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Independent practice association, what you need to know

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IPA (independent practice association), a viable option for independent physicians wishing to build market presence in a rapidly consolidating industry.

IPA (independent practice association), a viable option for independent physicians wishing to build market presence in a rapidly consolidating industry.


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  • 1. Lund-Byrne Associates Independent Practice Associations Pros and Cons The What The Why And…..When
  • 2. Lund-Byrne Associates Changes to the traditional model Wal-Mart to pay for heart and spine surgery for U.S. employees • Wal-Mart Stores Inc. is offering its U.S. employees and their families free heart and spine surgeries at six major health centers at no cost to the retailer’s workers, as it tries to find better ways to cover costly, complicated procedures. • Starting in January 2013, workers and dependents enrolled in Wal-Mart’s medical plans will receive free consultations and care for certain heart and spinal procedures along with travel, lodging and food for the patient and a caregiver.
  • 3. Lund-Byrne Associates Changes to the traditional model Walgreens pharmacy aligns with hospitals to reduce readmissions • Walgreens announced a program this week that it believes will help hospitals reduce readmissions by using pharmacists to coordinate patient care during admission and discharge. • At its core, Walgreens’ program, called WellTransitions, lifts the burden of medicine reconciliation off of the patient, and off hospital staff. About a dozen hospitals are participating in the program now, and Walgreens wants to roll it out nationwide.
  • 4. Lund-Byrne Associates Changes to the traditional model In 2010, Lowe's launched several precedent-setting health benefits. • Introduced a partnership with the Cleveland Clinic in Ohio to offer approved heart surgery procedures at no cost to full-time employees and dependents enrolled in our self-insured medical plan. • Lowe's will cover all medical deductibles and coinsurance amounts, as well as travel and lodging expenses for the patient and a companion, plus concierge services to make the arrangements.
  • 5. Lund-Byrne Associates Changes to the traditional model More Lowes changes……… • In 2011 launched the first national, mobile health-screening tour conducted by an employer exclusively for its employees. • Our two mobile-health units began a 2½-year, 100,000-mile tour crisscrossing the United States to provide more than 70,000 Lowe's employees with free basic health screenings and guidance about how to improve their health. • Each custom-built unit is equipped with a staff of trained medical professionals who screen for blood pressure, total cholesterol, body mass index (BMI) and other key health indicators.
  • 6. Lund-Byrne Associates Leading the way If I had asked people what they wanted, they would have said faster horses. - Henry Ford
  • 7. Lund-Byrne Associates IPA Definitions • An independent practice association (or IPA) is an association of independent physicians • The typical IPA encompasses all specialties, but an IPA can be solely for primary care or may be single specialty • Physicians retain their practice's independent corporate status but become part of a separate organization with other practices to enable them to contract as a group to provide services to payers.
  • 8. Lund-Byrne Associates IPA Functions The IPA contracts with independent physicians and will then provide the services of the physicians to managed care organizations on a negotiated per capita rate, flat retainer fee, or negotiated fee-for- service basis. – An HMO or other managed care plan may contract with an IPA which in turn contracts with independent physicians to treat their members at discounted fees or on a capitation basis. – IPA’s can also contract with hospital systems and Accountable Care Organizations (ACO) to provide services.
  • 9. Lund-Byrne Associates IPA Functions • The IPA will work with its members to improve collective results in case management, managing patient care and the cost of care • Data collection and analysis to ensure contract compliance and value • The IPA can support practices with consolidation of services • The IPA will seek out shared savings for member practices
  • 10. Lund-Byrne Associates History of IPA’s • In the'90s, IPAs were formed for defensive reasons because the health plans were economically credentialing doctors and hospitals. • But many IPAs went bust after capitation rates that were negotiated with plans were insufficient to cover rising physician overhead costs. • Many have endured and The IPA Association of America (TIPAA) has nearly 677 IPAs, in 39 states representing more than 303,000 Physicians. • This model after 10 or 15 years has matured and is much more of an offensive philosophy than defensive.
  • 11. Lund-Byrne Associates History of IPA’s • Now, IPAs are seeing opportunity in ACOs as a way for physicians and the health payers to share savings – (and risk)-- by tying pay for a specific patient population to quality metrics. • The current strategy for IPAs is to attack the gaps in the delivery system to improve accountability. • It is the last viable option for retaining independence in the new world of healthcare
  • 12. Lund-Byrne Associates Organizational Structures • IPAs are typically formed as an LLC, S-Corp, C-Corp, or other stock entity. • There can be owners and there can be sub-contractors • Their main purpose is not to generate a profit for the shareholders although this can be done • The IPA structure will be designed to assemble physicians in self- directed groups within a geographic region: – to invent and implement healthcare delivery solutions – form collaborative efforts among physicians to implement these programs, and – to exert its influence upward within the medical community to effect positive change. • The IPA owners can decide to contract with a management company to provide services.
