Healthcare

What is an IPA in Healthcare? - Independent Physician Associations

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October 13, 2021

An IPA (Independent Physician Association) represents independent physicians who want to avoid the politics and noise of more extensive health care facilities but want to provide personalized care for their patients with access to the best resources to improve the quality of care.

What is an IPA?

Independent physician associations, also known as independent practitioner associations, are created by groups of doctors that join together to contract with Health Maintenance Organizations (HMOs), Accountable Care Organizations (ACOs), and Management Care Organizations (MCOs). 

Medical practices that want to give quality care but need additional resources and experience to be at the forefront of value-based care are attracted to an IPA. IPAs allow providers to participate in risk contracts even if they lack administrative resources to do so.

It can involve collaboration among primary care physicians, other specialties, or both. They can also cover a defined local area (most common) or several geographical regions. An IPA may also organize as a Clinically Integrated Network (CIN) to improve patient care, decrease healthcare costs, and adapt to the value-based market.

How does an IPA Work?

HMOs or other managed care plans contract with IPAs, and those IPAs in turn contract with independent healthcare providers to provide members with care at a discount or a uniform fee. 

In its traditional form, an IPA includes all specialties. Still, an IPA can be exclusively for primary care, could consist of one type of service, or could involve a group of providers of other benefits as well, such as food banks, homeless shelters, and substance abuse treatment centers.

Since IPAs are self-supporting entities and are not involved with large medical corporations, physicians have full authority to their own offices and practices. 

The practitioner can tend to patients inside or outside an affiliated health maintenance organization (HMO). Healthcare providers receive compensation based on a per-patient fee schedule or discounted fee schedule. Therefore, regardless of how many times their patients go in, they still get paid.

The IPA and HMO contract defines the responsibilities of the IPA as it pertains to complying with government and industry regulations and allowing patients to access physicians. Each physician has a similar agreement with the IPA. In the absence of these contracts, IPA physicians will not receive payment for services provided to HMO patients.

IPAs are not allowed to negotiate with insurance companies on behalf of providers' other insurance reimbursements under the Federal Trade Commission Act despite a perception that they have established to improve compensation rates. IPA can only negotiate for members for services contracted on a capitation basis.

Benefits of IPA

The following are some benefits possible from properly functioning IPAs:

  • A well-developed ability to negotiate effectively and efficiently with payer organizations and health insurance companies to reduce each member's or patient's annual premiums
  • Expanding services include extended hours, urgent care, prevention outreach programs, triage by phone, and follow-up expertise.
  • An integrated approach to managing healthcare records and preventing discrepancies and errors
  • Maximizing administrative and management facilities and technologies
  • The capability to easily step into the role of responsible care organizations (ACOs) when needed 

Drawbacks

As well as IPA benefits, there are potential drawbacks. Being a member of an IPA will not remove a care provider from their duties as an administrator within a medical practice. 

Some IPAs may also not be run efficiently due to rapid growth, low levels of management experience, or rapid changes in technology. 

Additionally, IPAs can encounter antitrust concerns since they represent competing healthcare providers.

Guidelines for IPAs

Practitioners considering establishing or participating in an IPA should study the following principles:

  • The IPA should implement a health care delivery system that delivers improved patient health outcomes.
  • To provide patients with optimal care, promote the success of an IPA, and boost physician satisfaction, it is crucial to effectively manage relationships between primary care physicians, limited specialists, and hospitals.
  • Physician-patient relationships are unique and should be maintained.
  • Health care delivery should be efficient and effective to provide value for patients. These improved care efficiency and productivity should result in financial benefits for healthcare providers.
  • Physicians in the network must be autonomous and accountable to maximize the benefits of an IPA.
  • Participating physicians in IPAs must carefully consider physician equity when maintaining desired degrees of control and autonomy. Incorporating these principles into IPA vision and mission statements may be helpful for physician education.

Although IPAs can help manage costs and improve care, they are not a panacea for the medical system. As they have advantages, so do they have disadvantages.

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