MIPS and MACRA Explained: Key Differences, Requirements, and Updates

MACRA Overview

MACRA is the 2015 Medicare law that repealed the Sustainable Growth Rate (SGR) and created the Quality Payment Program (QPP). Under the QPP, most clinicians either participate in the Merit-based Incentive Payment System (MIPS) or qualify through Advanced Alternative Payment Models (APMs). MACRA ties Medicare Part B payments more closely to quality, cost, and the use of Certified EHR Technology while encouraging accountable, coordinated care. ([law.cornell.edu](https://www.law.cornell.edu/uscode/text/42/1395w-4?utm_source=openai))

MIPS remains the default pathway for most clinicians, producing a final score—often called the Composite Performance Score in MACRA’s statute—based on four performance categories. Advanced APM participants who meet “Qualifying APM Participant” (QP) thresholds are exempt from MIPS and earn separate incentives. ([law.cornell.edu](https://www.law.cornell.edu/uscode/text/42/1395w-4?utm_source=openai))

QPP Pathways

Traditional MIPS

Traditional MIPS lets you select measures and activities across Quality, Cost, Improvement Activities, and Promoting Interoperability. Your performance is compared to a Performance Threshold to determine a positive, neutral, or negative payment adjustment two years later (for example, performance in calendar year 2026 affects 2028 payments). ([jdsupra.com](https://www.jdsupra.com/legalnews/digesting-a-giant-reg-the-cy-2026-9060859/?utm_source=openai))

MIPS Value Pathways (MVPs)

MVPs streamline reporting around condition- or specialty-focused measure sets while keeping the four-category MIPS framework. For the 2026 performance year, CMS finalized six new MVPs and modified all existing MVPs, continuing a gradual shift toward more clinically coherent reporting. ([ecqi.healthit.gov](https://ecqi.healthit.gov/index.php/cms-publishes-2026-policy-changes-quality-payment-program?utm_source=openai))

APM Performance Pathway (APP) and APP Plus

Clinicians in certain APMs (for example, MSSP ACOs) can use the APP or the newer APP Plus measure set that aligns with CMS’s Universal Foundation. APP Plus is required for MSSP ACOs and optional for other eligible participants, improving consistency and reducing duplicative reporting. ([aafp.org](https://www.aafp.org/pubs/fpm/issues/2025/0100/2025-coding-payment-update.html?utm_source=openai))

Advanced APMs

Advanced APMs must use Certified EHR Technology, base payment on quality measures comparable to MIPS, and take on more-than-nominal financial risk (or be an expanded Medical Home Model). Clinicians who meet QP thresholds via these Alternative Payment Models are excluded from MIPS adjustments for that year. ([aafp.org](https://www.aafp.org/family-physician/practice-and-career/getting-paid/aapms/faq.html?utm_source=openai))

MIPS Performance Categories

For the 2026 performance year, MIPS category weights remain unchanged: Quality 30%, Cost 30%, Improvement Activities 15%, and Promoting Interoperability 25%. Cost is calculated from claims; Promoting Interoperability requires Certified EHR Technology; and Quality and Improvement Activities depend on the measures/activities you select. ([college.acaai.org](https://college.acaai.org/2026-mips-final-policies/?utm_source=openai))

Quality

• Report a focused set of quality measures (eCQMs, MIPS CQMs, QCDR, or claims where applicable) with at least 75% data completeness for the performance period. ([auanet.org](https://www.auanet.org/advocacy/get-involved/comment-letters-and-resources/physician-payment-and-coverage-issues/final-rule-cy-2024-medicare-physician-fee-schedule-summary?utm_source=openai))
• CMS maintains roughly 190 total quality measures for 2026, with targeted additions, removals, and updates. ([hklaw.com](https://www.hklaw.com/en/insights/publications/2025/11/cms-releases-cy-2026-medicare-physician-fee-schedule-final-rule?utm_source=openai))

Cost

• Assessed automatically by CMS using episode- and population-based Cost Measures—no separate submission required. ([facs.org](https://www.facs.org/advocacy/quality-payment-program-resource-center/2025-macra-quality-payment-program/mips/?utm_source=openai))

Improvement Activities

• Attest to completed activities (e.g., care coordination or patient safety). Small, rural, HPSA, and non–patient-facing practices may have tailored requirements under policy. ([facs.org](https://www.facs.org/advocacy/quality-payment-program-resource-center/2025-macra-quality-payment-program/mips/?utm_source=openai))

