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Do You Like IPAs? Here's Why You Should.

Dr. Wolfe is the Chairman of the Board for EyeAssure, an Optometric Independent Physician Association and a wholly owned subsidiary of the Nebraska Optometric Association.

I used to think that IPAs were just an extremely hoppy brew originating from pale malts that I would drink last (or give away... to others who liked them of course) when they were a part of a seasonal variety pack. India Pale Ales are not something that my palate can tolerate.

It wasn't until about 3-4 years ago that I discovered IPA's (Independent Physician Associations) were also a powerful tool that physicians can use to provide value to and collectively negotiate with, third party payers. This is defiantly an IPA that I could love!

As a student and new graduate, I always asked (and heard others ask) why we couldn't come together as a profession and negotiate collectively with insurance companies. Every time this question was asked by me or someone else it was met with a quick "we can't discuss those things within our associations, it is antitrust".

While this answer was (and is) technically correct, it was never followed with the legally appropriate mechanisms that exist so that physicians CAN collectively negotiate. I was never satisfied with the answer since I knew that there had to be some way that physicians who practice in large groups or within hospitals were negotiating their insurance contracts. So, I continued to ask.

Fortunately, one day, I was discussing these frustrations with someone who had a lot of experience negotiating with insurance companies. When I expressed to him that I had been informed that "we can't discuss those things", he simply smiled and said; "that is incorrect". "You just have to know HOW to legally come together as a profession so that you CAN negotiate collectively."

That day was the beginning of a long and exciting journey for our profession. Someday I will describe the vision and process that the Nebraska Optometric Association went through in researching, developing and launching an Optometric IPA, but for now, I want to focus on the general functions of an IPA.

An IPA is a legal entity that unites physicians allowing them to negotiate insurance contracts. IPAs do this by providing VALUE to those insurers which in turn will provide a reason for the payer to add beneficial provisions in the contract with the providers represented by the IPA. There are multiple types of IPAs and IPA classification determines what components of a contract can be negotiated (I will discuss this in Part 2 and 3).

Part of the role that the IPA plays in controlling costs (for the payer) and improving the quality of care include:

  1. Deliver the contract to the provider once it has been negotiated

  • One of the costs of doing business for insurance companies is organizing a provider network. This means that if there are 500 providers of one type (in this case ODs) then that insurance company has to disseminate contracts and communication to 500 different addresses, if an IPA acts as an intermediary then the insurance company can have 1 place to go for these types of contacts.

  1. Credentials providers

  • Similar to the above, if the IPA can credential providers in a manner that is acceptable to an insurance company then that is less work and cost that an insurance company has to spend on credentialing individual providers.

  • This is also a benefit for the physicians since every contract that is negotiated by the IPA would likely include the provision of accepting the IPAs credentialing, so there is no need to re-credential for every contract that is accepted by the physician.

  • Additionally, this allows a favorable intermediary (the IPA) to act on behalf of the providers in the case that there are questions that arise during credentialing.

  1. Implements utilization management (UM)

  • As I discussed in a prior post, payers look at a distribution of codes and procedures for outlier providers who utilize these codes at a level that deviates from the norm. This can be a significant cost to the insurance company. It can also be difficult for the insurance company to determine if the outlier is legitimate (as in the case of a provider who sees only complicated glaucoma patients compared to the general primary care optometrist) or an aggressive biller.

  • Since the IPA performs the UM they determine legitimate outliers versus aggressive billers. I would much rather have an optometric committee evaluating my care than a professional auditor since other ODs will understand the care of patients better than non-clinicians.

The bottom line:

It is perfectly LEGAL for ODs to collectively negotiate, but they can not do it informally, they must form an Independent Physician Association to do this work on their behalf.

In Parts 2 and 3, I will discuss the specific differences between Messenger Model IPAs and Clinical Integration IPAs and the benefits and drawbacks of each.

Have a great week - Chris

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