Navigating MIPS 2025: A Guide for Small Physical Therapy Practices

The Merit-based Incentive Payment System (MIPS) continues to shape Medicare reimbursement for physical therapists in 2025, with payment adjustments reaching up to ±9% of Medicare Part B revenues. For a small practice billing $300,000 annually in Medicare services, this could mean a difference of $27,000 in annual revenue—depending on your MIPS performance score.

But here’s the good news: Many small physical therapy practices may be exempt from MIPS under the low volume threshold. And for those who must participate, CMS has introduced new pathways designed to reduce administrative burden while still rewarding quality care.

This comprehensive guide walks you through MIPS 2025 requirements specific to physical therapy, helps you determine if you’re required to participate, explains the 75-point performance threshold, and introduces the new MVP (MIPS Value Pathway) option designed for rehabilitation professionals.

What Is MIPS? Understanding the Quality Payment Program

MIPS (Merit-based Incentive Payment System) is one track of the Quality Payment Program (QPP)—a CMS initiative that adjusts Medicare payments based on the quality and value of care provided, rather than just the volume of services.

MIPS vs. APMs

There are two QPP participation tracks:

1. MIPS (Merit-based Incentive Payment System) - Fee-for-service model with quality-based adjustments
2. APMs (Alternative Payment Models) - Value-based care arrangements (ACOs, bundled payments, etc.)

Most physical therapy practices participate through MIPS, as few PT-specific APM options exist.

The Two-Year Payment Lag

Critical timing: Your 2025 performance (data collected January 1 - December 31, 2025) determines your 2027 Medicare payment adjustment.

Example timeline:

• 2025 Performance Year: You report quality measures, improvement activities, and other MIPS data
• 2026 Scoring Year: CMS calculates your MIPS score and determines your payment adjustment percentage
• 2027 Payment Year: Your adjustment (±9%) is applied to every Medicare Part B claim you submit

This two-year lag means decisions you make today affect revenue two years from now.

Are You Required to Participate in MIPS 2025?

Not all physical therapists must participate in MIPS. CMS uses a low volume threshold to exempt smaller practices.

Low Volume Threshold for 2025

You are exempt from MIPS if you meet ANY ONE of these criteria during the 12-month determination period (typically the previous calendar year):

1. Bill $90,000 or less in Medicare Part B allowed charges for covered professional services, OR
2. Provide care to 200 or fewer Medicare Part B beneficiaries, OR
3. Furnish 200 or fewer covered professional services under Medicare Part B

Important: You only need to meet ONE of these thresholds to be exempt—not all three.

Examples: Who’s Exempt vs. Required

Example 1: Solo practitioner (EXEMPT)

• Annual Medicare Part B charges: $75,000
• Number of Medicare patients: 285
• Number of services provided: 1,150

Result: Exempt due to billing less than $90,000, even though patient count and service count exceed 200.

Example 2: Two-therapist practice (REQUIRED)

• Annual Medicare Part B charges: $145,000
• Number of Medicare patients: 320
• Number of services provided: 2,400

Result: Required to participate—exceeds all three thresholds.

Example 3: Specialty practice with limited Medicare (EXEMPT)

• Annual Medicare Part B charges: $125,000
• Number of Medicare patients: 180
• Number of services provided: 890

Result: Exempt due to treating fewer than 200 Medicare patients, even though billing exceeds $90,000.

How to Check Your MIPS Eligibility Status

CMS provides three ways to verify your participation status:

1. QPP Participation Status Tool

   • Visit qpp.cms.gov/participation-lookup
   • Enter your NPI or TIN
   • View your eligibility determination for the current performance year

2. QPP Website Account

   • Create an account at qpp.cms.gov
   • Log in to view personalized eligibility information and reporting requirements

3. Contact your MAC (Medicare Administrative Contractor)

   • Request participation status determination
   • Receive written confirmation of exemption or requirement

Pro tip: Check your status in early January each year, as thresholds and calculations can change based on the prior year’s data.

Can You Voluntarily Participate if Exempt?

Yes. Even if you’re below the low volume threshold, you can opt in to MIPS participation voluntarily.

Why would you opt in?

• Positive payment adjustments: If you score above 75 points, you’ll receive up to +9% reimbursement increase in 2027
• Performance monitoring: Track your quality metrics to prepare for future mandatory participation
• Competitive positioning: Market your MIPS performance to referral sources and patients

Caution: If you opt in and score below 75 points, you’ll receive a negative payment adjustment. Only opt in if you’re confident you can exceed the performance threshold.

The MIPS Performance Threshold: 75 Points

To avoid a negative payment adjustment, you must achieve at least 75 MIPS points out of a possible 100.

