What is the Cost Performance Category?


The Cost performance category is essentially identical to the evaluation of cost under the Value-Based Payment Modifier program. Its purpose is to encourage providers to make cost-effective care and treatment decisions.

Cost is not a part of MIPS in 2017 (category weight of 0%), but it will become important in 2018 and beyond.

Cost is attributed by CMS to providers based upon Part B claims data—no data submission is required.


MIPS categorizes costs into per capita costs, Medicare spending per beneficiary (MSPB), and episode-based costs.

Per capita costs are attributed to providers by a two-step process:

  1. If a patient received services from a primary care provider (PCP) during the year, then that patient’s costs are attributed to the PCP that billed the plurality of Part B expenses associated with evaluation and management (EM) services.
  2. Otherwise, that patient’s costs are attributed to the specialist that billed the plurality of Part B expenses associated with EM services.

MSPB includes those costs associated with certain inpatient admissions, and they are attributed to the provider with the plurality of Medicare Part B charges during the hospitalization.

Episode-based costs are costs associated with a specific episode of care. Only certain CPT codes, or certain combinations of CPT and ICD-10 codes, are eligible for evaluation of episode-based costs.

CMS has proposed 117 episode groups, including one for Rheumatoid Arthritis. Attribution of these costs is complex and depends on the nature of the relationship of the provider to the episode and the patient. Episode-based costs do not currently factor into the evaluation of a provider’s cost performance and the calculation of the MIPS Composite Performance Score. However, CMS will begin to provide feedback on episode-based costs beginning in 2017.