What is an Independent Physician Association (IPA)?

An Independent Physician Association (IPA) is a business entity and network of independent healthcare physician practices. IPAs own and operate their separate practices but enjoy unique advantages. They collaborate with other independent physicians to negotiate contracts, share resources, reduce overhead costs, etc.

This arrangement allows physicians to advocate for those in their IPA network while providing a framework for healthcare delivery. However, they remain independent. Each physician treats their patients within their practice but can also treat additional patients referred to them by those in their IPA. The ultimate goal is to remain efficient and provide valuable care, which is achieved by developing a network of independent physician practices that benefit from the scale of larger organizations. 

Benefits of an Independent Physician Association

There are many benefits of IPAs, especially concerning income and ongoing support. When discussing income opportunities, an IPA can lead to an individual physician seeing more patients, which supports higher income. Also, as part of a larger group of physicians, there is potential for more business and greater negotiation opportunities with insurance companies. 

Regarding support, IPAs help address administrative tasks so physicians can focus more on patient care. Independent physicians often have smaller clinics and fewer human resources. So, having the support of an IPA can help fill the gaps, especially when needing to document clinical guidelines, care protocols, and standards for best practice.

Let's take a closer look at these benefits. 

Administrative Support

IPAs provide administrative support for coding, medical billing, claims processing, and compliance, freeing physicians to focus more on patient care. When implementing a technology infrastructure, like chosen electronic health record (EHR) systems, IPAs can share these resources. By investing in advanced technology and data analytic tools, IPAs can increase access to these shared investments. 

Value-Based Care

Having shared systems in place also supports one of the primary goals of IPAs — value-based care. IPAs often prioritize value-based care initiatives, including performance-based incentives, care coordination, and population health management. By providing infrastructure, IPAs support value-based care initiatives — like risk stratification and care management programs. By improving patient care, they can enhance quality and patient outcomes — this also fosters a culture of quality care. 

Negotiating Power 

IPAs can negotiate better rates with insurance companies for other member physicians. These contract negotiations can potentially lower patient costs and increase provider revenue. While reimbursement rates are often negotiated, this collective power can also be used to address regulatory and healthcare policy concerns. Ultimately, this advantage boils down to independence while enjoying expanding scope. 

What About the Challenges of Independent Physician Associations?

There are many advantages of IPAs. However, today's healthcare landscape creates unique challenges. Including the following challenges, all of which can impact a medical practice's ability to deliver optimal care. It is recommended that you partner with expert consultants to maximize your potential.

• Compliance concerns and healthcare regulations are ever-changing — stay up-to-date and seek support.

• Financial pressures resulting from fluctuating reimbursement rates and increasing operational costs — so take steps to improve revenue cycle management. 

• Coordination challenges and potential resistance to change — seeking consultation when consistency of care or a lack of modernization is a concern. 

• Poor technological integration of EHR systems across varying practices, preventing efficient operations. Again, there are opportunities to improve your EHR and EPM experience. 

Do Independent Physician Associations Accept All Types of Health Insurance Plans?

IPAs generally have contracts with various health insurance plans, including HMOs, PPOs, Medicare, and Medicaid. However, the specific insurance plans accepted may vary depending on the IPA.

Generally, IPAs do not accept all types of insurance plans. Instead, they often focus on specific plans and may not cover all insurance types. Contracting with one company or organization doesn't mean all plans are accepted. For example, contracting with one HMO doesn't mean all HMO plans are accepted.

How Does an IPA Differ from an HMO, PPO, or Medical Group?

When comparing IPAs to HMOs, PPOs, and other medical groups, the main difference is the level of independence. However, there are other distinguishing variables — like who they have contracts with and how those contracts are implemented. 

IPAs vs. HMOs

IPAs and health maintenance organizations (HMOs) both use a network of doctors, requiring members to choose a primary care provider (PCP). The difference is that IPAs maintain independent practices, whereas HMOs often employ doctors. Also, IPAs may contract with several HMOs — whereas HMOs typically have a defined set of contracted providers. 

Bottom line: An IPA is a physician network that contracts with multiple health plans, allowing doctors to remain independent. An HMO is an insurance model that contracts directly with providers or networks like IPAs.

IPAs vs. PPOs

IPAs and preferred provider organizations (PPOs) differ because the latter offer greater flexibility. Members can choose providers and access specialists without referrals. In contrast, IPAs offer less flexibility within their network of coordinated care. However, there is a silver lining in that IPAs tend to focus on stronger patient-doctor relationships. 

Bottom line: A PPO is a type of health insurance plan where patients can see in-network or out-of-network providers. However, IPAs do still offer flexibility (HMOs are the most restrictive). IPAs focus on coordinated care, whereas PPOs allow for more independent management of care. 

IPAs vs. Medical Groups

In medical groups, a managing practice provides a physical space where multiple practitioners and healthcare providers share care duties. Physicians in a medical group are partners and are compensated through monthly salaries, which may include productivity bonuses or incentives. IPAs are not partners and are not responsible for the physicians' compensation. However, being part of a larger group gives physicians more leverage when negotiating contracts for their services or third-party services such as radiology and laboratories.

Bottom line: IPAs operate as more decentralized groups, with independent physicians maintaining their own practices and offices. In contrast, medical groups are large, multi-specialty practices that can provide various services at one location. 

Are There Additional Costs for Patients Using an IPA?

Depending on the IPA model, patients can experience additional costs beyond standard insurance coverage. IPAs use different financial models, including capitation, which is a fixed amount per patient. In most cases, HMOs tend to have the lowest premiums, followed by IPAs. However, the cost of care concerning deductibles, copays, and out-of-pocket maximums can significantly vary. 

One of the benefits of IPAs if that there is some flexibility in seeing providers outside of the network. That said, there can be cost implications of that for patients. 

Why Choose an Independent Physician Association?

Are you trying to decide between private practice and larger health systems? If so, know you're not alone. This process can be challenging for new and experienced healthcare providers alike, especially when facing consent change. 

If you're currently an independent practice,  you're aware of the growing challenges in retaining top talent — not to mention the financial pressures. However, the benefits are significant, especially when considering a lower risk of burnout compared to hospitals and corporations. There is no denying that owning an independent practice empowers you with a higher degree of autonomy — which can enhance patient experience via a higher quality of care. 

Many physicians want to own and maintain independent practices rather than work for larger institutions. However, there are financial considerations—is it financially viable?

Data shows physicians are less likely to work in private care than 10 years ago. Economic, administrative, and regulatory burdens are driving this shift. For many, it becomes less of a choice and more of a necessity, which is why IPAs can be attractive. Being part of a network of independent practices can make you more resilient and support the potential for increased revenue. 

Working with a partner like TempDev can empower you in terms of your unique business, operational, and regulatory needs. Learn more about how TempDev has helped IPAs. Benefit from customized products and ongoing expert support. Taking proactive action can mean the difference between maintaining your practice and having to explore other options outside of independent practice ownership. 

How TempDev Can Help

TempDev's team of NextGen consultants, developers, and trainers supports IPAs. From dashboards and revenue cycle consulting to automation and workflow redesign, TempDev offers the tools and services you need to support and improve your practice's financial future. Find out how we can help today. 

Contact us here or by calling us at 888.TEMP.DEV to get the help you need to support your Independent Physician Association.