Medical Billing

# What is IPA in Medical Billing

- November 19, 2024
- Posted by Brian Bertrand

19 Nov

In the world of healthcare, numerous parties, including healthcare professionals, technicians, third parties (e.g., insurance companies), and patients, are linked to each other. Medical billing and coding become complex and messy when done without collaboration with each other. While contracting and billing insurance companies, it is better to negotiate rates for services rendered in the form of provider groups rather than individual providers. It has useful results like universal or same rate for most of the providers and compliance.

Therefore, strategies should be adopted to enhance collaboration and interactions between healthcare providers helping them to make better contracts and also improve patient care. IPA proved to be useful in this regard. You must be thinking what is IPA in medical billing? This guide will provide your insight about the role and benefit of IPA in medical billing. We will also learn how IPA works and its impact on patient care.

## Understanding of IPA in Medical Billing

IPA stands for Independent Practitioner Association to bind independent healthcare providers to each other to develop cooperation and mutual understanding. This organization aims for the betterment of patient care by linking healthcare professionals so they can seek knowledge from each other. Providers can discuss complex health scenarios and make the best management plan. All healthcare professionals act independently in this organization and are bound by contracts to follow the rules and regulations.

Healthcare professionals in IPA can collaborate with other health entities like lab technicians, diagnostic centers, imaging centers, hospitals, and pharmacists to offer medical assistance within one sphere. In medical billing, IPA is also very useful as IPA providers are linked with third parties. IPA provides a superior negotiating stance with insurance companies when providers come together as a single group. Standard rates are fixed for IPA, in which all medical services rendered by providers are billed to the insurers. Insurance companies reimburse the amount to IPA, which is then distributed to the providers based on the number of their services.

## How does IPA work?

In medical billing, IPA acts as a bridge between providers and insurers to maintain billing and reimbursement cycles. Rather than working independently with insurance companies, providers sign contracts with IPA, provide services to the defined population, and get reimbursed according to the agreement. There are two main financial models healthcare providers can adopt:

- Capitation Model: in this model, providers get a fixed amount per patient regardless of the number of medical services rendered.
- Fee for Service Model: In this model, a certain amount is fixed for each medical service, and providers are reimbursed according to the total number of services.

There are some compliance policies that aim to standardize the billing process and ensure legitimacy. According to regulations, providers are contracted with IPA, insurers, and HMOs (Health maintenance organizations). They are listed in the HMO directories and reimbursed after following requirement protocols. As per policies, each healthcare provider is medically credentialed by HMOs. IPA should also maintain the standard of services by each healthcare provider. Periodic audits are done within the organization, and reports are sent to HMOs.

## Benefits of IPA

### 1. Improved Negotiation Power

In the medical billing field, small practices and newly graduated providers are not reimbursed a suitable amount despite a high level of patient care. This is because of the low influence and the new setups. But IPA is a famous organization which links numerous providers and they negotiate collectively with insurance companies. Bargaining power gets enhanced resulting in a good reimbursement amount and favourable terms. Therefore, it is recommended that you become part of IPA if you are practicing as an independent provider.

### 2. Broader Patient Network

IPA includes a pool of healthcare professionals and IPA contracts with larger healthcare networks who have ability to manage such a number of providers. Large healthcare networks also cover a large number of patients. It is clear from this fact that providers in IPA organization have more access to patients and can enhance their revenue cycle and finances.

### 3. Reduced Administrative Burden

Medical billing is a complex and expensive process that involves coding, billing, claim submission, and compliance. This needs human and financial resources, posing a load to the healthcare provider. IPA organization also has billing software and technologies to undergo this process. These technologies can’t be possessed by individual providers as they are very expensive and need experts for use. Thus, IPA helps to streamline the billing and coding process. Collective claim submissions are also made by the IPA, reducing financial and administrative burdens. In this way, healthcare providers can work more effectively and focus on patient care.

### 4. Expertise and Compliance

As medical billing is outsourced, IPA employs experts who remain up-to-date with new rules and regulations to reduce claim denials. Federal and state policies are updated on and off to make the billing process better and effective. IPA experts stay updated with these regulations and show compliance to avoid violation penalties. IPA also helps healthcare providers to work in accordance with billing protocols to reduce claim denials and maximize revenue generation.

## How to become part of IPA?

If you are working as an independent practice, then choosing a suitable IPA organization and joining it can help you boost your practice in terms of finances and quality of patient care. IPA helps providers to collaborate with other providers and third parties like HMOs and insurance companies. Below is our steps to join and remain an essential part of IPA:

### Choose suitable IPA

There are many independent practitioner associations (IPAs), and each one works differently. These can be regional IPAs, specialty IPAs, multi-state IPAs, profit and non-profit IPAs. Choose the best IPA based on your practice standards, patients, and geographical location. You can also choose an IPA depending on your specialty, as some IPAs specifically focus on certain fields. Choosing the right IPA as a mediator between your practice and insurers is very important to avoid trouble and billing issues.

