In this Money Tree Series Episode #3, Coach JPMD describes what Independent Practice Associations (IPAs) do for healthcare entities and Medicare Advantage practices. IPAs are particularly helpful in bringing large multi-specialty groups together to help negotiate better contract rates. The Money Tree Series Podcast episodes are geared to helping physicians and other healthcare providers the ins and outs of running a successful Medicare Advantage practice. You can download the money tree diagram at www.coachjpmd.com/moneytree.
Don’t forget that Coach JPMD helps physicians go from overwhelmed to confident while increasing their income and their time in 90 days or less. Book a call using this link to learn how you can decrease your stress and earn more.
Coach JPMD 0:00
Thank you for listening to the practice impossible podcasts. And before we start this episode, I wanted to make sure that you guys aware that especially those physicians that are overwhelmed out there and feeling not so confident about the practice of medicine, I help you, I help you gain the confidence that you need to increase your income and get back some time. All this within 90 days or less. So book a call with me and learn more about what I do use the link at the bottom of the show notes there today, and love to be able to hear what your struggles are and help you decrease your stress and increase your income.
Welcome to the practice impossible podcast where your host, Jude a Pierre MD, also known as Coach JPMD discusses medical practice topics that will guide you through the maze that is the business of medicine, and teach you how to increase profits and help populations live long. Your mission should you choose to accept is to listen and be transformed. Now, here's your host, Coach JPMD.
Coach JPMD 1:01
I really love that sound. So today, we're going to continue the money tree series on the practice and possible podcasts. And this is a episode number three in the money tree series. And we're going to be talking about IPAs and MSOs. And not the IPA you might be thinking about if you like beer, but it is the Independent Practice Association. That's what IPA stands for, and the insurance industry, or MSO management services organization. So that's the organization that sits in between healthcare providers and facilities and the insurance company. So in episode one, we talked about CMS, and the Center for Medicare and Medicaid Services, that is the root of the money tree. Then we talked about in the episode number two, the insurance company and that's the trunk and that's who receives money from CMS. And if you haven't had an opportunity to download the money tree diagram, so you can kind of follow along what I'm doing with what we're talking about, you can go to www.coachjpmd.com/moneytree and you can get a download of that tree so you can follow along in the podcast.
So an IPA or independent physician association or independent practice association is that organization that is is created to be the some what of the middle man middle woman of the healthcare organization or payment systems that can also act like an ACO accountable care organization and what they do is it's formed to help group physicians and organizations together into one contracting entity, that entity can credential you as a provider who credential healthcare facilities, and can also act as a negotiating body for the insurance company. So if you're in a in a town or county or a region where there are not a lot of medical providers, or a specialist or even healthcare facilities, and IPA can help negotiate better rates for you, as opposed to you going directly to the insurance company. The IPA may say it may be able to negotiate better rates. IPAs can also help with the management of electronic health records and compliance and billing records. And as well as providing administrative support to practices that may be starting off. There are things that IPAs can can do to help with bulk purchasing of medications as well as purchasing power for other aspects of your group. And it's just a good way to to be a buffer between the insurance company and you as a health care provider.
So in my practice, we deal with an IPA that helps us manage the capitation checks that come in. So the insurance companies will contract with the IPA. And that IPA will then distribute the monthly capitation checks to each individual primary care provider. And that allows us to not have to deal with the insurance company and the insurance company doesn't have to deal with us because sometimes, it just says the government doesn't necessarily like to manage individual providers, insurance companies may feel the same, same way. And one of the things that a good IPA also does is that it can negotiate better rates with the insurance company. There are some insurance companies that can pay an additional premium. If you are accepting only one insurance company. Typically, insurance companies will keep 20% of that payment that's made from CMS to the insurance company and 80% is then distributed to the IPA.
The IPA will then take an administrative fee and also provide reinsurance. reinsurance is something that we talked about in the llama course. And what it is, is if you have a patient that becomes what we call catastrophic, those patients hit a threshold where the payments to the health care facilities are above and beyond a certain amount, then the IPA can contract with a another insurance company to help cover the costs that are above and beyond that 80% that they're getting from the insurance company. So the you know, I'm getting in the weeds here, but just know that there are some benefits, some of the drawbacks of having an IPA involved in your practices that you're kind of beholden to them. So if they don't do a good job for you, if they don't negotiate well, and if they don't have a good network of providers, then you can lose your shirt.
So it's important to find an IPA or an MSO that can support you that has experience in supporting you. And that can really have your back as private as as a provider. Another drawback is that they do have a an administrative fee, so that administrative fee can be cut into your profits. Another thing you might find in a poorly run IPAs is the push to not providing the appropriate care for patients. Obviously, when whenever an A, a company in the healthcare field as an incentive, if they don't provide care, they make more money, then, you know, you can obviously think about what that might do to a company's ability to provide the right care for for patients.
So it's important for providers to understand and to treat patients first and to really look at finances as secondary. And I've always felt that is if you do the right thing in patient care, money will follow. And the key thing is to learn what the right thing is. And that's what I'm hoping we can do with this money tree series. So the big takeaway from this episode is to understand that the IPA or the management services organization sits in between the healthcare providers that to primary care facilities, the hospitals, they sit between them and the insurance company of the Medicare Advantage company, they can provide some great benefits, especially negotiating better rates. But you have to understand what makes up a good IPA and a good management service organization and to ask around, because it's important to that company has good integrity and provides compliant and cost effective care for your patient population.
So let me know what you think. This is the third Money Tree series episode. And you can go to www.practiceimpossible.com. And leave us a comment. Let me know what you might want to hear more of. And, of course, as always, I asked for you to leave a review or, or some feedback, because it's with that feedback. We can continue to make these episodes more valuable to you and to help you practice impossible. Thanks for listening, and we'll see you next time.