Medicare Physician Data-driven Performance Payment System Act of 2026
- Sponsor
- Rep. Miller-Meeks, Mariannette [R-IA-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Apr 30, 2026
Bottom line
The bill overhauls Medicare's physician payment incentive program to emphasize data-driven performance and support smaller, under-resourced practices.
What it actually does
This bill transforms the existing Medicare Merit-based Incentive Payment System (MIPS) into the Data-driven Performance Payment System (DPPS) starting January 1, 2027. It reforms how payment adjustment factors are applied, revises performance thresholds, and establishes a mechanism to invest savings from the new system into under-resourced practices to support value-based care and quality improvement.
Proponents argue
Proponents argue that the current MIPS system is overly complex, burdensome, and does not effectively incentivize quality care or value. They contend that the DPPS will simplify reporting, provide clearer performance incentives, and direct resources to practices that need support to transition to value-based care, ultimately improving patient outcomes and system efficiency.
Opponents contend
Critics might argue that the new system, despite its stated goals, could introduce new complexities or unintended consequences for providers, particularly during the transition period. Concerns could also be raised about the effectiveness of the new adjustment factors or the criteria for 'under-resourced practices,' potentially leading to uneven impacts across the healthcare landscape.
The bill is concise enough that an informed reader can grasp its core changes within a reasonable timeframe, though understanding the full implications requires familiarity with existing Medicare payment systems.
Section 2(a)
Transformation to Data-driven Performance Payment System (DPPS)
This provision officially renames the Merit-based Incentive Payment System (MIPS) to the Data-driven Performance Payment System (DPPS), effective January 1, 2027. It also mandates that all references to MIPS in existing law will be deemed references to DPPS, with the Secretary of Health and Human Services (HHS) managing an orderly transition to avoid confusion.
Supporters argue
Supporters argue that the new name better reflects the program's evolving focus on data and performance, signaling a renewed commitment to value-based care and moving away from the perceived shortcomings of MIPS.
Critics contend
No specific opposition is typically raised against a name change itself, though opponents of the underlying MIPS structure might view it as a superficial rebranding without substantive change.
Tradeoffs
The primary tension is ensuring that the name change is accompanied by meaningful reforms, rather than being perceived as merely cosmetic.
Section 2(b)(1)(A) and (E)
Revised DPPS Payment Adjustment Factors
For 2028 and beyond, this provision establishes new, fixed payment adjustment factors for DPPS eligible professionals based on their composite performance score relative to a performance threshold. Professionals above the threshold receive a 1.25 adjustment, those at the threshold receive 1, those below (but not lowest) receive 0.75, and those at the lowest potential score receive 0.5. It also specifies that negative adjustments do not apply if the annual conversion factor update is already negative, and includes a 'hold harmless' provision for coinsurance and deductibles, meaning patients' out-of-pocket costs are calculated as if no adjustment was applied.
Section 2(c)
New Performance Threshold Methodology
This section amends the method for establishing the performance threshold. For 2028 through 2033 (or later if extended due to extraordinary circumstances), the threshold cannot exceed 75 points. After this temporary period, a new 'replacement performance threshold methodology' will be established by the Secretary of HHS, based on recommendations from the Comptroller General of the United States. The Comptroller General's recommendations must consider preventing unintended consequences, impacts on different types of professionals (small, rural, underserved), and stakeholder consultation.
Section 2(d)
Revised Budget Neutrality Mechanism
This provision revises the budget neutrality requirements. For years before 2028, existing rules apply. For 2028 and subsequent years, the Secretary must decrease the positive DPPS adjustment factors (for those above the threshold) to ensure that the estimated aggregate increase in allowed charges from positive adjustments does not exceed the estimated aggregate decrease in allowed charges from negative adjustments. This means the program aims to be budget neutral, with positive adjustments funded by negative adjustments.
Section 2(e)
Investing in Under-resourced Practices
This provision establishes a new lump-sum incentive payment for DPPS eligible professionals in 'small practices' (15 or fewer professionals) during a 'DPPS savings year' (when negative adjustments exceed positive adjustments). These payments are to be used for improving care management, addressing health-related social needs, implementing certified EHR technology, improving performance in DPPS categories, or participating in value-based care models. The Secretary can prioritize practices in rural areas, health professional shortage areas, medically underserved areas, or those with low composite scores.
This provision states that a DPPS eligible professional will not be subject to the negative adjustment factor (0.75) if they do not receive timely confidential feedback (within 60 days of quarter end) on administrative claims-based measures for each quarter of the performance period. The feedback must include patient/episode attribution, identification of contributing items/services, and who furnished them.
Section 2(b)(1)(E)(ii)(III)
Why it matters:This is standard legislative practice for detailed operational rules within a larger amendment. It's a technical safeguard for providers, ensuring fairness in the performance measurement process.
Case for: Proponents argue this is a crucial protection for providers, ensuring they are not penalized due to administrative failures by the agency to provide necessary performance data. Timely feedback is essential for providers to adjust their practices and improve.
Case against: No specific opposition is typically raised against ensuring timely feedback, as it's a matter of fairness and operational efficiency.
Estimated impact: Potentially significant for providers who might otherwise face penalties due to delayed or inadequate feedback from CMS. It incentivizes CMS to provide timely data, which is critical for the program's integrity.
Mandates the Comptroller General of the United States to submit a report by December 31, 2029, with detailed recommendations for a new 'replacement performance threshold methodology.' These recommendations must prevent unintended consequences, consider the impact on small, rural, or underserved practices, and involve stakeholder consultation.
Section 2(c)(2)(III) and (IV)
Why it matters:This is a forward-looking procedural requirement, common in legislation that sets up future rulemaking. It delegates a critical analytical task to an independent body.
Case for: Proponents argue that involving the Comptroller General ensures an independent, expert assessment and recommendations for a critical component of the DPPS, promoting a robust and equitable system. The specific requirements ensure vulnerable practices are considered.
Case against: No specific opposition is typically raised against independent review and recommendations, though some might argue it adds another layer of bureaucracy or delays finalization of the methodology.
Estimated impact: High impact on the long-term structure and fairness of the DPPS, as the methodology will determine how providers are evaluated and paid for years to come.