Scoring Breakdown

Critical rule: A score of exactly 75 points results in zero adjustment—you receive standard Medicare reimbursement without bonus or penalty.

What Contributes to Your MIPS Score?

Your total MIPS score (up to 100 points) comes from four performance categories, each weighted differently:

2025 change alert: The Promoting Interoperability category is no longer automatically reweighted for physical therapists as it was in previous years. This means PTs may need to report PI measures or request an exemption/reweighting.

MIPS Category 1: Quality (30% of Score)

The Quality category measures clinical outcomes and processes using standardized quality measures.

2025 Quality Requirements for Physical Therapy

You must report:

• 6 quality measures (minimum)
• 1 must be an Outcome measure (or if no outcome measure applies, then an additional high-priority measure)
• Data completeness: 75% of eligible encounters (all payers, not just Medicare)
• Performance period: Full calendar year (January 1 - December 31, 2025)

Top Quality Measures for Physical Therapy (2025)

Physical therapists can choose from 26 different quality measures in 2025. Here are the most relevant:

Functional Outcome Measures (Outcome Category)

FOTO (Focus On Therapeutic Outcomes) Measures: These PROM (Patient-Reported Outcome Measure) assessments are highly relevant for PT practices and qualify as outcome measures.

Why FOTO measures work for PTs:

• Risk-adjusted to patient characteristics
• Standardized and validated across populations
• Can be tracked within your EMR system
• Demonstrate functional improvement over episode of care

Measure #182: Functional Outcome Assessment

Description: Percentage of visits for patients aged 18+ with documentation of a current functional outcome assessment using a standardized tool and documentation of a care plan based on identified deficiencies within two days.

Why this matters: This measure rewards systematic use of outcome tools (like FOTO, OPTIMAL, or other validated instruments) to track patient progress.

Documentation requirements:

• Initial functional assessment using standardized tool
• Re-assessment at regular intervals (typically every 10 visits or 30 days)
• Care plan modifications based on assessment results
• Documentation completed within 2 days of assessment

Additional High-Priority Measures

If you don’t have applicable outcome measures for all patients, you can substitute with additional high-priority measures such as:

• Falls risk assessment - Documentation of falls risk screening and intervention plan
• Pain assessment and follow-up - Documentation of pain intensity, functional impact, and treatment response
• Preventive care and screening measures - Relevant for practices treating elderly or at-risk populations

Data Completeness Requirement: 75% All Payers

Major 2025 requirement: You must report on 75% of all eligible patients—not just Medicare patients, but all payers (commercial insurance, Medicaid, workers’ comp, cash pay).

Why this matters: In previous years, many measures only required Medicare data. The all-payer requirement means you must track quality measures systematically across your entire patient population.

Example:

• Your practice sees 2,000 patients annually
• 800 are Medicare (40%)
• 1,200 are other payers (60%)

Old requirement: Report on 75% of 800 Medicare patients = 600 patients 2025 requirement: Report on 75% of 2,000 total patients = 1,500 patients

Practical impact: Your EMR system must capture quality measure data for all patients, not just Medicare beneficiaries.

How Proactive Chart Simplifies Quality Reporting

Proactive Chart automatically:

• Tracks functional outcome assessments for all patients
• Calculates data completeness percentage in real-time
• Alerts you when patients are due for re-assessment
• Generates MIPS-ready quality reports with one click
• Supports FOTO, OPTIMAL, and other standardized outcome tools

No manual spreadsheets. No end-of-year scrambling. Quality data is captured naturally during documentation.

MIPS Category 2: Promoting Interoperability (25% of Score)

The Promoting Interoperability (PI) category—formerly known as “Meaningful Use”—measures your use of certified EHR technology for health information exchange, patient engagement, and electronic prescribing.

2025 Change: No More Automatic Reweighting for PTs

Previous years: Physical therapists qualified for automatic reweighting of the PI category to zero, with that 25% redistributed to the Quality category.

2025 change: CMS eliminated automatic reweighting for PTs, OTs, and SLPs.

What this means:

• You must either report PI measures to earn the 25 points, OR
• Request a hardship exemption to reweight the category to zero

PI Reporting Requirements

To earn full PI credit (25 points), you must report on these measure groups:

1. e-Prescribing - Percentage of prescriptions sent electronically
2. Health Information Exchange - Provide patients with electronic access to health information
3. Provider to Patient Exchange - Enable patients to view, download, and transmit their health information
4. Security Risk Analysis - Conduct or review a security risk analysis and implement updates

PT-specific challenge: Many physical therapists don’t prescribe medications, making e-prescribing measures irrelevant.

