MACRA and MIPS: How Medicare Tied Payment to EHR Use

The federal government’s push to link EHR use to payment did not end when the Meaningful Use incentive program wound down. It changed shape. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) replaced the old fee-for-service payment update formula with a new framework that folds certified EHR use directly into how much Medicare pays eligible clinicians for their ongoing work — not as a separate bonus program, but as one of four weighted categories inside a single composite performance score.

Understanding how MACRA’s Quality Payment Program actually works, why the Merit-based Incentive Payment System (MIPS) became the default path for most clinicians, and how the Promoting Interoperability performance category specifically ties EHR use to payment adjustments is essential for any health IT or health-system leader responsible for either the technology side or the reimbursement side of that equation — because under MACRA, those two things are now the same conversation.

What problem was MACRA actually built to solve?

Before MACRA, Medicare physician payment updates were governed by the Sustainable Growth Rate (SGR) formula, a 1997 mechanism intended to tie physician payment growth to overall economic growth. In practice, SGR produced a recurring crisis: the formula’s own math called for steep payment cuts nearly every year, and Congress passed a “doc fix” patch to override the cut almost annually for over a decade, creating enormous uncertainty for physician practices about what Medicare would actually pay from one year to the next.

MACRA, passed with strong bipartisan support in 2015, permanently repealed the SGR formula and replaced it with a new framework built around performance-based payment adjustments: the Quality Payment Program (QPP). Rather than a single blanket payment update, QPP gives eligible clinicians two tracks — the Merit-based Incentive Payment System (MIPS), a performance-scoring track most clinicians default into, and Advanced Alternative Payment Models (Advanced APMs), a smaller track for practices participating in qualifying value-based payment arrangements that carry more financial risk in exchange for exemption from MIPS reporting.¹

How does MIPS actually calculate a clinician’s payment adjustment?

MIPS combines performance across four weighted categories into a single composite score, which then determines a positive, neutral, or negative payment adjustment applied to the clinician’s Medicare Part B payments in a future year (adjustments apply with a roughly two-year lag from the performance year being measured). The four categories, with weights that have shifted somewhat since the program’s 2017 launch:

• Quality — clinical quality measures similar in spirit to the earlier Physician Quality Reporting System, typically the largest-weighted category
• Promoting Interoperability — certified EHR technology use, directly inheriting much of the structure of the earlier Meaningful Use program (see below)
• Improvement Activities — attestation to activities related to care coordination, patient engagement, and patient safety
• Cost — Medicare claims-based measures of resource use, calculated by CMS from claims data rather than clinician-reported data

A clinician’s composite score is compared against a performance threshold CMS sets each program year, and clinicians scoring above or below that threshold receive a positive or negative payment adjustment, respectively, applied on a sliding scale — meaning MIPS is explicitly budget-neutral by design, with higher performers’ bonuses substantially funded by lower performers’ penalties rather than by new federal spending.

How does Promoting Interoperability specifically tie EHR use to payment?

The Promoting Interoperability performance category is MACRA’s direct successor to the Meaningful Use EHR incentive program, folded into MIPS’s composite scoring rather than administered as a standalone incentive. Clinicians must use certified EHR technology and report on measures across several objectives to earn points in this category, commonly including:

• e-Prescribing — the percentage of permissible prescriptions transmitted electronically through the certified EHR
• Health Information Exchange — measures related to sending, receiving, and reconciling patient information electronically with other providers, which has evolved over successive program years to require more substantive interoperability rather than simple message transmission
• Provider-to-Patient Exchange — patient access measures, including providing patients electronic access to their health information through patient portals or, more recently, certified APIs
• Public Health and Clinical Data Exchange — reporting to public health registries and immunization information systems

A clinician who fails to meet basic Promoting Interoperability reporting requirements — for instance, by not using certified EHR technology capable of the required measures at all — can receive a score of zero in this category, which meaningfully drags down the overall composite score even if quality and cost performance are strong, illustrating how directly EHR technology adoption and reporting behavior are now embedded in Medicare payment math rather than sitting alongside it as a separate program.

