As value-based care continues to shape the U.S. healthcare system, clinicians and practice leaders are once again asking an important question: Should we stay in MIPS, or is it time to move to an Advanced Alternative Payment Model (APM)?
In 2026, this decision matters more than ever. Payment adjustments are larger, reporting requirements are more complex, and the pressure to demonstrate quality and efficiency continues to increase. While both paths fall under the Quality Payment Program (QPP), they differ significantly in structure, risk, and opportunity.
This article breaks down MIPS and APMs in simple terms, compares their pros and cons, and helps you decide which option may be the better fit for your practice in 2026.
Understanding the Quality Payment Program (QPP)
The Quality Payment Program was created by Medicare to shift healthcare from volume-based to value-based care. Under the QPP, eligible clinicians can participate in one of two tracks:
- Merit-based Incentive Payment System (MIPS)
- Advanced Alternative Payment Models (APMs)
Both aim to reward high-quality, cost-effective care, but they take very different approaches.
What Is MIPS?
MIPS is the default path for most clinicians participating in Medicare. If you do not qualify for an Advanced APM, you are automatically placed into MIPS.
Under MIPS, clinicians receive a performance score based on four categories:
- Quality
- Cost
- Promoting Interoperability
- Improvement Activities
Your final MIPS score determines whether you receive a positive payment adjustment, a negative adjustment, or no adjustment at all on future Medicare payments.
How MIPS Works in Practice
- You continue billing Medicare fee-for-service
- You submit data annually
- CMS compares your performance to national benchmarks
- Payment adjustments are applied two years later
In 2026, MIPS remains familiar, but it is also becoming more demanding, with higher performance thresholds and tighter scoring.
What Are Advanced APMs?
Advanced Alternative Payment Models are designed for practices ready to assume greater responsibility and risk in exchange for greater rewards.
Instead of being scored individually, as in MIPS, Advanced APM participants are paid under population- or episode-based care models. Examples include:
- Accountable Care Organizations (ACOs)
- Bundled payment models
- Certain primary care and specialty models approved by CMS
Clinicians who meet participation thresholds can become Qualifying APM Participants (QPs).
Benefits of Being a QP
If you qualify, you:
- Are excluded from MIPS
- Receive a higher Medicare payment update
- Gain more predictable reimbursement
- Focus more on care coordination and outcomes
However, Advanced APMs also require practices to accept financial risk if costs exceed targets.
Key Differences Between MIPS and APMs
To understand which path is better in 2026, it helps to compare them across several key areas.
1. Financial Risk and Reward
MIPS
- Low financial risk
- Payment adjustments are capped
- Bonuses depend on relative performance
- Penalties apply if scores fall below the threshold
APMs
- Higher financial risk
- Potential for shared savings
- Losses possible if spending targets are missed
- Long-term earning potential can exceed MIPS
Takeaway: MIPS is safer, while APMs offer higher upside for well-prepared practices.
2. Reporting and Administrative Burden
MIPS
- Annual reporting is required
- Measures and rules change frequently
- Documentation can be time-consuming
- Smaller practices often struggle with compliance
APMs
- Reporting is often handled at the model or entity level
- Fewer individual clinician reporting requirements
- Greater focus on outcomes rather than individual measures
- Requires strong data infrastructure
Takeaway: MIPS can feel more burdensome year over year, while APMs shift work upfront but reduce ongoing reporting stress.
3. Predictability of Payments
MIPS
- Payment adjustments vary annually
- Performance benchmarks can shift
- Revenue uncertainty remains high
APMs
- More stable payment structures
- Often include care management fees
- Better long-term financial predictability
Takeaway: APMs offer more consistency, which is valuable for budgeting and growth planning.
4. Practice Size and Resources
MIPS
- Easier entry for small and solo practices
- Lower upfront investment
- Can be challenging without reporting support
APMs
- Often favor larger or well-organized groups
- Require care coordination, analytics, and leadership
- Smaller practices may succeed through partnerships or ACOs
Takeaway: Practice size matters, but collaboration can make APMs accessible even for smaller groups.
What’s Changing in 2026?
Several trends make the MIPS vs APM decision more critical in 2026.
Rising MIPS Performance Thresholds
CMS continues to raise the bar for what counts as average performance. This means:
- More clinicians face penalties
- It is harder to earn top bonuses
- Reporting accuracy matters more than ever
Increased Push Toward Value-Based Care
CMS has clearly stated its goal to move most Medicare beneficiaries into value-based arrangements. Advanced APMs align more closely with this long-term vision.
Technology and Data Expectations
In 2026, practices are expected to:
- Use interoperable EHR systems
- Track quality and cost metrics
- Demonstrate care coordination
These expectations support APM participation but can strain MIPS-only practices.
Which Path Is Better for Your Practice?
There is no one-size-fits-all answer. The better option depends on your practice goals, readiness, and risk tolerance.
MIPS May Be Better If:
- You are a solo or small practice with limited resources
- You prefer minimal financial risk
- You are comfortable with annual reporting
- You want flexibility without long-term commitments
MIPS can still work well in 2026, but only if you actively manage performance and reporting.
APMs May Be Better If:
- You are part of a group, health system, or ACO
- You have strong care coordination processes
- You can manage financial risk
- You want predictable payments and long-term stability
- You are committed to value-based care transformation
For many practices, APMs represent the future of reimbursement, not just an alternative to MIPS.
A Practical Decision-Making Framework
Before choosing, ask yourself these questions:
- Do we understand our cost and quality data?
- Can we manage downside financial risk?
- Do we have leadership support for change?
- Are we prepared to invest in care coordination?
- Would predictable payments help our practice grow?
If most answers are yes, an Advanced APM may be the right move.
Final Thoughts: Planning for Success in 2026
In 2026, the choice between MIPS and APMs is no longer just about compliance. It is about strategy.
- MIPS remains a viable option for practices seeking flexibility and lower risk, but it requires constant attention to scoring and reporting.
- Advanced APMs offer a clearer path toward value-based care, with higher potential rewards and greater financial stability for prepared practices.
The best path is the one that aligns with your practice’s capabilities, goals, and vision for the future.
By understanding the differences now and planning proactively, your practice can not only survive but thrive in the evolving healthcare landscape of 2026.