Navigating MIPS and Alternative Payment Models as a Primary Care Provider

November 12, 2020

The Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) offer primary care providers a range of opportunities to make the most of their journey to value-based care.


In 2015, Congress took a big step to reduce the complexity of quality reporting and improve financial stability for providers by passing the Medicare and CHIP Reauthorization Act, commonly known as MACRA.

In addition to repealing the flawed Sustainable Growth Rate (SGR) methodology, MACRA introduced the Quality Payment Program (QPP) as the next step for fostering better outcomes and controlling costs for the nation’s Medicare beneficiaries.  

The QPP brought three major quality reporting programs under the same umbrella with the intention of simplifying the reporting process and emphasizing the importance of value-based care.

Providers eligible for the program can participate in one of two tracks: the Merit-Based Incentive Payment System (MIPS) or Advanced Alternative Payment Models (AAPMs).

For primary care providers, understanding how MIPS and APMs are structured and how to maximize opportunities to earn positive payment adjustments within these programs can support long-term success for their practices. 

What is MIPS?

MIPS is overseen by the Center for Medicare and Medicaid Services (CMS).  The program combined and replaced three former Medicare initiatives: the EHR Incentive Programs (Meaningful Use), the Physician Quality Reporting System (PQRS), and the Value-Based Payment Modifier (VBPM).

Each of these programs is reflected in one of the new reporting categories in MIPS:

  • Meaningful Use has transformed into Promoting Interoperability
  • PQRS is now covered by the Quality category
  • The Value-Based Payment Modifier is now the Cost category

MIPS has also added a new category, called Improvement Activities, which includes certain population health management and care coordination strategies.

Participating providers will receive a composite score on a scale of 0 to 100 based on how well they perform on measures within each category.  Clinicians can report either as individuals or as groups.  The four performance areas are weighted differently, and the weights will change throughout the program as participants gain experience.

The scoring benchmarks tied to positive and negative payment adjustments also change on a yearly basis.  Participants who score below the minimum threshold will see a negative payment adjustment, while providers who score highly will receive positive payment adjustments.  Top-performing participants may also be eligible for an “exceptional” payment bonus. 

For Performance Year 2020, the maximum potential positive and negative payment adjustments are +/- 9 percent of Medicare reimbursement. Participants who meet the “exceptional” bonus scoring threshold could receive an additional sliding scale positive adjustment of up to 10 percent.

Some providers, including those who treat very few Medicare patients, are exempt from MIPS.  Others may be eligible for hardship exemptions.  Providers can also “test out” of the program if they are participating in a qualifying Advanced APM and meet certain criteria within the AAPM program. 

Breaking down the four MIPS quality reporting categories

MIPS aims to simplify the process of rewarding providers for high performance across a broad range of activities and requirements.  The program is organized into four reporting categories that, together, cover the range of clinical activities, spending benchmarks, technology adoption, and patient-centered care techniques that indicate a high-quality practice.


The Quality category replaces PQRS and comprises 45 percent of the final composite score for Performance Year 2020.  Participants must report on six measures, including one outcome measure.

There are more than 200 measures to choose from in 2020, allowing providers to pick the activities that best fit their practice.  Some measures that may be applicable for primary care providers include diabetes A1C control, anti-depressant medication management, advance care planning, flu and pneumococcal immunization, and BMI screening.


The Cost category includes elements of the Value-Based Modifier program.  It uses positive and negative payment adjustments to encourage smarter spending and better outcomes.  Cost measures are evaluated automatically through administrative claims data.  

Participants are evaluated on spending related to specific episodes of care as well as overall spending rates.  This category contributes to 15 percent of the composite score.

Promoting Interoperability

Promoting Interoperability, also briefly known as Advancing Care Information (ACI), is the analog for Meaningful Use.  It makes up 25 percent of the final score.  

Many of the measures revolve around expanding public health capabilities, such as registry reporting, prescription drug monitoring, and syndromic surveillance, as well as providing patients with access to their personal data and leveraging health IT to improve care coordination.

