Your 2026 performance determines your 2028 pay
MIPS (Merit-based Incentive Payment System) works on a two-year lag. How you perform in 2026 determines whether your Medicare payments go up, down, or stay flat in 2028.
Score above the performance threshold (75 points for 2026) and you get a positive payment adjustment. Score below it and Medicare reduces your payments. The maximum negative adjustment is -9%. Positive adjustments are budget-neutral, meaning CMS redistributes penalties collected from low performers to high performers. In practice, positive adjustments have typically been in the 1-2% range after scaling, though avoiding the -9% penalty is where the real financial impact lies.
On a practice collecting $800K per year from Medicare, a negative 9% adjustment is a $72K pay cut. Avoiding that penalty is the primary financial goal. The positive adjustment adds a smaller but meaningful bonus on top.
Most practice owners treat MIPS as a compliance chore. Fill out the forms, submit the data, hope for the best. That is how you end up with a mediocre score and a penalty.
Treating MIPS as a financial strategy, choosing the right measures, tracking them all year, and optimizing your reporting, is how you protect your payments and potentially earn a positive adjustment.
The four MIPS categories
MIPS scores are based on four categories, each weighted differently for 2026.
Quality (30% of total score)
You report on six quality measures. At least one must be an outcome measure or a high-priority measure if an outcome measure is not available for your specialty.
The key to scoring well here is measure selection. Not all measures are equal. Some have low benchmarks (meaning the average performer scores well), and some have high benchmarks (meaning you need near-perfect performance to score above the median).
Choose measures where your practice already performs well. If your diabetes management is strong, report on HbA1c control. If your preventive care screening rates are high, report on screening measures. Do not pick measures where you know your performance is weak and hope to fix it mid-year. Pick your strengths and report on those.
Data completeness matters too. You must report on at least 75% of eligible patients for each measure. Reporting on fewer patients reduces your score even if the patients you do report on show good performance. This is where many practices lose points: they report the measure but only capture data on 60% of eligible encounters.
Cost (30% of total score)
CMS calculates your cost score automatically using Medicare claims data. You do not submit anything for this category. CMS attributes patients to your practice based on claims and measures the total cost of care for those patients.
You cannot directly control your cost score the way you control quality measures, but you can influence it. Practices that refer appropriately, avoid unnecessary imaging, reduce ER utilization, and manage chronic conditions well tend to score better on cost.
The main thing to watch out for is attributed patients you do not know about. CMS attributes patients based on plurality of primary care services. If patients are being attributed to your practice who you do not actively manage, their costs count against you. Review your attribution list if your Medicare Administrative Contractor provides one, and make sure the patients on it are ones you actually manage.
Promoting Interoperability (25% of total score)
This is the EHR category. You need to demonstrate meaningful use of certified EHR technology across several measures:
- e-Prescribing. Percentage of prescriptions sent electronically. Target: above 70%.
- Health Information Exchange. Sending and receiving care summaries for transitions of care and referrals.
- Provider to Patient Exchange. Percentage of patients with timely access to their health information through a patient portal. Target: above 40%.
- Public Health and Clinical Data Exchange. Reporting to immunization registries, cancer registries, or public health agencies as applicable.
- Security Risk Analysis. You must conduct and document an annual security risk analysis of your EHR system. This is a yes/no requirement. Skip it and you get zero points for the entire PI category.
The security risk analysis is where practices most commonly lose all their PI points. It is not difficult: document that you reviewed your EHR's security controls, identified risks, and took steps to mitigate them. Use the ONC Security Risk Assessment Tool if you do not have another method. But it must be documented, and it must be completed in the performance year.
If your EHR is not certified or you have a hardship exemption, you can apply for a PI category exemption. The weight gets redistributed to other categories.
Improvement Activities (15% of total score)
You need to attest to performing improvement activities during the performance year. Starting in 2025, CMS removed the high/medium weight distinction. All improvement activities are now worth 20 points each, and you need 40 points total. That means two activities.
Common improvement activities that most practices can easily attest to:
- Care coordination agreements with other providers
- Implementation of condition-specific chronic disease management programs
- Collection of patient experience data using standardized surveys
- Participation in a Qualified Clinical Data Registry
- Use of shared decision-making tools
- Regular assessment of patient health status
The key is documentation. You need to be able to prove you performed these activities for at least 90 continuous days during the performance year. "We do that already" is not enough. Document when you started, what you did, and keep records. A simple folder with dated evidence (policies, meeting notes, survey results, care plans) is sufficient.
MIPS Value Pathways (MVPs) for 2026
MVPs are an alternative to traditional MIPS reporting. Instead of selecting individual measures across all four categories, you choose a pre-built pathway that bundles quality measures, improvement activities, and cost measures around a clinical theme.
