Independent practice association
An independent practice association (or IPA) is a US term for an association of independent physicians, or other organization that contracts with independent physicians, and provides services to managed care organizations on a negotiated per capita rate, flat retainer fee, or negotiated fee-for-service basis.
An HMO or other managed care plan can contract with an IPA, which in turn contracts with independent physicians to treat members at discounted fees or on a capitation basis. The typical IPA encompasses all specialties, but an IPA can be solely for primary care or could be single specialty.
IPAs are typically formed as an LLC, S Corp, C Corp, or other stock entity. Their purpose is not to generate a profit for the shareholders although this can be done. The IPA assembles physicians in self-directed groups within a geographic region to invent and implement healthcare solutions, form collaborative efforts among physicians to implement these programs, and exert political influence upward within the medical community to effect positive change.
Despite a perception that IPAs have been formed to negotiate as a group with insurance companies in an attempt to improve rates of compensation, under the Federal Trade Commission Act, they cannot negotiate as a group with insurance companies for the physician's other insurance reimbursement. The IPA can only negotiate for the IPA members those services which are contracted on capitated members. "Messengers", specialists who are selected to represent individual practices, can be used by IPA members to review and discuss coding and compensation with health insurance companies. These professionals do not collectively bargain and can only do so if the doctors have reorganized under a single tax ID number which is not an IPA model.
Benefits and Drawbacks
Joining an IPA allows a physician to focus on providing care. Many IPAs offer management services organization (MSO) amenities including payroll, bookkeeping, benefits management, group purchasing, compliance, marketing, and online reputation management. IPAs may also offer physicians an information technology platform offering automation and/ or a connection to an Electronic Health Record (EHR) system. Additionally, IPAs structured as risk-bearing entities can give interested physicians the ability to participate in risk contracts even if they don't have the administrative staff to coordinate them. Most importantly, an IPA offers a physician strength in numbers, having dozens to thousands of physicians represented together gives a single physician the ability to participate in programs that would otherwise not be available.
There are significant potential drawbacks that may be associated with IPAs as well. Joining an IPA will not relieve a physician from all of the administrative duties of running a medical practice. Also, some IPAs may not be ran effectively; this can be due to rapid growth, lack of a sufficiently experience management team, or rapidly changing technology in the field. It is also possible for IPAs to face antitrust issues because they may represent competing healthcare providers.
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