What’s the news: There are many changes that can be made to the Medicare Merit-based Incentive Payment System (MIPS) program to reduce the regulatory burdens it places on physicians and their practices, the AMA says in a letter to Stephanie Carlton (PDF), the acting administrator for Centers for Medicare & Medicaid Services (CMS).
One of the executive orders signed in this second Trump administration, No. 14192, calls for “unleashing prosperity through deregulation.” In the AMA’s letter to Carlton, Executive Vice President and CEO James L. Madara, MD, wrote that “there is no better opportunity to fulfill” that executive order “than by cutting the morass of complicated rules and requirements for compliance with the ineffective” MIPS program.
The administration has an opportunity to make changes in the 2026 Medicare physician payment schedule proposal, Dr. Madara wrote, outlining physicians’ recommendations on how to improve MIPS. An appendix to the letter outlines detailed suggestions and accompanying statutory authority that allows the changes to be made.
The AMA is leading the charge to reform the Medicare payment system, and in his letter Dr. Madara listed these as some of the “urgently needed improvements” to reduce MIPS’ regulatory burdens:
- Awarding multicategory credit and ensuring MIPS Value Pathways are clinically relevant so patients can compare quality and cost across physician practices.
- Reducing unnecessary quality-measure reporting burden and eliminating arbitrary scoring rules that drive up the cost of compliance with MIPS and discourage reporting on new and substantially revised measures.
- Fixing the long-standing inaccuracies with the MIPS cost measures and nullifying their negative impact on Medicare physician payment and patient access to care until these issues can be properly addressed.
- Sharing timely, critical MIPS performance data and Medicare claims data with physicians to facilitate better quality and lower costs.
Why it matters: MIPS had good intentions behind it when it was implemented in 2017. The aim was to streamline three historic and disparate quality-reporting programs to reduce burden, leverage registries, technology and frequent data sharing to improve quality for patients, and reduce avoidable costs in Medicare. But that hasn’t come to fruition.
The reporting requirements are overly burdensome for physicians and their staff and often appear to have no clinical relevance. And the payment system tied to MIPS has hurt small and rural practices across the country because they have fewer resources to divert from patient care to comply with the bloated, ever-changing MIPS requirements.
In 2024, more than 45% of physicians and other eligible clinicians in solo practices were penalized under MIPS, along with 31% of those in small practices and 18% of those in rural practices. By comparison, less than 14% of all eligible physicians and other clinicians were penalized. According CMS’ 2022 report on the program, nearly 30% of physicians in solo practice got the maximum 9% penalty. The agency’s report also showed that anesthesiology and orthopaedic surgery were among the specialties with the highest proportion of physicians seeing a penalty.
“MIPS has yet to demonstrate better health outcomes for Americans or lower avoidable spending. Nevertheless, the program imposes steep compliance costs on physicians,” Dr. Madara noted, citing a JAMA Health Forum study finding that physicians spent $12,800 and over 200 hours a year to comply with MIPS.
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In this year’s final Medicare physician payment schedule, CMS itself estimated that MIPS in 2025 would impose health-system burdens equating to 586,877 hours and cost more than $70 million.
Even worse, a separate JAMA study found that the program cuts practices’ Medicare payment by up to negative 9% despite being “approximately as effective as chance in terms of identifying high versus low quality performance.”
Learn more: The AMA has proposed a new, budget-neutral incentive payment system that every state medical society and more than 100 national specialty societies (PDF) have endorsed. It is called the Data-Driven Performance Payment System.
MIPS is just one part of the problem with Medicare physician payment, which has fallen by 33% since 2001 (PDF) after accounting for practice-cost inflation. That’s why fixing Medicare now is the AMA’s top advocacy priority.
Explore further with the AMA’s Medicare Basics series, which provides an in-depth look at important aspects of the Medicare physician payment system.
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.
