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

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