You can also seek guidance from healthcare and finance experts to choose the best IPA organization for the billing process and collaboration with other providers.

### Join an IPA

Healthcare providers can join IPA by registering themselves and writing applications for membership. IPA professionals credential each medical provider, check compliance with patient care standards, and then allow them to be part of the IPA organization. After becoming a member of IPA, IPA will handle the billing process from claim submission to reimbursement management. Providers can also have access to billing tools and technologies, which can help them save money and time.

### IPA services and compliance

Understanding of what is IPA in medical billing and services covered by it is recommended. There are various services provided by IPA and in return, providers need to comply with their billing rules and regulations. Providers can use IPA billing technologies for better understanding of processes. IPA provides data analytics and tracks potential billing errors. These statistical reports can be used as billing guidelines for providers.

### Proper documentation

Behind every process, documentation is the key factor in maintaining records and helping to understand each step involved. In medical billing, it is recommended to document every step from patient presentation, medical history, detail of visit to management plan and outcome of disease. It helps to understand what kind of medical services are provided to the patient and IPA bills for services accordingly.

Proper documentation comes under compliance rules and it is necessary for internal and external audits. Instructions should be provided to the working team on documentation to form error-free medical reports. This helps to bill correctly and get reimbursed timely.

### Join network activities

Engage in IPA network activities like seminars, symposiums, and other conferences to learn about new industry trends and compliance regulations. These activities help providers to meet each other and exchange views on challenges and considerations about medical billing. This provides insight into the best billing and profitability techniques. Seminars and educational conferences are considered an essential part of improving patient care as well as administrative skills.

## Difference between IPA and medical groups

There is confusion between IPA and medical groups among people as they use these terms as synonyms but they are completely different. Medical group is a organization which has doctors as its employees and they are not independent. They share workspace and a percentage of revenue generated. Administrative function is also shared among doctors.

While as we have discussed earlier in this guide, IPA is an organization in which all providers are independent and they just use IPA as a centralized organization dealing with billing, contracting and negotiating reimbursement rates. They don’t share earning and workspace.

## Difference between IPA and HMO

IPA and HMO are considered third parties, and it is better to understand the difference between them. HMO (Health Maintenance Organization) is an insurance model that bills for the healthcare services provided to patients. It also focuses on patient care, but its structural model is different. If we talk about IPA, it is not an insurance model but a maintenance model. IPA is a group of providers that contracts with payers like HMOs to get reimbursed for services they render.

IPA and HMO can work in collaboration to provide medical services from a broad selection of providers enrolled with IPA. IPAs work as intermediaries to streamline the billing process between providers and HMOs. It is cost-effective with a minimum number of incorrect claim submissions and a maximum number of successful reimbursement cycles.

## Conclusion

IPA is termed Independent Practitioner Association, aimed to manage and streamline the billing process. This organization also works to connect and develop collaboration between healthcare providers and insurers. Independent providers sign contracts with IPA to follow regulations and become members of it. IPA contracts and decides reimbursement rates for the services with insurance companies like HMOs. Providers send medical bills and documented details of medical services to IPA. IPA bills for services to insurers, and the reimbursement is divided among IPA providers according to their services.

IPA also maintains and streamlines billing processes. Their expert team manages the billing process, studies new trends, and complies with regulatory policies. The administrative and financial burdens become minimal for providers, and they can invest resources in patient care thanks to IPA. To join IPA, first, choose a suitable IPA organization, understand policies and services, and register yourself. Documentation and engaging in IPA activities are recommended for learning new skills and market trends.

## FAQs

### 1. How does an IPA differ from a traditional health insurance provider?

IPA is not an insurance provider but it acts as an intermediate party between healthcare provider and insurance company. It focuses on streamlining billing services and contractual management. It manages the billing process, bills insurers for the services given by providers, gets reimbursed for the services and distributes payment among healthcare providers who are members of IPA.

### 2. How does joining an IPA impact a provider’s billing rates?

Healthcare professionals are billed higher rates for the medical services as IPA as a group of providers has good bargaining power as compared to bargaining power of individual providers. By joining the IPA network, you can maximize your profitability ratio as independent practice.

### 3. Do all IPA work on the same payment model?

No, IPAs offer different payment models. First model is capitation in which healthcare providers are paid a fixed amount for each patient. The number of services does not matter. Another model is fee for services in which providers get reimbursed for the type of medical services. The number of patients does not have any role in this model. Providers need to choose a suitable payment model after considering all factors related to its practice.

### 4. Are IPAs responsible for managing claims denials and appeals?

IPAs have expert teams who use billing tools and technologies to manage claim denials and appeals. Experts track potential errors in the claim, rectify them and resubmit. If some provider is facing constant claim denials then, he can contact with IPA team to manage his claims and billing process.

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