What does IPA stand for in Medical billing?

IPA also known as Independent Physician Association, or Independent Practitioner Association,  is an organization  of independent medical professionals bonded by contracts with each other as well as with third party payers,  insurance companies, and Health Maintenance Organizations (HMO) such as Aetna, Blue Cross, Blue Shield, CIGNA,  Health Net and PacifiCare. 

Purpose of IPA 

IPAs are formed to establish an independent corporate structure for better revenue cycle management (RCM),  reduced overhead cost, and improved contractual relationships with employers, accountable care organizations  (ACO), or managed care organizations (MCOs). Additionally, such associations have superior negotiable stands with  insurance companies. 

IPAs are capable of collaborating with a diverse group of medical professionals and other medical entities such as  diagnostic centers, imaging centers, hospitals, and home health agencies to offer a wide variety of medical  assistance within one system. These strategies not only help to widen the range of potential patients, but also  helps in acquiring capital and management resources. 

Various research has proven that health care buyers seek medical assistance from ventures where they can get a  wide variety of medical services and provide promising results with a collaborative approach. For instance,in a health  study it was recently found that associations like IPAs provide three times more medical care to patients  suffering from chronic conditions than the non-participating medical professionals. 

How does IPA work? 

Each member of IPA is contracted with each other as well as with HMOs and other third party payers. IPAs are  then listed in the HMOs directories and are paid a monthly amount, for all the rendered services provided to the  healthcare buyers. IPAs are then liable to distribute payments to the individual medical professionals and other  ventures who have rendered medical services to the patients. 

Requirements of HMO: 

1. Medical Credentialing of every medical professional is required by the HMOs. 
2. IPAs are required to monitor the quality of medical services within the organization. 
3. IPAs are required to follow the federal and state healthcare regulation and submit periodic audits to verify  the same. 

To manage all the necessary steps and documentations, most IPAs outsource medical billing and credentialing  services to medical billing companies like Capline Services. These companies ensure that all the protocols are  met for efficient revenue cycle management. 

Note: Medical professionals who are a part of IPAs can also continue their independent practice and provide  services to the patients outside IPA. 

Benefits of IPA 

1. Superior negotiating stand with HMOs, insurance companies, third party payers, ACOs, radiology, laboratories, and hospital systems. 
2. Better management of EMRs, compliance, and billing records. 
3. Better medical care management and technological facilities. 
4. Strong administrative support. 
5. Independence in deciding the best care for their patients. 
6. Improved services such as long hours, urgent care, outreach services, follow-ups, etc.
7. Improved services including better payroll management, better benefits management, group purchasing,  etc. 
8. Reduced overhead charges. 

Drawbacks of IPA 

1. IPAs, especially newer IPAs, have a risk of underfunding and capitation loss. 
2. HMOs and other third party payers have the authority to reduce payments to the IPAs. 
3. Conflicts between financial gain and better medical care can arise. 
4. The inability of conflict management between medical professionals and association. 
5. Limited medical professionals can lead to the unaffordability of required resources and facilities. 

Points to consider before joining an IPA 

1. IPAs legal structure and process of profit share distribution. 
2. List of offered services within the membership. 
3. List of services that require additional payment. 
4. Types of memberships. 
5. Members’ dues and obligations. 
6. Does IPA require complete integration? 
7. Definition, rules, and regulations of integration. 

How to choose a better IPA? 

1. The Healthcare delivery system of the IPA should be efficient, effective, and have a record of registering  optimal health outcomes for patients. 
2. Financial benefits gained from the improved care should be distributed to the medical professionals who  rendered the services. 
3. Effective communication and management must be established between primary care physicians,  specialists, and hospital systems. 
4. Finances and incremental value within IPA should be transparent and able to obtain contracts with health  plans and payers. 
5. Member medical professionals should be given autonomy to choose the best care for their patients.
6. Protocols around physician equity should be maintained for all the medical professionals.