Measure Calculation and Cost Scoring for Medicare’s Quality Payment Program

Official Title
QPP Cost Scoring
United States
IMPAQ Health
Implementation Services
Performance Measurement & Quality Improvement
Centers for Medicare & Medicaid Services (CMS)
Resource Use Measures
Risk Adjustment
Episode-based Cost Measures

In an effort to promote value-based care over volume-based care, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established the Quality Payment Program (QPP) and repealed the Sustainable Growth Rate (SGR) formula. Under the QPP, the Centers for Medicare & Medicaid Services (CMS) incentivizes clinicians to provide high-quality care, efficiently, under two payment paths: (1) the Merit-based Incentive Payment System (MIPS) and (2) Alternative Payment Models (APMs).

For clinicians participating in MIPS, CMS calculates performance-based payment adjustments based on data in four performance categories: quality, cost, improvement activities, and promoting interoperability.

The purpose of this project was to support CMS’ Center for Clinical Standards and Quality (CCSQ) with the development and calculation of Medicare administrative claims-based indicators and measures that impact physicians' participation and performance in MIPS. 


By helping to develop appropriate indicators and measures for physician participation in MIPS, IMPAQ helped CMS advance and implement the shift toward value-based care. This means that more Americans will benefit from health care that prioritizes their health and wellbeing more than the volume of care provided by physicians.


To support effective and efficient physician participation in MIPS, IMPAQ developed requirements and technical specifications, calculated measures, and validated and verified the indicators.

IMPAQ conducted these activities on:

  • Seven indicators that identify whether a provider may be exempt from the MIPS program or receive special statuses;
  • A quality measure assessing providers’ abilities to manage patient readmission after a discharge from a hospital (i.e., a 30-day all-cause readmission measure); and
  • Measures of cost for treating patients that were attributed to providers, including an annual per-capita cost measure and costs of treating acute and chronic condition episodes.

IMPAQ used an agile approach to calculate the measures for MIPS-participating providers, allowing for iterative, efficient, and collaborative measure development. Applying agile principles is a relatively new approach for measure development, and we were able to incorporate agile software development principles into the measure specification and calculation process.

Skills & Expertise

IMPAQ’s expertise in data science, measure development, and program operations positions us to work collaboratively, strategically, and efficiently  with CMS as they continue to move toward tying payment and quality to APMs. Staff at IMPAQ bring a diverse set of skills to make us successful, including an understanding of payment and health care delivery systems, performance measure development, data science, clinical expertise, and programming expertise.

The IMPAQ Cost Scoring team has experience operationalizing and calculating complex measures of quality performance and resource use. Our approach to ensuring accuracy in our measure results included conducting validation and verification of specifications and programming code.

The project team consisted of economists, data scientists, data architects, business analysts, and certified project management professionals.