Hardship Exemption for PI Category

If you cannot meaningfully report PI measures, you can apply for a hardship exemption.

Common reasons for PT hardship exemptions:

• Lack of prescribing authority - PTs don’t prescribe medications, so e-prescribing measures don’t apply
• Insufficient internet connectivity - Practices in rural areas with limited broadband
• Extreme and uncontrollable circumstances - Natural disasters, public health emergencies
• EHR vendor product issues - Your EHR system doesn’t support required functionality

Application process:

• Submit hardship exception request through the QPP website
• Deadline: December 31, 2025 (for 2025 performance year)
• If approved, PI category is reweighted to zero and the 25% is redistributed to Quality (making Quality worth 55%)

Proactive Chart advantage: Our certified EHR includes PI tracking capabilities, making it easy to report if you choose to, or we can guide you through the hardship exemption process.

Small Practice Automatic Reweighting

If you qualify as a small practice (15 or fewer eligible clinicians) and do not submit PI data, the PI category is automatically reweighted to zero, with the points redistributed to Quality (40%) and Improvement Activities (30%).

Small practice definition:

• Individual clinician (solo practitioner), OR
• Group with 15 or fewer eligible clinicians

Why this matters: If you’re a small practice, you don’t need to report PI measures unless you want to maximize your score potential.

MIPS Category 3: Improvement Activities (15% of Score)

Improvement Activities (IA) measure your participation in activities that improve clinical practice, patient engagement, care coordination, or population health.

2025 IA Requirements

Standard reporting:

• Attest to 4 medium-weighted activities for at least 90 consecutive days, OR
• Attest to 2 high-weighted activities for at least 90 consecutive days

Small practice reporting (15 or fewer clinicians OR rural/HPSA location):

• Attest to 2 medium-weighted activities for at least 90 days, OR
• Attest to 1 high-weighted activity for at least 90 days

Top Improvement Activities for Physical Therapy

Here are the most practical IAs for PT practices:

High-Weighted Activities (earn full 15 points with just 1-2 activities)

IA_BE_6: Collection and Follow-Up on Patient Experience and Satisfaction Data

• Collect patient satisfaction data using validated surveys (e.g., NPS, patient satisfaction surveys)
• Regularly review feedback and implement improvements
• Document actions taken based on patient feedback

Implementation example: Use automated patient satisfaction surveys through your EMR after every visit or at discharge, review results quarterly, and document practice improvements (e.g., “extended appointment times based on patient feedback”).

IA_PM_1: Participation in Systematic Anticoagulation Program

• Relevant if you treat patients on anticoagulation therapy (e.g., post-surgical DVT prophylaxis patients)
• Coordinate with prescribing physicians on therapy modifications

IA_PCMH_1: Participate in PCMH (Patient-Centered Medical Home)

• Relevant if you’re part of an ACO or care coordination network
• Document your role in multidisciplinary care teams

Medium-Weighted Activities (need 2-4 to earn full points)

IA_CC_3: Implementation of Additional Activity as a Result of TA for Improving Care Coordination

• Implement care coordination improvements (e.g., integrated scheduling with referring physicians, shared care plans)

IA_EPA_3: Use of QCDR for Ongoing Practice Assessment and Improvements

• Participate in a Qualified Clinical Data Registry (QCDR) to benchmark performance
• Use data to identify improvement opportunities

IA_PSPA_7: Use of QCDR Data for Ongoing Practice Assessment

• Review QCDR reports quarterly
• Document practice changes based on data analysis

IA_BE_24: Engagement of Patients Through Implementation of Improvements in Patient Portal

• Enhance patient portal functionality (appointment scheduling, secure messaging, access to therapy home programs)
• Track patient portal adoption rates

IA_AHE_3: Provide Education Opportunities for New Clinicians

• Serve as clinical instructor for PT students
• Mentor new graduate therapists
• Provide continuing education for staff

Attestation Process

Unlike Quality measures (which require data submission), Improvement Activities only require attestation—you simply confirm you performed the activity for at least 90 consecutive days.

Documentation to maintain (in case of audit):

• Activity start and end dates
• Description of implementation
• Evidence of participation (meeting minutes, training certificates, survey reports, etc.)
• Actions taken based on activity results

Proactive Chart feature: Our Improvement Activities tracker helps you select relevant IAs, tracks 90-day participation periods, and generates attestation documentation.

MIPS Category 4: Cost (30% of Score)

The Cost category measures the cost-efficiency of care you provide, using episode-based cost measures and total per capita cost calculations.

