Independent physician associations (IPAs) v. medical groups

Physicians communicate and collaborate with each other in a number of ways. In particular, independent physicians reach out to other independent physicians for support, networking, idea sharing, and other needs that come about as a result of being self-employed and responsible for their own practice management. There are a couple of options for independent physicians who may want to join forces in different aspects and on different levels.

The independent physician association (IPA) is a separate business entity that is “organized and owned by a network of independent physician practices.” IPAs provide the benefits of a larger group, while allowing each of the independent physicians in the group to retain their independence. The IPA does not provide or control physicians’ compensation.

Physicians often form an IPA to be able to negotiate contracts for their own services or to negotiate with suppliers such as radiology, laboratories, or hospitals. Being part of a larger group enables independent physicians to have more bargaining power. However, because the IPA is a business entity on its own, there are some legal ramifications that must be considered by independent physicians who participate.

Medical groups, on the other hand, are practices consisting of multiple providers “characterized by sharing of patient care duties and physical space.” In the group setting, the independent physicians are part of a larger practice, which can benefit them by offering access to other physicians when they are faced with tough diagnoses or other challenges.

In a group practice, each of the physicians’ compensation is based on “a method that includes a salary and some type of productivity bonus or incentive” and comes from the managing practice. Potential benefits for the independent physician who chooses to participate in a group practice include the fact that it is “generally viewed as less volatile than solo practice and more likely to afford a controlled lifestyle.”