Independent Practice Associations Take on New Role in ACOs

April 24, 2012

What can an IPA do for your medical practice? Hear what two physicians have to say.

Independent practice associations (IPAs), which have represented the interest of physician practices for years, are now coming into the spotlight again for their role in helping practices join and form collaborative care groups, such as accountable care organizations (ACO), and achieve shared savings. So what can an IPA do for your practice?

We asked family practitioner Steven Davis, medical director of Torrance, Calif.-based HealthCare Partners, IPA, and physician Wayne Pan, chief medical officer of Individual Practice Association Medical Group of Santa Clara County, Calif. (SCCIPA), to tell us more about the role of IPA in today’s ACO-minded world.

A full question-and-answer exchange follows. 

Q: What is the role of an IPA in an emerging ACO world?

Davis: I believe for small/solo practices to achieve savings and do well in quality, the support of what the IPA provides is just as important as what it provides in the HMO setting. The IPA has coordinated care systems and case management systems that the small practice will never be able to build, and personnel to link the communications and systems between the patient and doctor

Pan: For many years, in fact, IPAs have been aligning physicians to achieve a wide variety of goals - including managed care-style models for reducing costs and increasing quality of care. Compared to many hospital-led ACO initiatives, therefore, practice associations have an advantage - hospitals may have to build from the ground up when coordinating diverse groups of physicians and specialists in the community, while provider groups often already have the structure in place, including arrangements with regional hospitals and health networks. In addition, many IPAs have had extensive experience working within risk-bearing arrangements for some time now, making them ripe for ACO development which incorporates similar shared savings concepts.

 
Q: Has the role changed from what IPAs did in the past?

Davis: IPAs are not just a contracting entity as in the past. They have emerged as a supportive organization to bring structure and tools to small/solo offices so they can participate in coordinated care, which is the future of medicine. The effort is to bring added value to the practicing physician that facilitates the care of his or her patients, and fulfill the care-management and reporting obligations that could otherwise be too burdensome.

Pan: The ACO environment - whether it involves participation in the CMS Shared Savings Program, a commercial ACO, or other model of coordinated care - has created a significant opportunity for IPAs nationwide. Because so many have been operating as risk-bearing organizations and managing the care of large patient populations within extensive provider networks, IPAs are very well positioned to take a lead role in the development of similar networks across the country.

Many associations have also been paying attention to the deployment and use of healthcare IT among their associated providers. This is a huge benefit, largely because implementation of technology in provider offices for tracking of various metrics (quality, cost benchmarking, and demographics) will be absolutely critical to the operation of a successful ACO. Many IPAs, like SCCIPA, have been using IT to facilitate authorizations, in-network referrals, and case and utilization management for years.

Q: How can an IPA help practices participate in ACOs?

Davis: Besides all the structure, tools, and support, the IPA brings the strength of size and critical mass that allows the small practice to participate in larger group arenas such as ACOs.  Beyond their clinical care management, they provide the contracting, analytics, and business logistics to build, qualify, and sustain an ACO. This complete clinical and business picture is not readily available to most small practices or even some other forms of health care organizations that will try to form ACOs.

Practices will be approached by many organizations to participate in an ACO. They should be selective and decide which organization has the history of performance in the metrics being asked to achieve and  whose incentives are aligned with the small practice physician. You’ve got to pick the right horse to ride.  Since the IPA serves the small practice and has the track record and infrastructure for care coordination already in place, it is a natural choice. 

Pan: IPAs are in an excellent position to align practices with an ACO model, largely because they can take the lead in payer negotiations, and are equipped to support practices with the level of coordination and patient population management that is required. Independent practices may have difficulty participating in an ACO as a single entity, although there are CMS programs such as the Comprehensive Primary Care Initiative that provide a path for such circumstances. Many IPAs also are taking the lead in connecting disparate EHR technology used by member providers; coordinating clinical and administrative data to help avoid duplicate tests and other unnecessary medical treatments; and gathering and analyzing benchmarking information.

This is not to say that integrated delivery networks (IDN) are unable to coordinate practices into an ACO model. But the disadvantage is that these large health networks are not physician-led. Because of this, a community-based approach to patient care may be more difficult to achieve. 

Q: What limitations affect an IPA’s ability to help physicians form an ACO? For example, how does an IPA operate around the Stark Law or other legal restrictions?

Davis: The general response I got from asking others as well was that there were no legislative restrictions to IPAs forming ACOs. Being primarily a managed-care contracting entity to begin with, the ACO is just another version of managed-care contracting. They face the same changing regulations and rules of ACOs and challenges to contracting and aligning incentives between partners, but since they are physician organizations they are not in conflict with physicians contracting and forming the ACO.

Pan: There are regional differences that could put some associations at a disadvantage. IPAs in some parts of the country may not be as organized and prepared for a risk-bearing environment. Certain states, like California and Texas, have developed a specific healthcare culture that forced IPAs and managed services organizations (MSOs) to evolve into strong business entities able to negotiate optimal risk-sharing contracts, drive up quality, and manage appropriate utilization. However, some regions still operate almost exclusively in a fee-for-service model, meaning physician groups in these regions don’t have experience dealing with risk-bearing payment structures. Because of this, some associations may lack the negotiating influence and management that has become necessary to coordinate large groups of providers and patients. We may see IPAs in states that are already steeped in managed care take a stronger lead than others in the ACO marketplace.