  • 13. Lund-Byrne Associates IPA sample services • Risk contracting • Negotiations • Marketing • Patient Navigators • Referral services • Case Management • IT services • Data services • Purchasing programs – Clinical supplies – Office supplies – Health care – Liability insurance • Recruitment / Employment services • Call coverage • Billing and collections
  • 14. Lund-Byrne Associates Why an IPA • Many independent physicians don't want to give up control by selling their practices to a hospital or to a larger practice • BUT want the benefits of a larger organization • Many see an IPA as a tool to protect independence, income and life style • Going it alone is becoming increasingly more difficult
  • 15. Lund-Byrne Associates Caveats • IPAs cannot negotiate as a group with commercial insurance companies in an attempt to improve FFS rates of compensation per the Federal Trade Commission Act (AntiTrust) • The IPA can only negotiate for the IPA members for those services which are contracted on risk contracts or capitated services. • "Messengers“ specialists who are selected to represent individual practices, can be used by IPA members to review and discuss coding and compensation with health insurance companies. • An IPA cannot collectively bargain and can only do so if the member physicians have reorganized under a single tax ID number which is not an IPA model. • During early days it requires personal investment in time and money
  • 16. Lund-Byrne Associates Why an IPA • Participating members will have an investment in their own future that can leverage the collective power of all the practices • Retain patients by simplifying access for insurers and patients • Reduce practice costs • Shared operating cost for network management • Allows members to set own standards of care within framework of community expectation • Establish the IPA as a “branded” health service
  • 17. Lund-Byrne Associates Advantages An IPA can perform Network Services for medical practices: • Spreads costs across members for organizing the delivery of care to payers • The IPA can contract with other existing networks (EG: Duke or UNC or ACO’s) • It represents members when establishing complex risk contracts with insurance companies and self-insured companies • Assembles, credentials, and inspects member physicians, institutions and services • Constructs efficient central authorization and referral processes • Establishes primary care provider and specialist responsibilities for patient handoffs • Member physicians are involved with IPA’s own UR/QA
  • 18. Lund-Byrne Associates Advantages Other practice services can be created: • Bill, collects and disburse payment to physicians • Bill, collect and disburse payments to sub-contractor Hospitals • Purchasing discounts for supplies • Pharmacy cost savings • Patient navigator services • Legal and regulatory guidance • Marketing and patient communication • Staff training and education • Recruitment • CME’s
  • 19. Lund-Byrne Associates Advantages Shared costs with technology : • Shared cost of linkages for Electronic Health Records • Secure messaging services • Collect and collate data to assist with Meaningful Use • Provide cost of care data for contract compliance • Resource for IT services for members • Provide training for member practices
  • 20. Lund-Byrne Associates Disadvantages Change itself is uncomfortable! • Can be a perception of trading an insurance company for another oversight body • To reduce practice expenses some existing practice services may need consolidating to the IPA • An IPA cannot represent practices in all commercial contracts • Will enter into RISK contracts where the cost of non participation will cost member physicians money • Requires improved /active communications between members to ensure cost and outcomes of care meet contract requirements • Requires personal investment and commitment
  • 21. Lund-Byrne Associates National Association Albert Holloway, President and CEO of The IPA Assn. of America (TIPAAA) Recently said: “……most are now trying to grow in big ways." The association recently hosted a conference on how IPAs can run ACOs.
  • 22. Lund-Byrne Associates Examples • The Marin-Sonoma IPA in the San Francisco area announced April 11, 2012 that it will grow from about 350 physicians to more than 500. • Four specialty groups in Maine released a statement on Jan. 26, 2012 with details of the formation of the Maine Specialty IPA with more than 250 physicians, the largest in the state. • GRIPA (Greater Rochester IPA) has obtained “Clinical Integration” status from FTC allowing it to negotiate for non risk contracts. • Taconic IPA (Hudson Valley) 4,000 physician members
  • 23. Lund-Byrne Associates Getting started • Agree to form an IPA • Need a minimum of 30 physicians • Require initial investment to form corporate entity and design governance • Need formative physician leadership and administrative support (scaled over time) • Business plan to put in place the mechanics necessary to assist independent physicians acquire and retain market share. • Put the plan into action • Time to complete 6 to 12 months.
  • 24. Lund-Byrne Associates The most effective way to manage change is to create it Peter Drucker
  • 25. Lund-Byrne Associates What next? The cost of not making a decision: • Left out of contracts • Loss of patients to existing networks • Declining revenues • Increasing costs related to data collection and use • Acceptance of any terms of employment that are offered • Practice value is diminished
  • 26. Lund-Byrne Associates What next? The cost of making a decision to create an IPA to guarantee your future: – $$ to be determined What this gets for you: – An ownership stake in the IPA – The ability to help form the rules and regulations for the IPA – A seat at the table for contracts and services – Be a part of an organization that represents your interests – Ability to spread costs across multiple businesses

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