Merit-Based Incentive Payment System: longitudinal performance and uneven rewards for safety-net providers over 5 years

TL;DR

A study found that safety-net providers performed better under Medicare's payment system but received smaller financial rewards due to the system's structure.

Contribution

The study reveals that safety-net providers outperformed others in payment adjustments but faced inequities due to the payment system's design.

Findings

Safety-net specialists were 31% more likely to receive positive payment adjustments than non-safety-net specialists.

MIPS financial incentives ranged from $300 to $4000 over 5 years, much lower than estimated compliance costs.

The percentage-based adjustment structure disadvantages clinicians with smaller billing volumes.

Abstract

Medicare Merit-based Incentive Payment System (MIPS), established by Centers for Medicare & Medicaid Services to transition Medicare reimbursement toward value-based care, has faced criticism for its administrative complexity and potential inequities affecting safety-net providers (SNPs).

This study analyzed 5-year data (2018-2022) to evaluate the performance and financial outcomes of clinicians consistently participating in MIPS, focusing on disparities between SNPs and non-SNPs.

We found that safety-net specialists were 31% more likely than non–safety-net specialists to consistently receive positive payment adjustments and earned modestly higher average adjustment rates (0.35% points). However, despite this superior performance, safety-net specialists did not achieve greater cumulative financial rewards due to MIPS's percentage-based adjustment structure, which disadvantages clinicians with smaller billing volumes. Our analysis also showed that MIPS financial incentives were generally modest—ranging from $300 to $4000 over 5 years—far below the estimated $12 000 in annual administrative compliance costs per physician reported in prior research.

To address these disparities and inefficiencies, policymakers should consider alternative models such as the American Medical Association's proposed Data-Driven Performance Payment System, which reduces administrative burden by simplifying the reporting process and ensures fairer financial rewards by uncoupling incentive payments from billing volume—thereby improving equity for safety-net clinicians.

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