Is Joining an IPA for You?

Tweet This Kareo StoryAs physicians look at whether to stay independent (or start an independent private practice), there are many options to consider and questions to ask. One of these is whether or not to join a group like an Independent Physician Association (IPA).

Also known as an Independent Practice Association, these groups can often take some of the risk off your shoulders while also providing costs savings and even some care coordination opportunities.

Typically, IPAs serve to negotiate contracts with insurance companies on the behalf of their members. Participating physicians are usually paid on a capitated or modified fee-for-service basis but may also care for patients outside of the insurers contracted through the IPA.

As the industry moves towards more of a value-based model and away from fee-for-service, these groups can be better positioned to make the shift since they are often set up this way already. Their structure also makes them more readily in a position to shift to an ACO model.

Often, the IPA has a staff who do the contract negotiations, disburse payments to participating physicians, and manage other tasks based on the structure of the group. By centralizing many of the administrative costs, using the group’s bargaining power in contract negotiations, and offering other benefits like group purchasing, an IPA can help smaller practices reduce overhead.

In her recent webinar, Taking the Leap: Best Practices to Start Your Own Medical Practice, practice management expert Audrey McLaughlin talked a bit about IPAs. “Determining if you should join one depends on many factors. Often, small practices find IPAs advantageous in achieving savings, support, structure, and networking.”

While your practice remains independent, an IPA is a legal entity and you do sign a contract to join.Tweet this Kareo story
So it is important to be clear on the ins and outs. IPAs can vary widely so read the fine print.

Here are some things to consider before you sign on the dotted line:


  1. Does the IPA have a solid organizational structure? There needs to be an effective Board of Directors, an experienced leadership team, and a well-qualified staff. There also needs to be a large enough staff to manage the aspects of the IPA. Some groups grow too fast without the infrastructure to support that growth. As a result, they may fail—or flail—both of which can hurt the physician members and their patients.
  2. Is there sound fiscal management? You don’t want to join a group that doesn’t manage its money well or spends more than it earns. You should ask to see the financials and have someone walk you through the budget, profit and loss, and long term plans for financial success.
  3. Are the business operations and service style a match? You want to be part of an organization that reflects your values. Don’t get into bed with a group that has a radically different approach to customer service or management than what you are comfortable with.
  4. Information Technology: Does everyone in the IPA use the same practice management and EHR technology? How is that paid for? What is involved in making the switch? What is the cost to your practice? Ask all these questions and gets a hands on demonstration of any software you’ll have to use.

One last piece to think about before you join an IPA is whether or not you are comfortable giving up some control to reduce some of your risk and management responsibilities. There are always pros and cons. If you are more comfortable having a lot of control over which payers you contract with, negotiating those contracts, and being involved in the details of your billing and administrative tasks, an IPA might not be for you. However, if your most interested in providing care and would prefer to hand off more of those tasks to someone else than an IPA might be the right fit. Because an IPA functions like a larger medical group, it can also help you to grow a small or new practice faster.

An IPA could be a great fit to help you manage and grow your practice, but always invest the necessary time to look at every angle before you commit yourself.


About the Author

Lea writes educational articles to help medical practices improve their businesses. In addition to Kareo, Lea has written for Medical Manager Health Systems, WebMD...

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