How To Start An Ipa


How to Start an IPA?

By: Dr. Pariksith Singh, MD, Feb 13, 2018

An Independent Provider’s Association (IPA) is a coming together of various providers for a particular purpose, usually to gain an advantage in contracting, to leverage economy of size and volume, and to create a platform for working as a single entity. It is only natural for any provider to aspire to start his or her own IPA and climb up the value scale.


However, in the real world I see a lot of small IPAs coming up without the required due diligence and the necessary infrastructure. These entities create possible profits for themselves but at a  risk of failure by possibly running afoul of Federal and State requirements or breaching contracts or, simply running in a financial deficit for which they may be financially responsible.


So I compiled a loose and tentative checklist on what I think should be taken under consideration when creating an IPA. I realize that by sharing this information I might be reducing the growth of my own IPA. Yet, the possibility of failure and, even ruin, of fellow providers is something none of us wants to see as peers and fellow practitioners. That is why, in the spirit of gratitude and camaraderie towards my affiliate or unaffiliated providers, I share what little I know. These are the important checks one must have in place:


  1. Know your law: The PIP guidelines from the Center for Medicare and Medicaid Services can be onerous. One must know this before contemplating creating an IPA. Also, one must know State laws regarding Financial Intermediary Service Organizations (FISO) for an IPA is considered to be one. That means the IPA needs to register and be licensed with the State to function as one. Each state has different rules and it is critical to be aware of these.


  1. Know your people: An IPA is more than just an organization consisting of providers. It needs to have people running it who are well-versed in accounting, office and business management, relationship management, legalities, human resources, and operations. An IPA also needs subject matter experts (SMEs) in compliance, care management, credentialing, contracting, quality, information technology (IT), marketing and sales, auditing and billing, education, care coordination centers, networking, data management, and pharmacy benefits management. In this rapidly transforming market, it is critical for the leadership in an IPA to be cognizant of the changes in the industry and to be able to adapt to them rapidly. Similarly, the consultants involved should only be the best in the business, whether they are lawyers or managed care advisers or mentors.


  1. Know your products: An IPA is more than a conglomeration, a group of people holding hands due to fear or greed. It has specific offerings and mastery of these, such as Health Maintenance Organizations (HMO), Preferred Provider Organization (PPO), Private Fee for Service group (PFFS), Medicaid products, commercial contracts, or ACO business lines is an absolute must. An IPA can theoretically outsource some of its products such as IT or auditing or data management to other organizations or leverage with other IPAs to use their SMEs to fill its gaps.


  1. Know your services: An IPA usually serves as an entity that down-streams contracts with an HMO to providers. In this arrangement, several aspects of health care get involved. An IPA may not influence medical decision making from providers but should create a model where good medicine becomes good business. Any service such as credentialing or marketing offered by the IPA can be isolated and modular or the entire package can be offered as a back-office resource to practice.


  1. Know your platform: The big challenge in health care today is the lack of interoperability of the data. This starts from the electronic medical records (EMRs) to care management modules to billing reconciliations and gap analyses since these products do not talk to each other seamlessly. Bringing all this data together is a serious challenge and the IPA needs to know its weaknesses and strengths and should try to create or leverage platforms that give it real-time data feedback and analytics.


  1. Know your eco-system: Every health care environment is locally unique, influenced by the health plans, hospitals, specialists, vendors, and patient populations and circumstances. An in-depth awareness of the possibilities and pitfalls, knowing your customers and vendors and facilities, along with contracting help in gaining insight into the parochial dynamics. One also needs to be aware of the changes in regulations, the changes in health technology and industry, and the nuances in transforming relationships with the local players, some of whom may be national.


  1. Know your strategy: What is the vision? How is the mission articulated? What are the objectives and how will they be reached within a clear timeline and sensitive to the consideration of factors critical to delivery along with directly responsible stakeholders? These have to be laid out before the leadership, and preferably, developed by the leadership itself.


In my mind, these are the issues one must consider one by one, deliberately before embarking on the IPA journey. Each of these is critical and must be weighed carefully. Whether to build one’s expertise in the various aspects of IPA management or to leverage the SME of others is something that should be carefully considered.


Over the last few decades I have seen too many failures and near-misses. I believe, if a checklist such as this is developed and adhered to, much of the pain of failure or losses can be mitigated, reduced, or even eliminated.