What is an Independent Physician Association and Why Should I Care?

An Independent Physician Association (IPA) is exactly what it sounds like: it’s a group of doctors/medical practices that band together for specific purposes. It is not the same as joining a practice -- far from it. Think of an IPA more as a group purchasing organization than a large practice. Every individual practice in an IPA is very much independent. When I was first starting my practice, I investigated all the IPAs in my market and got advice from several solo practitioners I know who are affiliated with IPAs. No two IPAs offer the exact same services, but there are some general commonalities. 

In general, an IPA should provide the following services: 

• Negotiate with insurance companies

• This should lead to higher reimbursement for your commercial plans

• Have group discounted rates for some vendors

• Some examples are for medical supplies, staff recruitment, collections agencies, billing agencies, etc

• Credentialing

• A centralized credentialing service for insurance companies with which the IPA is contracted

• Not infrequently, an IPA will help you get on a lot more narrow network plans than you can get on your own

• Contract support

• If your practice is unable to resolve a dispute with an insurance company, your IPA should have the resources to assist you with this 

• Help you meet reporting requirements

• Some IPAs are structured to help you comply with CMS reporting requirements and be in compliance with MIPS/MACRA. 

In my view, the major upside of an IPA is the increased reimbursement and support when dealing with insurance companies. I have had several instances where my claims have been denied, appealed, denied again, appealed again and still denied. I then had to go through the state Commissioner of Insurance’s office to achieve satisfaction. If I had been part of an IPA, I would have simply turned over the denied claim and asked for assistance (saving me valuable time and numerous headaches). 

So what’s the catch? 

Nothing is perfect, and the same is true of IPAs. You have to read the contracts very carefully before agreeing to anything so that you know exactly what you’re getting into. Every IPA will have different expectations for its member physicians. Someone has to pay for the staff required to provide the services, so there is invariably some sort of application fee, annual dues, and usually an EMR integration fee. As far as I can tell, there is no standard cost for any of these fees (even regionally). 

I have heard of multiple IPAs that do billing for your practice and keep a percentage of gross receipts as the all-in cost. If you have a very low volume practice, this can be an attractive option. The major drawback is that you’ll have to place the financial viability of your practice into the hands of a third party. Also your expenses will be quite variable on an annual basis. I’m a fan of the fixed rate for annual dues. 

You also have to be very aware of unscrupulous business practices by member groups as well as the IPA itself. If the IPA is unable/unwilling to explain where your fees go, that’s a red flag. I’m aware of multiple IPAs that pay out the founders a percentage of the gross annual profits. I don’t blame people for wanting to make some extra money, but I also don’t want to be subsidizing someone else’s salary. 

The other major catch is that every IPA I know about requires its members to take Medicaid. If your practice does not accept Medicaid, make sure that this is not a requirement before signing anything. 

So is an IPA worth it? 

If your practice will take all payers (including Medicaid), then it probably is. It’s at least looking into the IPAs in your state/region and talking to some of the ophthalmologists that are members to see what benefits they get. Any IPA should be able to get you the fee schedule for at least your top 5 CPT codes before signing on the dotted line. I definitely recommend getting that information after you’ve done some negotiating with insurance companies on your own to make sure that you’ve explored all your options before deciding.