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IPA Part 2: Clinical Integration

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.

Before I get started on this weeks content, I would like to provide one additional housekeeping perspective. Many of us see IPAs as a way to collectively negotiate with payers, this is certainly what got me interested. However, an IPA will flourish not because they are good negotiators (that's important) or really large (also helpful) but because they can:

  1. Increase quality

  2. Reduce or control cost, redundancy and waste

  3. Increase provider accountability

  4. Improve utilization (of care) management in specific populations


We left off last week with the following thought:

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.

This week I will describe a Clinical Integration IPA (CI-IPA) and what this entity is legally allowed to do and also what they are required to do.

In the eyes of most providers, the immediate advantage of a CI-IPA is that they can negotiate all terms of a contract with a payer including reimbursement. Under most circumstances, this level of collective negotiation would be considered price fixing and would also be a violation of federal anti-trust law.

However, in the eyes of the FTC and Justice department a CI-IPA can become a legitimate "joint venture" by it's members for antitrust purposes and thus would not be subject to the same federal anti-trust law if they can show that the providers in the IPA:

  • Agree to provide services at a capitated rate, or

  • Agree to a significant financial incentive* to achieve cost control goals, or

  • Adhere to utilization management (UM) and quality assurance (QA) activities including:

  • Providers have significant capital investment

  • Monitary

  • Information systems

  • Hire staff and infrastructure for UM and QA activities

  • Develop and implement cost and quality benchmarks

  • Develop educational programs and remedial action to discipline providers who are not in compliance with benchmarks and protocols

  • Selectivity control IPA membership

There are examples of CI-IPAs (MedSouth, GRIPA) that have met the above criteria and function as true joint venture in the opinion of the FTC and Justice Department. The challenge, of course, for independent providers (most ODs) is getting them to adhere to these requirements.


The bottom line:

The large advantage of a Clinical Integration IPA is the ability to negotiate fees on behalf of their members. The main challenge is developing and funding effective programs that will control the cost of care and increase the quality of that care. Additionally, since the CI-IPA shares in the financial reward associated with providing quality care, there is also potential for risk if quality measures do not reduce the overall cost of care.

In Part 3, I will discuss Messenger Model IPAs and the benefits and drawbacks of such a model.

Have a great week - Chris

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