Promoting Interoperability

• Use Certified EHR Technology to exchange health information and meet required objectives during a 90-day (or longer) period; performance-based scoring applies. ([auanet.org](https://www.auanet.org/advocacy/get-involved/comment-letters-and-resources/physician-payment-and-coverage-issues/final-rule-cy-2024-medicare-physician-fee-schedule-summary?utm_source=openai))

MIPS Scoring and Payment Adjustments

Your final MIPS score (Composite Performance Score) is the weighted sum of category scores, potentially including a small complex patient bonus. CMS compares that score to the Performance Threshold to determine the payment adjustment. By statute, the maximum negative adjustment is –9%, and positive adjustments are budget neutral and scaled. Adjustments apply two years after the performance year (e.g., 2026 performance impacts 2028 payments). ([law.cornell.edu](https://www.law.cornell.edu/cfr/text/42/414.1380?utm_source=openai))

CMS has finalized the Performance Threshold at 75 points for the 2026, 2027, and 2028 performance years, supporting stable planning and benchmarking across the period. Category weights remain 30/30/15/25. ([ascrs.org](https://www.ascrs.org/news/ascrs-news/2026-medicare-physician-fee-schedule-final-rule-released?utm_source=openai))

Advanced APMs Incentives

Clinicians who achieve QP status through Advanced APMs are excluded from MIPS for that year and receive separate incentives. For the 2026 payment year (based on 2024 participation), Congress extended the APM incentive at 1.88% in the Consolidated Appropriations Act, 2024; absent new legislation, this lump-sum incentive ends after 2026. ([congress.gov](https://www.congress.gov/crs-product/R48075?utm_source=openai))

Beginning January 1, 2026, CMS applies two separate Medicare PFS conversion factors: QPs receive a higher statutory update (+0.75%) than non-QPs (+0.25%), in addition to other finalized adjustments for 2026. This differential continues prospectively under MACRA. ([cms.gov](https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-final-rule-cms-1832-f?utm_source=openai))

QP thresholds under the Medicare Option are 50% of Part B payments or 35% of patients for the 2026 payment year (based on 2024 performance). Under current regulation, those thresholds rise to 75% of payments or 50% of patients for 2027 and later payment years (based on 2025+ performance). ([law.cornell.edu](https://www.law.cornell.edu/cfr/text/42/414.1430?utm_source=openai))

2026-2028 MIPS Stability Period

• Performance Threshold fixed at 75 points for the 2026–2028 performance years to promote predictability. ([ascrs.org](https://www.ascrs.org/news/ascrs-news/2026-medicare-physician-fee-schedule-final-rule-released?utm_source=openai))
• Category weights remain Quality 30%, Cost 30%, Improvement Activities 15%, Promoting Interoperability 25%. ([college.acaai.org](https://college.acaai.org/2026-mips-final-policies/?utm_source=openai))
• Data completeness for Quality stays at 75% through the 2028 performance year, and the measure set is refined (about 190 measures in 2026). ([ascrs.org](https://www.ascrs.org/news/ascrs-news/2026-medicare-physician-fee-schedule-final-rule-released?utm_source=openai))
• CMS continues expanding MVPs while signaling an eventual move away from Traditional MIPS (with some stakeholders citing 2029 as a potential sunset discussion point, not yet finalized). ([ascrs.org](https://www.ascrs.org/news/ascrs-news/2026-medicare-physician-fee-schedule-final-rule-released?utm_source=openai))

MIPS Reporting Requirements

1) Confirm eligibility and choose your reporting path

• Use the QPP Participation Lookup to verify eligibility and special statuses. The low-volume threshold generally requires, in each determination segment, more than $90,000 in Part B allowed charges, more than 200 Part B beneficiaries, and more than 200 covered services. ([acponline.org](https://www.acponline.org/practice-career/business-resources/payment/medicare-payment-and-regulations-resources/macra-and-the-quality-payment-program/merit-based-incentive-payment-system-mips?utm_source=openai))
• Select Traditional MIPS or a relevant MVP; APM participants may use APP/APP Plus where applicable. ([aafp.org](https://www.aafp.org/pubs/fpm/issues/2025/0100/2025-coding-payment-update.html?utm_source=openai))

