Ignoring MIPS Incentives? Here’s Why It’s a Costly Mistake

You wouldn’t throw away a $10,000 check… but many providers do. Every. Single. Year.

Yes, you read that right.

Every year, thousands of healthcare providers unknowingly leave tens of thousands of dollars behind just by overlooking MIPS (Merit-based Incentive Payment System). Sometimes it’s a lack of awareness, sometimes it’s time pressure, or just confusion about the process. Whatever the reason, the financial impact is real, and it’s only getting bigger.

Whether you’re a solo provider, part of a small group, or running a growing practice, this blog is here to help. We’ll break down what MIPS actually is, why skipping it could be hurting your revenue, and how you can start turning it into an advantage.

What Is MIPS, and Why Should You Care?

MIPS is part of the CMS Quality Payment Program (QPP)—a system created to move healthcare from volume-based to value-based payment. It applies to Medicare Part B clinicians and adjusts their payments (positively or negatively) based on four key performance areas:

1. Quality: How well you deliver care
2. Cost: How efficiently you use resources
3. Improvement Activities: Involvement in activities that improve care
4. Promoting Interoperability: Use of certified EHR technology

Your performance in these four categories adds up to a final MIPS score, which directly impacts your Medicare reimbursements. Depending on how you perform, that could mean up to a 9% bonus or penalty on your payments, which is why many providers turn to professional MIPS consulting services to maximize their scores and avoid costly penalties.

But here’s where it starts to get tricky.

The Financial Hit of Ignoring MIPS

Let’s say your practice bills $400,000 in Medicare claims annually.

If you choose not to participate or fall below the performance threshold, CMS could dock you up to 9%, resulting in a $36,000 loss in reimbursements.

On the flip side, clinicians with strong performance in 2023 could receive a 3.71% bonus in 2025 payments. That’s an extra $14,840 for simply engaging with a program you’re already eligible for.

And this isn't a theory. It’s happening every year.

Real Case Study: The Numbers Don’t Lie

A report by the American Medical Association (AMA) and data from CMS show just how costly it can be:

• In the most recent MIPS cycle, 308,000 clinicians were penalized for not meeting the MIPS performance threshold
• 75,000 clinicians received a 3% to 9% penalty
• 45% of solo practitioners and 31% of small practices were hit with payment cuts

Meanwhile, most large practices either received bonuses or avoided penalties altogether.

The data reveals a harsh reality: smaller practices are more vulnerable if they skip or underperform in MIPS.

And it gets worse, CMS updates indicate that 49% of solo providers may be penalized in upcoming cycles, while only 14% of clinicians overall face that risk.

Why Are So Many Providers Still Skipping MIPS?

The reasons are understandable, even if the outcome isn’t:

• Overwhelming process: The program can seem complicated and time-consuming
• Poor communication: Many eligible providers don’t realize they have to report
• Delayed feedback: CMS often provides performance feedback a year later, making real-time improvements difficult
• Misalignment: Some feel the metrics don’t reflect actual clinical care

But regardless of the reason, the penalty still applies.

The Reward for Participation

Instead of thinking of MIPS as a burden, consider it a strategic business move:

• Avoid financial penalties
• Unlock bonus payments
• Build a foundation for value-based care contracts
• Track and improve clinical quality over time

Many providers who start with basic engagement by choosing just a few relevant quality measures and submitting minimal data avoid penalties entirely and earn neutral or positive adjustments.

With growing digital requirements in MIPS, providers must also ensure their EHR systems are not only certified but securely integrated with CMS portals for accurate submissions and compliance.

And those who go further? They’re reinvesting bonuses into EHR upgrades, new staff, or expanding patient services.

A Tale of Two Providers: Dr. Patel vs. Dr. Lopez

Meet Dr. Patel, a family medicine physician in a suburban group. She delegated MIPS reporting to her billing team, tracked progress quarterly, and ended the year with a MIPS score of 82. That earned her a 3.5% bonus, enough to fund a new care coordinator role.

Then there’s Dr. Lopez, a solo internist in a rural town. She assumed MIPS didn’t apply to small practices and didn’t report. Her 2025 payments came in with a 7% penalty, cutting nearly $25,000 from her expected revenue. As a result, she had to pause plans to hire a nurse.

Same clinical care. Totally different outcomes, all based on engagement with MIPS.

Easy Ways To Get Started

Here’s how to start engaging with MIPS without the stress:

1. Identify your eligibility: Use CMS tools or speak with a billing partner to confirm.
2. Choose measures that align with your workflow: Focus on quality activities you already track.
3. Use reporting tools or consult a partner: Automating submission reduces errors and saves time. Many practices also turn to MIPS consulting services to ensure their submissions are accurate, timely, and optimized for performance scoring.
4. Monitor progress quarterly: Don’t wait until the last minute to evaluate your score.

Even small steps can shield you from major financial loss.