The Difference Between IPA & MSO


The Difference between IPA and MSO?

By: Dr. Pariksith Singh, MD, Nov 18, 2017

What is the main point of dissimilarity between an IPA (Independent Providers’ Association) and an MSO (Management Service Organization)? There seems to be a lot of confusion and the two terms are often used interchangeably.

An IPA is a coming together of providers to collectively provide health plans with the opportunity to connect with multiple practices at the same time notwithstanding that participation is voluntary and negotiations may be separate as between each practice and the plan. There are special "safety zone" rules that allow certain communications between competing practices and the use of a common IPA or consultant that IPA members can take advantage of collective bargaining or even communications without a proper IPA vehicle and appropriate procedures can create serious anti-trust issues and should be avoided. An IPA is a contracting entity – it holds managed care contracts and develops a provider network to service the contract. 

An MSO is an organization that improves the efficiency of a health care practice or entity and can serve as a management platform. The Corporate Practice of Medicine regulations dictates that only a licensed health care provider can practice medicine and may not be unduly influenced by financial or any other considerations. An MSO can do almost anything for a health care concern except practice medicine if it is not being rewarded for providing patients in exchange for compensation. An MSO is a management company that manages practices.

Often, the two words IPA and MSO are confused between each other. It is important to understand the subtle differences between the two.

Having said this, an IPA can be an MSO, i.e., do anything that helps in improving the efficiency of a doctor’s office, say, help with billing, contracting, records management, compliance or quality reviews, care management, etc.

An MSO can also function as an IPA if it signs up affiliate practices or hires providers and brings them under one umbrella under its Tax Identification Number as an entity that can contract with various payers or insurance companies.

Any MSO or IPA and its members/clients should be careful to assure knowledge of the state and federal laws that govern these relationships, and that there will be compliance by all parties thereto.

I am grateful to Alan Gassman, Esq for valuable input and insights in this complex issue.

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