Improvement Activities

Improvement Activities is a new category that includes patient-centered practice transformation activities such as expanding access to care, embracing team-based care delivery, and sharing the decision-making process with patients.  It makes up 15% of the final score.  

Providers can report on a combination of high-weighted and medium-weighted activities.  Participants in a recognized or certified patient-centered medical home (PCMH) will automatically receive full credit for this category, highlighting the importance CMS is placing on coordinated care delivery.

What about Alternative Payment Models?

Alternative Payment Models play an important role in the Quality Payment Program.  There are two types of APMs, some of which overlap.

MIPS APMs are certain approved models that focus on tying payment to performance, such as the Comprehensive Primary Care Plus (CPC+) Model, the Bundled Payments for Care Improvement Advanced Model (BPCI Advanced), and all tracks and levels within the Medicare Shared Savings Program (MSSP), now known as Pathways to Success.

Providers participating in MIPS APMs must still report on MIPS criteria, but are subject to a special scoring system that is designed to allow participants to focus on quality care delivery.

Some MIPS APMs also qualify as Advanced APMs.  Advanced APMs require participants to use certified EHR technology, meet participation thresholds, and bear more than a minimal degree of downside financial risk.  In exchange, qualifying providers are eligible for a 5 percent incentive, certain APM-specific rewards, and exemption from the MIPS program.

Examples of Advanced APMs include the risk-bearing levels of the MSSP (Track 1+, Track 2, and Track 3, Basic Level E, and the Enhanced track), as well as approved two-sided risk models for joint replacement, oncology care, and end-stage renal disease (ESRD) management.

How does being in an accountable care organization affect MIPS participation?

The QPP is designed to create an industry-wide scaffold for the advancement of value-based care.  While MIPS is an important starting point for many healthcare providers, CMS also actively encourages providers to take the next steps toward value by participating in Pathways to Success.

Primary care providers who participate in ACOs have the opportunity to earn shared savings on top of existing MIPS incentives due to synergies between the two programs. 

With the right partners and technologies, participants can score highly in MIPS while simplifying their administrative burdens.

For example, in 2018, ACOs partnered with Aledade achieved an average MIPS score of 98, significantly outperforming the national average of 74 in the 2017 performance year, according to CMS data.  

Eighty percent of Aledade-partnered ACOs achieved perfect MIPS scores.  Physicians in all of Aledade’s ACOs received the “exceptional” performance bonus and a payment increase through the QPP.

During 2017, rural practices averaged 63 points in the program, while small practices only received a mean score of 43 points. Aledade works extensively with practices in both categories, supporting their MIPS participation while opening the door to shared savings success within the Medicare Shared Savings Program.

For providers who are ready to embrace downside risk, the benefits can pile up even higher.  Advanced APMs that include downside risk typically offer significantly greater potential for shared savings in addition to the 5 percent MIPS incentive.  This increases the overall availability of positive revenue flow for primary care practices.

Nearly half of Aledade’s 27 Medicare ACOs are shouldering some degree of risk in the Pathways to Success Program, including all of the Aledade ACOs that launched in 2016.

Primary care providers who wish to satisfy their quality reporting requirements while maximizing their opportunities to take advantage of the growing value-based care ecosystem may wish to explore how ACO participation can help.

What is next for the Quality Payment Program?

CMS is continuing to develop the Quality Payment Program to support the wider adoption of value-based care.  In Performance Year 2021, the program will begin to integrate elements of the new MIPS Value Pathways (MVPs), which will bring MIPS and APMs into even closer alignment.

The new iteration of the program will integrate stakeholder feedback to simplify some administrative requirements, make quality reporting more relevant to meaningful aspects of patient care, and prioritize patient-centered care.

Providers who are participating in ACOs may have a head start on many of these areas of focus, making the eventual transition even more seamless.

As lawmakers and regulators continue to stress the importance of value-based care for improving outcomes and controlling costs, primary care providers have numerous opportunities to earn positive payment adjustments, incentives, and shared savings bonuses while delivering high-quality patient care.