MIPS 2026: 75 Points Avoids a 9% Medicare Penalty

The 2026 Merit-based Incentive Payment System (MIPS) performance threshold is 75 points out of 100, unchanged from prior years and now locked in through the 2028 performance period, according to CMS's Calendar Year 2026 Quality Payment Program final rule. A practice that scores below it faces a Medicare Part B payment cut of up to 9.0%, the maximum penalty allowed under the Medicare Access and CHIP Reauthorization Act.

That risk does not fall evenly across practice types. In the most recent measured cycle, 49.0% of solo physicians and 29.0% of small practices scored below the threshold and took a cut, against 14.0% of MIPS-eligible clinicians overall, according to the American Medical Association's analysis of CMS's 2023 MIPS performance year data, which set 2025 payment adjustments for 541,421 eligible clinicians.

What the 75-Point Threshold Requires

CMS finalized the 75-point performance threshold for the 2026 performance year and confirmed it will hold through the CY 2028 performance period and 2030 MIPS payment year, giving practices a fixed target to plan around instead of a moving one. The threshold works on a sliding scale, not a single pass-fail line.

A final score of 18.75 points or below draws the full 9.0% negative adjustment. Scores between 18.76 and 74.99 points draw a smaller negative adjustment, scaled toward zero as the score rises. A score of exactly 75.00 points is neutral: no bonus and no cut. Anything from 75.01 to 100.00 points earns a positive adjustment, though the size of that bonus is scaled each year to keep the program budget-neutral. That scaling is why the maximum possible bonus for a perfect 2023 performance year score was only 2.15%, per AMA, far short of the 9.0% a practice can lose.

Source: CMS, Calendar Year 2026 Quality Payment Program Final Rule Fact Sheet.

Who Actually Misses the Threshold

The penalty rate is not a flat 14.0% across every kind of practice. Solo physicians missed the 75-point threshold at 49.0%, more than double the small-practice rate of 29.0% and nearly triple the rural-practice rate of 18.0%. CMS defines a small practice as one with 15 or fewer clinicians. These figures come from AMA's review of the 2023 performance year data used to set 2025 payment adjustments.

The size of the cut also splits by practice type. Among practices that were penalized at all, 29.0% of solo physicians and 13.0% of small practices drew the full 9.0% maximum rather than a smaller, scaled-down cut, according to the same AMA analysis.

Source: American Medical Association, analysis of CMS 2023 MIPS performance year data.

What a Missed Score Costs in Dollars

The 9.0% ceiling applies to a practice's Medicare Part B allowed charges, not only the visits tied to reported measures. A practice billing $500,000 a year in Medicare Part B allowed charges would forfeit up to $45,000 at the maximum rate. A practice billing $1.5 million would forfeit up to $135,000. Few practices draw the full 9.0% cut, but the AMA figures above show it is not rare among solo and small practices.

Reporting itself carries a cost before any penalty applies. Physicians spent an average of $12,800 and 202 hours a year complying with MIPS, according to a 2021 study cited in AMA's analysis, a fixed cost that lands the same whether the final score clears 75 points or not.

An alternative path exists for practices that qualify. Clinicians who reach Qualifying Participant status in an Advanced Alternative Payment Model skip MIPS scoring entirely and instead earned a 3.5% lump-sum incentive payment in 2025. The number of qualifying APM participants rose to 463,669 in the 2023 performance year, up from 384,105 in 2022, according to AMA.

What Changes for the 2026 Reporting Year

CMS finalized 190 quality measures for the 2026 performance year, five fewer than the 195 available the year before, after adding 5 new measures, removing 10, and substantively revising 30, per the CMS final rule fact sheet.

The MIPS Value Pathways (MVP) reporting option expands to 27 total pathways for 2026, after CMS finalized 6 new specialty-specific MVPs covering diagnostic radiology, interventional radiology, neuropsychology, pathology, podiatry, and vascular surgery, and modified all 21 existing MVPs to align with the updated measure set.

CMS also softened a change that would have hit multispecialty groups hardest. Multispecialty practices with the small-practice designation, 15 or fewer clinicians, can keep registering to report an MVP as a single group rather than splitting into subgroups by specialty, a relief finalized for the 2026 performance period. Separately, CMS set a 2-year informational-only feedback period for any newly added cost measure, so a new cost measure will not count toward a practice's score for its first two years on the books.

Why Traditional MIPS Still Dominates Reporting

The MVP option has existed for several performance years, but adoption remains small next to traditional MIPS. Only 20,484 clinicians reported through an MVP in the 2023 performance year, and just 6,790 of them received a final MVP score, against 541,421 MIPS-eligible clinicians overall, per AMA's analysis.

Average scores by category help explain where practices lose points under either reporting option. The average quality-category score was 75.0% in the 2023 performance year, against an average cost-category score of 61.0%, according to AMA. The cost category ties to total spending and utilization patterns a practice does not fully control, including referrals and post-acute care. That is one reason cost remains the lower of the two scores for most solo and small practices heading into the 2026 reporting year.

Sources

• CMS, "Calendar Year (CY) 2026 Medicare Physician Fee Schedule Final Rule: Quality Payment Program Fact Sheet and Policy Comparison Table"
• American Medical Association, "MIPS penalties once again hit smaller practices hardest," June 16, 2025
• eCQI Resource Center (ONC/CMS), "CMS Publishes 2026 Policy Changes for the Quality Payment Program"