Good News for PTs: Automatic Calculation

You do not report Cost data. CMS calculates Cost measures automatically based on Medicare claims data.

Cost measures relevant to PT:

• Physical/Occupational Therapy Episode-Based Cost Measure
• Total Per Capita Cost (for patients attributed to you)

What affects your Cost score:

• Number of visits per episode
• Use of high-cost services (imaging, injections coordinated through your care)
• Efficiency of treatment progression (longer episodes = higher costs)

Best practices to optimize Cost score:

• Discharge patients when they plateau (don’t extend treatment unnecessarily)
• Minimize unnecessary imaging or specialist referrals
• Focus on evidence-based interventions with shorter episode durations
• Coordinate care effectively to prevent complications or re-injury

Important: You cannot directly report or influence Cost scores in real-time. Focus on Quality, PI, and IA categories where you have direct control.

MIPS Value Pathways (MVPs): The Future of MIPS

CMS introduced MIPS Value Pathways (MVPs) to simplify MIPS reporting by creating specialty-specific bundles of measures and activities.

What Is an MVP?

An MVP is a cohesive set of measures and activities aligned to a specific specialty or condition. Instead of choosing measures from hundreds of options, you report on a pre-selected, focused set.

Benefits of MVPs:

• Reduced complexity - Fewer measures to track (typically 4-6 quality measures instead of 6+)
• Specialty-aligned - Measures relevant to your practice and patient population
• Streamlined IA reporting - 1 high-weighted or 2 medium-weighted activities (same as small practice requirements)
• Better benchmarking - Compared against similar practices, not all MIPS participants

The Rehabilitative Support for Musculoskeletal Care MVP

MVP ID: M1370

This MVP was introduced in 2024 specifically for physical therapists, occupational therapists, and chiropractors treating musculoskeletal conditions.

Measures included:

• Functional outcome assessment (e.g., FOTO measures)
• Pain assessment and management
• Fall risk screening and intervention
• Patient experience and satisfaction

Improvement Activities:

• Care coordination activities
• Patient engagement and education
• Use of outcome registries

Should You Choose Traditional MIPS or MVP in 2025?

Choose Traditional MIPS if:

• You have diverse patient populations beyond musculoskeletal conditions
• You’re already reporting successfully and meeting the 75-point threshold
• You want maximum flexibility in measure selection

Choose MVP if:

• Your practice focuses primarily on musculoskeletal conditions (which most PT practices do)
• You want simplified reporting with fewer measures
• You prefer specialty-specific benchmarking

MVP Registration Requirement

To participate in an MVP, you must register:

• Registration period: April 1 - December 1, 2025
• Where to register: QPP website (qpp.cms.gov)
• Selection: Choose your MVP and submission type (individual or group)

Important: MVP participation is voluntary through 2027. CMS plans to phase out traditional MIPS after the 2027 performance year, making MVPs (or APMs) the only options starting in 2028.

Strategic recommendation: If you’re eligible, consider piloting MVP participation in 2025 to prepare for the eventual mandatory transition.

Group vs. Individual Reporting

You can participate in MIPS as an individual clinician or as a group practice.

Individual Reporting

How it works: Your MIPS score is based on your personal performance across all categories.

Best for:

• Solo practitioners
• Clinicians in multi-specialty groups where PT is a small component
• Therapists who want control over their own measures

Group Reporting

How it works: All clinicians in your TIN are scored collectively. One set of measures is reported for the entire group.

Best for:

• PT practices with multiple clinicians
• Groups where all therapists see similar patient populations
• Practices that want to pool data for easier data completeness achievement

Advantages of group reporting:

• Pooled patient data makes it easier to meet 75% data completeness
• Single submission instead of multiple individual submissions
• Collaborative approach to improvement activities

Disadvantage:

• One score for everyone - High performers may be brought down by low performers

APM Participation

If your practice participates in an Advanced APM (Alternative Payment Model) like a PT-focused bundled payment arrangement or ACO, you may be exempt from MIPS.

Note: Very few physical therapy practices currently participate in qualifying APMs. Most PT practices remain in traditional MIPS.

MIPS Timeline: Key Dates for 2025

Critical dates to remember:

• Register for MVP by December 1 if you plan to use that pathway
• Submit hardship exemptions by December 31 for PI category reweighting
• Submit MIPS data by March 31, 2026 (exact date TBD by CMS)

Common MIPS Mistakes Physical Therapists Make

Mistake #1: Not Checking Eligibility Status

Problem: Assuming you’re exempt without verifying, or assuming you must participate when you’re actually below the low volume threshold.

Solution: Check your status using the QPP Participation Status Tool in January each year.

