A MIPS penalty can cut up to 9% from your Medicare Part B payments. For a busy practice, that is real money lost for work you already did. The good news is that most penalties are avoidable. They usually come from missed deadlines, weak measure choices, or gaps in Promoting Interoperability, not from bad patient care.
This guide explains how MIPS 2026 works, where practices lose points, and the exact steps that help you stay above the line. If you want a broader view of the program, you can also read our guide on how to score better in MIPS 2026.
What Is a MIPS Penalty and When Does It Apply?
The Merit-based Incentive Payment System (MIPS) is the Medicare program that adjusts your payments based on the quality and value of your care. The Centers for Medicare and Medicaid Services (CMS) gives each eligible clinician a final score from 0 to 100. That score is compared with the performance threshold.
For the 2026 performance year, CMS kept the threshold at 75 points. It plans to hold it there through the 2028 performance year. If you score below 75, you receive a negative payment adjustment of up to 9%. If you score exactly 75, your payments stay the same. If you score above 75, you may earn a positive adjustment.
Timing matters here. Your 2026 performance sets your 2028 Medicare payments. A mistake made this year shows up on your claims two years from now, which is why early action pays off.
CMS estimates that the median final score for 2026 will be about 89, and that roughly 12% of eligible clinicians will land below the threshold. In other words, most practices pass. The ones that fail tend to skip steps they could have handled.
MIPS Categories and Weight They Carry in 2026
MIPS scores clinicians in four performance categories. Each one carries a weight that adds up to 100 points.
| Category | 2026 Weight | What It Measures |
| Quality | 30% | Clinical care outcomes and process measures |
| Cost | 30% | Medicare spending, calculated by CMS from claims |
| Improvement Activities | 15% | Care coordination, patient access, and safety work |
| Promoting Interoperability | 25% | Use of certified EHR technology and data security |
Two more details are worth knowing. The data completeness threshold stays at 75%, which means you must report on at least 75% of eligible patients for each quality measure. Also, small practices with 15 or fewer clinicians receive automatic reweighting of Promoting Interoperability. If they do not submit that category, its weight moves to Quality and Improvement Activities.
Step 1: Confirm You Are Eligible
You must take part in MIPS if you bill Medicare Part B and are a covered clinician type. You also need to exceed all three parts of the low-volume threshold. That means more than $90,000 in Medicare Part B allowed charges, more than 200 Part B patients, and more than 200 covered services.
Many practices assume they are exempt and never check. CMS posts eligibility results on the Quality Payment Program website, so look up each clinician by National Provider Identifier (NPI). If you fall below the threshold, you may still opt in to earn a positive adjustment. Eligible clinicians who do not report at all face the full penalty.
Step 2: Choose the Right Reporting Option
In 2026 you can report through traditional MIPS, through a MIPS Value Pathway (MVP), or through the Alternative Payment Model Performance Pathway (APP) if you belong to an ACO. Most small and mid-size practices still use traditional MIPS reporting, because it lets you pick measures that fit your specialty without committing to a fixed pathway.
Within traditional MIPS, you also pick a submission method. Options include Electronic Clinical Quality Measures (eCQMs), MIPS Clinical Quality Measures (MIPS CQMs), Qualified Clinical Data Registry (QCDR) measures, and, for small practices, Medicare Part B claims measures. Your EHR vendor, registry, or MIPS partner can tell you which methods support your measures.
CMS has said it wants to move clinicians toward MVPs over time and has signaled 2029 as a possible end point for traditional MIPS. That date is not final, so there is no need to rush a switch this year. Still, it helps to review the six new MVPs added for 2026 and see whether one fits your specialty.
Step 3: Build a Strong Quality Score
Quality is worth 30% of your final score, and it is where most points are won or lost. You generally report six quality measures, and at least one must be an outcome measure or another high-priority measure.
Choose measures with care. Some measures are “topped out,” which means most clinicians already score near perfect on them. CMS caps points on these measures, and in 2026 it applies that cap to 19 of them. A topped-out measure can look easy, but it limits how many points you can earn. Measures without a published benchmark can also score low.
Centers for Medicare & Medicaid Services also introduced a measure suppression policy beginning in 2026. If a measure is suppressed because of data problems or a guideline change, it will not count against you. Check your measure list again before you submit, since the status of a measure can change.
A few habits protect this category. Review measure specifications at the start of the year, not at the end. Make sure your EHR captures the right data fields. Run a mid-year report to confirm you will meet the 75% data completeness rule. If a measure looks weak by June, you still have time to swap it for a stronger one.
Step 4: Finish Improvement Activities Early
Improvement Activities are the easiest points to secure, yet many practices leave them for December. You need 40 points in this category. Most practices reach that with two high-weight activities or four medium-weight ones. Small practices, rural practices, and those in health professional shortage areas need only one high-weight or two medium-weight activities.
Each activity must run for at least 90 consecutive days. That is why a late start can cost you. If you begin in November, you may run out of days before the year ends.
