New Bill Replaces Merit-Based Incentive Payment System

Reps. Mariannette Miller-Meeks, MD (R-IA) and Herb Conaway, MD (D-NJ) have introduced the Medicare Physician Data-driven Performance Payment System Act of 2026. This bipartisan bill makes key, targeted reforms to the Merit-based Incentive Payment System (MIPS).

A fact sheet accompanying the bill’s release notes that MIPS has caused disproportionately more penalties on small and rural health care practices, thus justifying the need for a more accurate, fair, and sustainable system.

Under the current MIPS program:

• Roughly 50% of solo clinicians were penalized in 2025
• 29% of small practices and 18% of rural practices were penalized
• Nearly 30% of solo clinicians received the maximum -9% penalty

Key provisions in the Medicare Physician Data-drive Performance Payment System Act of 2026 include:

• Freezing the current MIPS performance threshold at 75 for three years to promote stability in MIPS, as well as mandating GAO to conduct a study, in consultation with national medical specialty societies, to make recommendations to Congress and HHS about an alternative threshold methodology.
• Eliminating the MIPS win-lose “tournament style” payment adjustments (i.e., the +/- 9%) to ensure physicians are no longer subjected to steep penalties.
  • In lieu of penalties, the legislation links physicians’ MIPS performance to a portion of their annual payment update (e.g., either the existing 0.25% under MACRA or the percentage increase in the Medicare Economic Index (MEI)).
• Mandating CMS to provide at least three quarters worth of MIPS feedback reports and Medicare claims data to physicians during a given performance year.
  • Failure to provide these quarterly reports leads to physicians earning higher payments.