What You Need to Know About Independent Practice Associations (IPAs)

Over the past decade, healthcare employers have seen movement of physicians from solo and independent practice models towards the employed practice model. As the risks associated with the traditional “physician as entrepreneur” model have increased, many physicians are choosing to forgo the autonomy of solo or independent practices for the financial security and administrative support offered by large hospitals and health systems seeking to employ an ever growing number of physicians. This trend has only been accelerated with the implementation of the Affordable Care Act, which has introduced additional red tape and requirements to an already dwindling number of independent practitioners.


While the vast majority of recent graduates indicate with confidence that they will happily take a salaried, hospital employed position, many physicians of the old guard are still reluctant to sacrifice their autonomy for increase stability. In order to remain competitive while keeping their independence, many private practices have banded together to form Independent Practice Associations.


What Is An Independent Practice Association (IPA)?


Originating in the western United States, IPAs are physician-led and organized associations designed to negotiate physician reimbursement with insurance companies on behalf of contracted physicians. Member physicians are often compensated on a capitated or modified fee-for-service model as negotiated by the IPA. 


Benefits of an IPA


Independent Practice Associations offer members multiple benefits by reducing risks and sharing the cost of some expenses. Some major benefits include:


  • Greater bargaining power with insurance companies
  • Eliminate the duplication of expenses such as office management, EMR compliance, case management, and care coordination
  • Ability to convert to an ACO model
  • Option to accept insurance plans not contracted with through the IPA
  • Ability to maintain independence while benefiting from increased administrative support



Physician Recruitment for IPA Member Practices


Many younger physicians are hesitant to consider joining a private practice due to perceptions of high risk and long hours offering poor work/life balance. While older physicians may be more likely to accept positions with private practices, physicians of all ages can be recruited to IPA member practices by highlighting key aspects, such as:


  • Lowered risk and greater stability similar to hospital employed opportunities
  • Access to administrative support and technology made possible through shared expenses
  • Strong physician leadership
  • Increased flexibility and independence for each physician



As healthcare and practice models continue to change over time, new models and solutions to existing problems are likely to rise. While the growing trend of hospital employment is showing no signs of stopping, the independent practice is far from obsolete. For independent practitioners, IPAs offer the opportunity to grow and remain competitive in an ever changing market place through the pooling of resources and bargaining power, helping to keep the idea of the “physician as entrepreneur” alive.


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