Mistake #2: Waiting Until December to Start Tracking

Problem: Realizing in November that you haven’t collected any quality measure data all year.

Solution: Configure your EMR to capture quality measures automatically from day one (January 1).

Mistake #3: Only Tracking Medicare Patients

Problem: The 75% data completeness requirement applies to all payers, not just Medicare.

Solution: Ensure functional outcome assessments and quality measures are captured for every patient, regardless of insurance.

Mistake #4: Choosing Irrelevant Quality Measures

Problem: Selecting measures that don’t apply to your patient population, resulting in low numerator/denominator ratios.

Solution: Choose measures that align with your typical diagnoses and treatments (e.g., FOTO measures for musculoskeletal conditions).

Mistake #5: Not Documenting Improvement Activities

Problem: Performing qualifying activities but failing to maintain documentation proving participation.

Solution: Keep records of IA participation (dates, meeting minutes, survey results, certificates) in case of audit.

Mistake #6: Missing the MVP Registration Deadline

Problem: Deciding to use the MVP pathway in November but missing the December 1 registration deadline.

Solution: Decide by October whether you’ll use traditional MIPS or MVP, and register early if choosing MVP.

How Proactive Chart Simplifies MIPS Reporting

Managing MIPS manually is time-consuming and error-prone. Proactive Chart automates the entire process:

Automated Quality Measure Tracking

• Functional outcome assessments integrated into documentation workflow
• Real-time data completeness calculations (shows you’re at 68% completeness with 2 months remaining)
• Automatic flagging of patients due for re-assessment

Promoting Interoperability Built-In

• Certified EHR technology meeting all PI requirements
• Automatic PI measure calculation if you choose to report
• Guided hardship exemption application if needed

Improvement Activities Tracker

• Library of PT-relevant IAs with implementation guidance
• 90-day participation tracking
• Attestation documentation generation

One-Click MIPS Submission

• Generates QRDA files for electronic submission
• Compatible with QPP submission portal
• Pre-submission validation to catch errors before filing

Performance Dashboards

• Real-time MIPS score estimates based on current data
• Comparison to previous year’s performance
• Identification of improvement opportunities

Time savings: Practices using Proactive Chart spend 90% less time on MIPS reporting compared to manual methods—saving 40-60 hours per year.

Is MIPS Worth the Effort for Small Practices?

For exempt practices: If you’re below the low volume threshold, MIPS participation is optional. Consider opting in only if:

• You’re confident you can exceed 75 points (to earn a bonus, not a penalty)
• You want to prepare for future mandatory participation (if your practice grows)
• You value quality benchmarking for practice improvement

For required practices: MIPS is mandatory, but the effort can pay off. Achieving 85+ points can generate a 5-7% payment increase—potentially $15,000-$30,000 for a small practice.

With modern EMR tools like Proactive Chart, MIPS compliance becomes a natural byproduct of clinical documentation rather than a separate administrative burden.

Conclusion: MIPS Doesn’t Have to Be Overwhelming

MIPS 2025 brings a 75-point performance threshold, all-payer data completeness requirements, and new MVP options designed to simplify reporting for physical therapists. While the regulations can seem daunting, understanding your participation status, selecting the right quality measures, and leveraging technology to automate data capture makes MIPS manageable—even for small practices.

Key takeaways:

• Check your eligibility using the QPP Participation Status Tool (you may be exempt under the $90K/200-patient threshold)
• 75 points is the threshold to avoid penalties; scoring higher earns bonuses up to +9%
• All-payer data completeness means tracking quality measures for every patient, not just Medicare
• MVPs offer a simplified pathway for musculoskeletal-focused PT practices
• Automation is essential for efficient, accurate MIPS reporting without excessive administrative burden

Ready to simplify MIPS compliance and maximize your quality scores? Discover how Proactive Chart automates MIPS reporting and schedule a demo today.

References:

• Centers for Medicare & Medicaid Services. (2024). Quality Payment Program Final Rule CY 2025. Federal Register.
• Centers for Medicare & Medicaid Services. (2025). QPP Participation Status Tool. qpp.cms.gov/participation-lookup.
• American Physical Therapy Association. (2025). Merit-Based Incentive Payment System (MIPS) Resources. APTA.org.
• Centers for Medicare & Medicaid Services. (2025). MIPS Value Pathways (MVPs). qpp.cms.gov/mips/explore-mips-value-pathways.

Disclaimer: This article provides general guidance on MIPS requirements for physical therapy practices. MIPS rules are complex and subject to change. Always consult official CMS resources and qualified healthcare compliance specialists for practice-specific advice. Scoring thresholds and category weights may be updated annually.