The Quality Tax
The Price of Measuring What Does Not Matter
In the spring of this year, our emergency medicine group was informed that we would be enrolled in the Merit-based Incentive Payment System (MIPS)1 for the coming fiscal year. We had previously participated in an accountable care organization. That arrangement dissolved, and in its place came a federal quality program created under the Medicare Access and CHIP Reauthorization Act of 2015.2
MIPS is a federal pay-for-performance program administered by Medicare. It was created with the stated aim of rewarding high quality care and financially penalizing low quality care, as defined by the federal government through a set of measurable metrics intended to indicate whether care was good or bad. Clinicians are scored across several categories, including quality measures, cost, improvement activities, and use of electronic health records. These scores are combined into a composite performance score that determines future payment adjustments. High scores yield modest bonuses of about one percent, while low scores result in penalties that can reach nine percent of total Medicare reimbursement. Participation is therefore not optional in any meaningful sense, as noncompliance or poor performance directly reduces revenue.
We learned of the change a quarter of the way into the performance year. At the time of notification, we had not been told which quality metrics would be used to evaluate us. We had no data on our current performance, no reporting infrastructure in place, and no ability to assess our exposure. We were told that a dashboard would eventually be built to track our compliance, but that the relevant measures would not be integrated into the electronic medical record until midway through the year. We were, in effect, already being judged by criteria we could not yet see.
The financial consequences are substantial. Under MIPS, reimbursement penalties can reach nine percent. Medicare accounts for approximately forty percent of our emergency department revenue. The potential exposure is therefore roughly five percent of total revenue. For a physician group, that magnitude represents a meaningful threat to stability and may force contraction.
The work required to participate in this program occurs almost entirely outside the bedside. In the first half of March alone, our group participated in four separate meetings, each approximately two hours in duration. Nearly every physician attended. These meetings also included representatives from information technology, billing and coding, documentation specialists, and senior hospital leadership. Present at various points were the hospital’s Chief Operating Officer, the Chief Medical Officer, the Chief Nursing Officer, the Chief Administrative Officer, and the Chief Population Health Officer. Several of these highly-positioned (and highly-compensated) individuals were learning about MIPS for the first time during these discussions. Eight hours of physician time were consumed in a single month. For a group of thirty physicians, that is approximately 240 physician-hours diverted away from patient care. This figure excludes the time of administrators, analysts, and IT personnel, all of whom are compensated at professional salaries. The output of this effort consisted entirely of coordination around documentation.
If one assigns even a conservative value to physician time, the cost becomes immediately visible. At an estimated $250 per hour in professional productivity, 240 physician-hours represents approximately $60,000 in a single month devoted solely to meetings about compliance. That figure reflects only the opportunity cost of physicians sitting in conference rooms rather than seeing patients, and only for one single department within a single hospital containing dozens of others.
This math excludes the salaries of the administrators in those same meetings, the time of IT staff building reporting infrastructure, the cost of electronic medical record modifications, and the licensing fees for reporting software and external vendors. It also excludes the ongoing inefficiencies introduced into daily practice, including additional documentation requirements, automated prompts, hard stops, and workflow interruptions that slow physicians during clinical shifts. It excludes the salaries of compliance officers, analysts, and consultants whose roles exist primarily to satisfy reporting requirements.
It further excludes the parallel administrative apparatus on the government side, where large numbers of employees design, monitor, and enforce the program, supported by long-term compensation structures, such as government pensions, that extend well beyond their period of active work. This single program operates across tens of thousands of hospitals and health systems, each with numerous departments engaged in reporting, yet it represents only a minuscule fraction of the broader healthcare regulatory framework. When considered in full, the sheer scale of the administrative burden becomes difficult to fully appreciate, and the total cost reaches numbers so high as to be comprehensible only in the abstract.
MIPS requires performance across a large set of hundreds quality measures, but the score is calculated based on a group’s top six metrics. In practice, therefore, groups select six measures to pursue. The rational strategy favors measures that can be satisfied with the greatest reliability rather than those with the greatest clinical importance. For example, one of the available measures requires that when a physician refers a patient to a specialist, the referring physician receives documentation from the specialist visit. In a primary care setting, this has some intuitive appeal. In emergency medicine, the relevance is minimal. The emergency physician does not maintain a longitudinal relationship with the patient and does not require ongoing updates to manage future care.
The measure can nonetheless be satisfied perfectly. All that is required is an automated process within the electronic medical record that routes the specialist’s note to the referring physician’s inbox. Once this is built, compliance approaches one hundred percent. Whether the physician reads the note has no bearing on compliance. Whether the information alters patient care has no bearing on compliance. The metric is fulfilled. This example reflects a broader pattern. The optimal strategy is to identify measures that can be automated or satisfied through templated documentation. Hospitals across the country converge on this approach. The resulting system prioritizes what can be meaninglessly automated over what is clinically consequential.
Many proponents claim that such programs improve quality. That argument depends on equating quality with documentation, data capture, and compliance. Clinical outcomes instead depend on timely recognition, sound judgment, and effective intervention. A completed field in the chart does not change the course of sepsis. An electronically closed referral loop does not prevent myocardial infarction. MIPS focuses on proxies and artifacts of the documentation process and rewards the capacity to generate compliant data.
The resources required to sustain this system are substantial. Hospitals employ quality departments, compliance officers, data analysts, and IT specialists to manage reporting requirements. External vendors sell software and consulting services to facilitate submission. Physicians devote time to meetings, documentation changes, and attestation processes. These costs are incorporated into the price of care. They may appear as higher charges, reduced staffing at the bedside, or longer wait times as resources are diverted from direct patient care to administrative compliance. The patient does not see the machinery, but the patient does experience its consequences.
Faced with financial penalties, rational actors respond predictably. Physician groups and hospitals select measures that can be satisfied with certainty. They invest in automation, modify documentation templates, and hire personnel to ensure compliance. Reengineering clinical care to satisfy abstract metrics would require far greater effort and would be far less measurable. The system therefore rewards the appearance of quality rather than its substance.
MIPS was conceived as a mechanism to reward value. In practice, it has created a parallel industry devoted to demonstrating value. Medicine now devotes increasing resources to proving that care is being delivered according to prescribed metrics. Those resources are finite. Every hour spent in a compliance meeting displaces time that could be spent with patients. Every dollar spent on reporting infrastructure displaces investment in clinical capacity. The cost is real. It is borne by physicians, by hospitals, and ultimately by patients. It is the price of measuring what does not matter.
Centers for Medicare & Medicaid Services. About MIPS. Quality Payment Program. https://qpp.cms.gov/get-started/what-is-mips/about-mips. Accessed March 23, 2026.
Centers for Medicare & Medicaid Services. Medicare Access and CHIP Reauthorization Act (MACRA). https://www.cms.gov/medicare/quality/value-based-programs/chip-reauthorization-act. Accessed March 23, 2026.