Independent practice association
Encyclopedia
An independent practice association (or IPA) is 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 may contract with an IPA which in turn contracts with independent physician
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
or may 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 to exert political influence upward within the medical community to effect positive change.
While there is 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 do this 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.
Fee-for-service
Fee-for-service 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 of care...
basis.
An HMO
Health maintenance organization
A health maintenance organization is an organization that provides managed care for health insurance contracts in the United States as a liaison with health care providers...
or other managed care
Managed care
...intended to reduce unnecessary health care costs through a variety of mechanisms, including: economic incentives for physicians and patients to select less costly forms of care; programs for reviewing the medical necessity of specific services; increased beneficiary cost sharing; controls on...
plan may contract with an IPA which in turn contracts with independent physician
Physician
A physician is a health care provider who practices the profession of medicine, which is concerned with promoting, maintaining or restoring human health through the study, diagnosis, and treatment of disease, injury and other physical and mental impairments...
s to treat members at discounted fees or on a capitation
Capitation
Capitation can refer to:*Poll tax, or head tax, a tax of a fixed amount per individual*Capitation , a system of payment to medical service providers...
basis. The typical IPA encompasses all specialties, but an IPA can be solely for primary care
Primary care
Primary care is the term for the health services by providers who act as the principal point of consultation for patients within a health care system...
or may be single specialty.
IPAs are typically formed as an LLC
Limited liability company
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...
, S Corp
S Corporation
An S corporation, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code....
, C Corp
C corporation
C corporation refers to any corporation that, under United States income tax law, is taxed separately from its owners. It is distinguished from an S corporation, which is not taxed separately. Most major companies are treated as C corporations for U.S. income tax purposes.-C corporation vs...
, 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 to exert political influence upward within the medical community to effect positive change.
While there is 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
Federal Trade Commission
The Federal Trade Commission is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act...
Act they cannot do this 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
Employer identification number
Applicable to the United States, an Employer Identification Number or EIN is the corporate equivalent to a Social Security Number, although it is issued to anyone, including individuals, who has to pay withholding taxes on employees.-Other names:Also known as the Tax Identification Number ,...
which is not an IPA model.