In the United States, an independent practice association (IPA) is an association of independent

physician A physician (American English), medical practitioner (Commonwealth English), medical doctor, or simply doctor, is a health professional who practices medicine, which is concerned with promoting, maintaining or restoring health through th ...

s, or other organizations that contracts with independent care delivery organizations, and provides services to

managed care The term managed care or managed healthcare is used in the United States to describe a group of activities intended to reduce the cost of providing health care and providing American health insurance while improving the quality of that care ("man ...

organizations on a negotiated per capita rate, flat retainer fee, or negotiated

fee-for-service Fee-for-service (FFS) is a payment model where services are unbundled and paid for separately. In health care, it gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality ...

basis.Margaret E. Lynch, Editor, "Health Insurance Terminology," Health Insurance Association of America, 1992, Peter R. Kongstvedt, "The Managed Health Care Handbook," Fourth Edition, Aspen Publishers, Inc., 2001

Operation

An HMO or other

plan can contract with an IPA, which in turn contracts with independent care providers or

s 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 Primary care is the day-to-day healthcare given by a health care provider. Typically this provider acts as the first contact and principal point of continuing care for patients within a healthcare system, and coordinates other specialist car ...

, could be single specialty, or could be a set of other care providers such as psychologists or even providers of social services such as food pantries, homeless shelters, or substance use disorder treatment facilities. IPAs are typically formed as an

LLC A limited liability company (LLC for short) is the US-specific form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a ...

, 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 care providers in self-directed groups within a geographic region to invent and implement health improvement solutions, form collaborative efforts among care providers to implement these programs, and exert political influence upward within the 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 providers' 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 Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The i ...

and can only do so if the providers have reorganized under a single tax ID number which is not an IPA model.

Benefits and drawbacks

Benefits

Joining an IPA allows a care provider to focus on providing care. Many IPAs offer management services organization (MSO) amenities including

payroll A payroll is the list of employees of some company that is entitled to receive payments as well as other work benefits and the amounts that each should receive. Along with the amounts that each employee should receive for time worked or tasks pe ...

bookkeeping Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organizations. It involves preparing source documents for all transactions, operations, and other events of a business. ...

, benefits management, group purchasing,

compliance Compliance can mean: Healthcare * Compliance (medicine), a patient's (or doctor's) adherence to a recommended course of treatment * Compliance (physiology), the tendency of a hollow organ to resist recoil toward its original dimensions (this is a ...

marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to empha ...

, and online reputation management. IPAs may also offer care providers an information technology platform offering automation and/ or a connection to an

Electronic Health Record An electronic health record (EHR) is the systematized collection of patient and population electronically stored health information in a digital format. These records can be shared across different health care settings. Records are shared throu ...

(EHR) system. Additionally, IPAs structured as risk-bearing entities can give interested care providers 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 care provider strength in numbers, having dozens to thousands of providers represented together gives a single care provider the ability to participate in programs that would otherwise not be available.

Drawbacks

There are significant potential drawbacks that may be associated with IPAs as well. Joining an IPA will not relieve a care provider from all of the administrative duties of running a medical practice or other care delivery organization. Also, some IPAs may not be run 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 Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...

issues because they may represent competing healthcare providers.

References

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Bibliography

* American Public Policy: An Introduction 7th Edition * Essentials of Managed Care, 4th Ed, Peter Kongstvedt * De Wolf W, and A Stanten. 1995. "The Independent Practice Association". ''JAMA : the Journal of the American Medical Association''. 274, no. 22: 1761. * Roth M. 1979. "Is an Independent Practice Association for You?" ''Physician's Management''. 19, no. 1: 42–6. * 2002. "LATE - REGULATORY PRECEDENT - The FTC OKs a Deal That Would Allow a Physician Independent Practice Association to Contract with Health Plans on Behalf of Its Competing Physicians". ''Modern Healthcare''. 32, no. 8: 6. Medical and health organizations based in the United States Managed care