AMA's Fix Medicare Now website.
AMA outlines a new approach
The AMA has long been concerned about the undue administrative burden placed on physicians subjected to MIPS reporting requirements, the program’s lack of improvement in patient outcomes and quality of care, and the limited scope of quality measures for specialists.
With substantial input from national medical specialty societies and physicians across the country, the AMA has developed a statutory proposal to replace the MIPS tournament model of payment adjustments with a more sustainable approach tied to annual payment updates, give CMS incentives to share data with physicians, and improve the measures.
The MIPS replacement, called the “Data-Driven Performance Payment System,” would freeze the performance threshold to avoid a penalty at 60 points for at least three years and call for a study to improve the threshold methodology. It would also eliminate the win-lose style payment adjustments that include a maximum penalty of negative 9% and instead link performance in MIPS to a percentage increase or decrease of the annual update, which would better align across Medicare payment programs, such as the Hospital Inpatient Quality Reporting System.
This proposed approach would replace steep penalties that are unevenly distributed, ensure timely access to data, reduce unnecessary administrative burden and increase the clinical relevance of the program to physicians and their patients.
More details about this proposed replacement for MIPS are in the AMA’s response (PDF) to the Senate Finance Committee white paper on bolstering chronic care in Medicare Part B.
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Research shows MIPS’ flaws
“Evidence of the shortcomings of MIPS continues to pile up,” notes an AMA MIPS explainer (PDF). The AMA cites research from JAMA Network™ journals and others showing that MIPS:
- Scores are inconsistently related to performance, and physicians caring for more patients from historically marginalized racial and ethnic groups were more likely to receive low scores despite providing high-quality care.
- Compliance costs $12,800 per physician per year, and physicians spend 53 hours per year on MIPS-related tasks—the equivalent of a full week of patient visits.
- Exacerbates health inequities. In the first year of MIPS, physicians with the highest proportion of patients dually eligible for Medicare and Medicaid had significantly lower MIPS scores compared with other physicians.
- Hurts independent practices as MIPS-eligible physicians affiliated with better-resourced health systems were associated with significantly better MIPS performance scores.
In addition, current law calls for 0% payment update for MIPS-eligible physicians through 2025 and penalties of up to negative 9%.
The MIPS explainer notes that CMS has tried to improve the program, but these changes “are superficial as the agency is hamstrung by its lack of statutory authority to remedy these problems directly.”
Catch up on the Medicare basics
While the AMA is working relentlessly to build understanding on Capitol Hill about the unsustainable path the Medicare payment system is on, preventing further cuts means getting to the root causes of what’s wrong with Medicare physician payment.
That is why the AMA created the Medicare Basics series, which provides an in-depth look at important aspects of the Medicare physician payment system. With these six straightforward explainers, policymakers and physician advocates can learn about key elements of the payment system and why they are in need of reform.
Visit AMA Advocacy in Action to find out what’s at stake in reforming Medicare payment and other advocacy priorities the AMA is actively working on.
— Senior News Writer Andis Robeznieks wrote an earlier version of this article.