2) Build your measurement plan

• Quality: Pick clinically meaningful measures (include an outcome or high-priority measure where required) and meet 75% data completeness across the performance period. ([auanet.org](https://www.auanet.org/advocacy/get-involved/comment-letters-and-resources/physician-payment-and-coverage-issues/final-rule-cy-2024-medicare-physician-fee-schedule-summary?utm_source=openai))
• Cost: Understand which Cost Measures are likely to attribute to your practice; CMS calculates these from claims. ([facs.org](https://www.facs.org/advocacy/quality-payment-program-resource-center/2025-macra-quality-payment-program/mips/?utm_source=openai))
• Improvement Activities: Complete and attest to activities for the required duration (often 90 days), with special-status flexibilities where applicable. ([facs.org](https://www.facs.org/advocacy/quality-payment-program-resource-center/2025-macra-quality-payment-program/mips/?utm_source=openai))
• Promoting Interoperability: Use Certified EHR Technology and meet required objectives during at least a continuous 90-day window. ([auanet.org](https://www.auanet.org/advocacy/get-involved/comment-letters-and-resources/physician-payment-and-coverage-issues/final-rule-cy-2024-medicare-physician-fee-schedule-summary?utm_source=openai))

3) Submit, validate, and retain records

• Submission windows typically open after the performance year and close in the first quarter of the following year (e.g., early 2027 for 2026 data). Keep source documentation to support audits and feedback cycles.
• Remember the two-year lag: your 2026 results drive 2028 MIPS payment adjustments. ([jdsupra.com](https://www.jdsupra.com/legalnews/digesting-a-giant-reg-the-cy-2026-9060859/?utm_source=openai))

Bottom line: MACRA’s Quality Payment Program links Medicare payments to quality, cost, and interoperability. From 2026 through 2028, MIPS rules are intentionally steady—75-point Performance Threshold, 30/30/15/25 weights—while CMS broadens MVP options and Advanced APM incentives shift to conversion-factor updates and, for 2026 only, a reduced lump-sum bonus. Focusing on measure selection, CEHRT-enabled workflows, and Cost Measures you can influence will put you in the best position to meet the Performance Threshold and protect revenue. ([college.acaai.org](https://college.acaai.org/2026-mips-final-policies/?utm_source=openai))

FAQs

What is the difference between MIPS and MACRA?

MACRA is the law that created the Quality Payment Program. MIPS is one of the QPP pathways that scores you across Quality, Cost, Improvement Activities, and Promoting Interoperability to produce a Composite Performance Score used for payment adjustments. Advanced APM participants who meet QP thresholds are exempt from MIPS and follow a different incentive structure. ([law.cornell.edu](https://www.law.cornell.edu/uscode/text/42/1395w-4?utm_source=openai))

How are MIPS scores calculated?

Your final score (Composite Performance Score) is a weighted blend of the four MIPS categories—Quality 30%, Cost 30%, Improvement Activities 15%, Promoting Interoperability 25%—with potential small bonuses. CMS compares the score to the Performance Threshold (75 points for 2026–2028). Scores below the threshold receive up to a –9% adjustment; scores above it receive scaled positive adjustments, applied two years later. ([law.cornell.edu](https://www.law.cornell.edu/cfr/text/42/414.1380?utm_source=openai))

What are the reporting requirements for MIPS?

Confirm QPP eligibility; choose Traditional MIPS or an MVP; report Quality with 75% data completeness, attest to Improvement Activities, and meet Promoting Interoperability using Certified EHR Technology; Cost is calculated by CMS. Submit during the post–performance year window (typically Q1 of the following year), and keep documentation for validation. ([auanet.org](https://www.auanet.org/advocacy/get-involved/comment-letters-and-resources/physician-payment-and-coverage-issues/final-rule-cy-2024-medicare-physician-fee-schedule-summary?utm_source=openai))

How will MACRA impact Medicare payments?

Under MIPS, performance in a given calendar year affects Medicare payments two years later via budget-neutral adjustments (up to –9% negative by statute). Under the Advanced APM track, QPs are excluded from MIPS and, for the 2026 payment year only, receive a 1.88% lump-sum incentive; starting in 2026, QPs also receive a higher PFS conversion-factor update (+0.75%) than non-QPs (+0.25%). ([law.cornell.edu](https://www.law.cornell.edu/cfr/text/42/414.1405?utm_source=openai))