Physicians at smaller, rural practices were disproportionately penalized by CMS’ Merit-based Incentive Payment System in 2025, according to a June 13 report by the American Medical Association.
A large majority, 86%, of MIPS-eligible physicians avoided penalties in 2025, based on their 2023 data, according to results shared with the AMA as a part of the Medicare Quality Payment Program.
But three practice types were overrepresented by the 14% of MIPS-eligible physicians who received a penalty of up to negative 9% of their Medicare-paid amount of covered services. Almost half — 49% — of solo physicians were penalized, followed by 29% of small practices and 18% of rural practices.
Among the penalized practiced types, 13% of small practices and 29% of solo practices received the maximum negative 9% MIPS penalty.
The administrative burden and complexity of MIPS hits these practices particularly hard, according to the AMA.
“Despite being implemented in 2017, MIPS has yet to demonstrate better health outcomes for Americans or lower avoidable spending,” the AMA said in a February letter to CMS.
“The program imposes steep compliance costs on physicians,” the letter continues, citing a 2021 JAMA Health Forum study that found “physicians spent $12,800 and 202 hours per year to comply with MIPS.”
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