Who actually has to participate in MIPS, and who is exempt?

Not every Medicare-billing clinician is subject to MIPS. CMS sets a low-volume threshold based on Medicare Part B allowed charges, number of Medicare patients, and (in more recent program years) number of covered professional services — clinicians falling below these thresholds are excluded from MIPS entirely, which in practice exempts a substantial share of small and low-Medicare-volume practices from the program’s reporting burden. Clinicians participating sufficiently in a qualifying Advanced Alternative Payment Model are also exempt from MIPS reporting, since Advanced APM participation carries its own separate incentive structure tied to the value-based arrangement itself rather than to MIPS scoring.

For clinicians who are subject to MIPS, participation can occur as an individual, as part of a group practice (aggregating performance across the group’s clinicians), or, for some specialties and arrangements, through APM entity-level reporting — the choice of reporting unit can meaningfully affect a clinician’s or practice’s composite score depending on how performance varies across individuals within the group.

How has MIPS evolved since its 2017 launch?

CMS has adjusted category weights, measure sets, and reporting requirements in nearly every program year since MIPS began, reflecting both stakeholder feedback and CMS’s own evolving priorities — the relative weight given to Cost, for example, was phased in gradually rather than applied at full weight from the program’s first year, giving clinicians and practices time to build the reporting and workflow infrastructure the category requires. CMS has also introduced MIPS Value Pathways (MVPs) as an alternative, more streamlined reporting framework organized around specialty-specific or condition-specific measure sets, intended to reduce the reporting burden of tracking measures across four largely separate categories.

For health IT leaders, the practical implication of this ongoing evolution is that Promoting Interoperability measure requirements are not static — a certified EHR configuration and reporting workflow that satisfied the category’s requirements in one program year may need adjustment in a subsequent year as CMS updates specific measures, thresholds, or the underlying certification criteria clinicians’ EHR technology must meet. Tracking the current program year’s specific requirements directly against CMS’s own QPP resources, rather than relying on a prior year’s configuration, remains a standing operational task for any organization managing MIPS reporting.

Related reading

• From Meaningful Use to Promoting Interoperability
• The Information Blocking Rule: What It Requires and Who It Affects

Frequently Asked Questions

What did MACRA actually replace?

MACRA permanently repealed the Sustainable Growth Rate (SGR) formula, a 1997 Medicare physician payment mechanism that repeatedly called for steep payment cuts Congress had to override almost annually through “doc fix” legislation. MACRA replaced it with the Quality Payment Program, built around MIPS and Advanced APMs.

What are the four MIPS performance categories?

Quality, Promoting Interoperability, Improvement Activities, and Cost. These combine into a single composite score compared against a CMS-set performance threshold each program year, determining a positive, neutral, or negative Medicare payment adjustment.

How does the Promoting Interoperability category relate to Meaningful Use?

Promoting Interoperability is MACRA’s direct successor to the Meaningful Use EHR incentive program, folded into MIPS’s composite scoring rather than run as its own separate incentive. It requires certified EHR use and reporting on measures including e-prescribing, health information exchange, and patient portal access.

Is every Medicare-billing clinician required to participate in MIPS?

No. CMS sets low-volume thresholds based on Medicare billing and patient volume that exempt smaller and lower-Medicare-volume practices entirely, and clinicians participating sufficiently in a qualifying Advanced Alternative Payment Model are also exempt from MIPS reporting.

Is MIPS budget-neutral?

Yes, by design. MIPS payment adjustments are structured so that positive adjustments for higher performers are substantially funded by negative adjustments applied to lower performers, rather than by new federal spending — a key structural difference from the earlier Meaningful Use incentive payments.

This article is intended for general informational purposes for health IT and health-policy professionals and does not constitute legal, financial, or regulatory advice. Current-year MIPS requirements and thresholds should be confirmed directly against CMS’s Quality Payment Program resources.