Management Consulting/hospital management
describe the term of IPA s?
•IPAs are typically formed as an LLC, S-Corp, C-Corp, or other stock entity.
•There can be owners and there can be sub-contractors
•Their main purpose is not to generate a profit for the shareholders although this can be done
•The IPA structure will be designed to assemble physicians in self-directed groups within a geographic region:
–to invent and implement healthcare delivery solutions
–form collaborative efforts among physicians to implement these programs, and
–to exert its influence upward within the medical community to effect positive change.
•The IPA owners can decide to contract with a management company to provide services.
IPA sample services
•Recruitment / Employment services
•Billing and collections
Many independent physicians don't want to give up control by selling their practices to a hospital or to a larger practice
•BUT want the benefits of a larger organization
•Many see an IPA as a tool to protect independence, income and life style
•Going it alone is becoming increasingly more difficult
•IPAs cannot negotiate as a group with commercial insurance companies in an attempt to improve FFS rates of compensation per the Federal Trade Commission Act (AntiTrust)
•The IPA can only negotiate for the IPA members for those services which are contracted on risk contracts or capitated services.
•"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.
•An IPA cannot collectively bargain and can only do so if the member physicians have reorganized under a single tax ID number which is not an IPA model.
•During early days it requires personal investment in time and money
Participating members will have an investment in their own future that can leverage the collective power of all the practices
•Retain patients by simplifying access for insurers and patients
•Reduce practice costs
•Shared operating cost for network management
•Allows members to set own standards of care within framework of community expectation
•Establish the IPA as a “branded” health service
An IPA can perform Network Services for medical practices:
•Spreads costs across members for organizing the delivery of care to payers
•The IPA can contract with other existing networks (EG: Duke or UNC or ACO’s)
•It represents members when establishing complex risk contracts with insurance companies and self-insured companies
•Assembles, credentials, and inspects member physicians, institutions and services
•Constructs efficient central authorization and referral processes
•Establishes primary care provider and specialist responsibilities for patient handoffs
•Member physicians are involved with IPA’s own UR/QA
Other practice services can be created:
•Bill, collects and disburse payment to physicians
•Bill, collect and disburse payments to sub-contractor Hospitals
•Purchasing discounts for supplies
•Pharmacy cost savings
•Patient navigator services
•Legal and regulatory guidance
•Marketing and patient communication
•Staff training and education
Shared costs with technology :
•Shared cost of linkages for Electronic Health Records
•Secure messaging services
•Collect and collate data to assist with Meaningful Use
•Provide cost of care data for contract compliance
•Resource for IT services for members
•Provide training for member practices
Change itself is uncomfortable!
•Can be a perception of trading an insurance company for another oversight body
•To reduce practice expenses some existing practice services may need consolidating to the IPA
•An IPA cannot represent practices in all commercial contracts
•Will enter into RISK contracts where the cost of non participation will cost member physicians money
•Requires improved /active communications between members to ensure cost and outcomes of care meet contract requirements
•Requires personal investment and commitment
Independent Practice Associations (IPAs) can eliminate the isolation, headaches, risks, and expense associated with independent private practice, while preserving your independence. IPAs can eliminate much of the duplication of expenses, such as office management, EHR compliance, coordinated care systems, and case management systems, and certain IT hardware.
As state and federal governments seek to encourage cost savings measures which are equal parts “carrot” (shared savings plans or accountable care organizations) and “stick” (fraud and abuse enforcement) now more than ever, circling the wagons through the formation of IPAs would seem to be clearly indicated. There are several types of IPAs, with different characteristics and goals. Not all are created alike — so you will need to be aware of the differences.
The most common type of IPA , are those in which the IPA negotiates a managed care contract under a capitated HMO-style medical services agreement. These are also the type of existing IPAs which are most readily able to convert to an ACO model, because they are accustomed to capitated risk-sharing models.
In other areas of the country, IPAs were initially thought to be a useful way to collectively bargain for higher payments under fee-for-service insurance plans. The idea was that physicians could band together and refuse to treat patients in a town unless the insurance plan agreed to meet the IPA members agreed upon minimum price. If enough physicians banded together, the insurance plan would have no choice but to meet the IPA’s terms. While this seemed like a great idea to the physicians, it is what the FTC termed in 2005, a text-book example of “wheel and spoke” criminal horizontal price fixing under the Sherman Anti-Trust Act. Here's a very good summary of what the FTC considers illegal.
In part, because price fixing is illegal, IPAs in non-HMO country began to focus upon benefits of sharing of costs, and administrative overhead for independent physicians. Today, the government is pushing everyone toward HMO- style shared savings ACOs. IPAs which become clinically integrated could provide the very model for this change.
As a physician considering joining an IPA, before you sign anything, you should consult a healthcare attorney to review all documents. IPA agreements are notorious for being short and seemingly simple on the front end, while incorporating by reference many other documents which you agree you have read and understood, when you really haven’t, and you really don’t. (Under contract laws in most states, you are bound by anything you should have read before signing, but failed to do so.) An experienced a health lawyer can also ensure that Stark Law and Anti-Kickback Statute issues have been addressed in the contracts.
There will be much more in the coming months on the conversion of IPAs into ACOs in Physicians Practice.com.
independent practice associations