What does it mean that MIPS is a budget-neutral program?

The concept of MIPS being a budget-neutral program means that the incentives and penalties for performance are funded through adjustments to the overall budget that is allocated for payments to providers. Specifically, this means that positive payment adjustments awarded to those who successfully report their quality measures come from the negative payment adjustments imposed on those who do not meet performance benchmarks. This creates a system where successful reporters earn a bonus funded by the penalties of those who do not perform as well.

In a budget-neutral environment, the total amount paid out in incentives must equal the total amount taken back from penalties, which ensures that the program does not increase or reduce the overall spending for Medicare. Therefore, the effectiveness of MIPS in incentivizing quality care and efficiency hinges on this redistribution mechanism, making it a crucial element of program design.