The activity list also changes. For 2026, CMS added three new activities and removed eight. Confirm that the activities you used last year are still on the list before you plan around them. Good choices include patient engagement work, care coordination, and safety practices that your team already performs. Document everything with dates and sign-offs, because CMS can ask for proof.
Step 5: Protect Your Promoting Interoperability Points
Promoting Interoperability (PI) is worth 25% of your score, and it works differently from the other categories. You must meet every required measure. If you miss one, the entire category can drop to zero. That single loss can push a strong practice under 75 points.
The most common trap is the Security Risk Analysis. You must complete a HIPAA Security Risk Analysis within the calendar year and attest that you did it, and CMS has tied this measure more closely to the HIPAA Security Rule. Do not copy last year’s report. Update it to reflect current systems, vendors, and risks. You also need to attest to the SAFER Guides review and report your electronic prescribing and health information exchange measures.
Your EHR must be certified, and your reporting period must cover at least 90 continuous days. If you face a real barrier, such as a decertified EHR or a serious outage, you can apply for a hardship exception to have the category reweighted. Do not assume approval, and file before the deadline.
Step 6: Understand the Cost Category
You do not submit anything for Cost. CMS calculates it from your Medicare claims, and it makes up 30% of your score. There are no new cost measures for 2026, and CMS has set a two-year feedback-only period for any new ones so clinicians can learn before those measures count.
You cannot control cost with paperwork, but you can influence it with care habits. Better follow-up after hospital stays, clear chronic care management, and fewer avoidable emergency visits all help lower spending per patient. Review your CMS feedback reports to see which cost measures apply to you.
Step 7: Track Your Score All Year and Submit Early
The practices that avoid penalties treat MIPS as a year-round task. Set a quarterly check on your scores. Assign one person to own the process. Keep a simple record of which measures, activities, and attestations are done.
The submission window usually opens in January and closes on March 31 after the performance year ends. Do not wait for the last week. Early submission leaves time to fix data errors and upload missing files. After CMS releases your final score, you have a limited window to request a targeted review if you believe there was a calculation error. Keep your supporting records ready in case you need it.
Common Mistakes That Lead to MIPS Penalties
The same errors show up every year. Some practices assume they are exempt and never report. Others choose topped-out measures and fall short on points. Many forget to complete the Security Risk Analysis, which wipes out the Promoting Interoperability score. Some start Improvement Activities too late to log 90 days. Others submit on deadline day and find data gaps they cannot fix.
A final mistake is relying on last year’s setup. The rules, measures, and activity lists shift each year, so a plan that worked in 2025 may leave points on the table in 2026.
When to Get Outside Help
MIPS asks a small team to track four categories, several deadlines, and changing rules. If your staff is already stretched, working with a team that offers MIPS services can reduce risk. The best MIPS consulting services help with measure selection, data checks, Security Risk Analysis support, and on-time submission. Look for one that explains your score in plain language and reviews your progress before the year ends, not after.
This support matters most for small practices that lack a dedicated compliance person. It can also help larger groups that want to succeed in MIPS in 2026 and aim for a positive adjustment, not only a passing score.
Frequently Asked Questions
What score do I need to avoid a MIPS penalty in 2026?
You need at least 75 points. A score below 75 leads to a negative payment adjustment of up to 9% in 2028.
What happens if I do not report MIPS data at all?
If you are eligible and submit nothing, you receive the maximum negative adjustment. That is the most costly outcome and the easiest one to avoid.
Do small practices get any relief?
Yes. Small practices with 15 or fewer clinicians get automatic reweighting of Promoting Interoperability, lighter Improvement Activities requirements, and claims-based reporting as an option.
Can I still fix my score late in 2026?
Often you can. Improvement Activities need 90 days, so you should start soon. Quality and Promoting Interoperability fixes depend on your EHR and data, so review them now.
Is traditional MIPS going away?
CMS has signaled a move toward MVPs and has discussed 2029 as a possible final year for traditional MIPS. Nothing is final yet, so traditional MIPS reporting remains a valid option for 2026.
Final Thoughts
Avoiding MIPS penalties in 2026 comes down to a few steady habits. Confirm your eligibility, choose strong measures, start Improvement Activities early, complete your Security Risk Analysis, and submit before the deadline. These steps are simple, but they protect a meaningful share of your Medicare revenue.
Check the official Quality Payment Program website for the latest rule updates, and review your plan every quarter. A small amount of planning now can prevent a 9% reduction in 2028.
How Can PHCS Help You Avoid MIPS Penalties in 2026?
Proactive Healthcare Services works with practices that want to stay above the 75-point line without adding stress to their teams. We review your eligibility, help you pick measures that earn real points, and track your progress through the year so there are no surprises at submission. We also support your Security Risk Analysis and Improvement Activities documentation, then submit your data on time and check it for errors. If you want a clear plan for 2026, reach out to PHCS and let us help you protect your Medicare payments.