For 2026, available MVPs include pathways for chronic disease management, musculoskeletal care, mental health, and several others. The advantage is simplification: fewer choices, more relevant measures for your specialty, and the quality measures are curated to go together.
The disadvantage is less flexibility. In traditional MIPS, you can cherry-pick your strongest measures across any category. With an MVP, you are locked into the pathway's measure set, which might include measures where your performance is average.
Whether to choose an MVP or traditional MIPS depends on your specialty and your performance data. If an MVP aligns perfectly with your practice and your performance on its measures is strong, go for it. If you score better by picking individual measures in traditional MIPS, stick with that.
We run the numbers both ways for our clients and recommend whichever approach produces the higher score.
What to track starting now
If you are reading this in the first half of 2026, you still have time to optimize your MIPS performance. Here is the checklist.
Quality measures:
- Select six quality measures (at least one outcome or high-priority)
- Verify your EHR can capture and report data for each selected measure
- Confirm data completeness is tracking at or above the 75% threshold for each measure (required per 42 CFR § 414.1340 through the CY 2028 performance period)
- Review measure benchmarks to make sure you picked measures where your performance is competitive
- Run a mid-year performance check (July-August) to see if any measures need attention
Cost:
- Review your Medicare patient attribution list if available
- Identify any attributed patients you do not actively manage
- Review referral patterns and imaging orders for appropriateness
Promoting Interoperability:
- Complete and document the annual security risk analysis (do not wait until December)
- Verify e-prescribing rate is above 70%
- Confirm patient portal access and usage metrics
- Document health information exchange activity (care summaries sent/received)
- Verify reporting to applicable public health registries
Improvement Activities:
- Select activities totaling at least 40 points
- Document the start date for each activity
- Create a folder with evidence for each activity (policies, meeting notes, survey data)
- Ensure activities are performed for at least 90 continuous days
Deadlines
Performance year: January 1 - December 31, 2026.
Submission window: January 2 - March 31, 2027. Data must be submitted to CMS through a qualified registry, a qualified clinical data registry (QCDR), or a health information exchange.
Payment adjustment applied: Calendar year 2028 Medicare payments.
Do not wait until March 2027 to realize you did not track quality measures all year. By then, your data is locked and your score is whatever it is. The time to influence your MIPS score is during the performance year, not during the submission window.
Common mistakes
Choosing the wrong quality measures. Practices pick measures that sound relevant without checking the benchmarks. A measure where the national average is already 95% means you need near-perfect performance to score above the median. Pick measures where your practice's natural performance puts you in the top quartile.
Not tracking quality measures all year. The most common and most costly mistake. Practices select their measures in January, forget about them, and discover in November that data completeness is at 45% because nobody configured the EHR templates correctly. By then, it is too late to fix.
Skipping the security risk analysis. This is a required measure in the PI category. Skip it and your entire PI score (25% of your total MIPS score) drops to zero. It takes a few hours to complete. There is no excuse for losing 25% of your MIPS score over paperwork.
Failing to document improvement activities. Attestation without documentation is risky. CMS can audit your MIPS submission and request evidence. If you cannot produce documentation, the points get removed and your score drops. Keep the evidence organized throughout the year, not assembled retroactively when the auditor calls.
Ignoring cost category. Because CMS calculates cost automatically, many practices think they have no control over it. That is partially true, but reviewing your attributed patients and referral patterns can identify issues. If patients are being attributed to you who belong to another provider, your cost score is being penalized for care you did not direct.
Reporting through the wrong mechanism. Small practices sometimes try to submit data through a method their EHR does not support, leading to rejected submissions. Confirm your submission method (registry, QCDR, direct) well before the March deadline and do a test submission if possible.
The financial impact is real
I want to put specific numbers on this because MIPS is often treated as an annoyance rather than a financial lever.
A solo provider billing $300K per year to Medicare with a -5% MIPS penalty loses $15K. With a positive adjustment (historically around 1-2% after budget-neutral scaling), they gain $3K-$6K. That is an $18K-$21K swing for one provider.
A five-provider practice billing $1.2M per year to Medicare with a -7% penalty loses $84K. With a positive adjustment, the upside is smaller but real. The primary value of MIPS optimization is penalty avoidance.
At those numbers, spending 10-20 hours per year on MIPS optimization (measure selection, data completeness tracking, documentation) has an ROI that is hard to beat.
If your practice reports to MIPS and you are not sure where you stand for 2026, schedule a free assessment. We will review your current measure selection, check your data completeness, and identify where you are leaving points on the table.
