Scarinci Hollenbeck, LLC
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201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: July 24, 2019
The Firm
201-896-4100 info@sh-law.comPhysicians are increasingly joining forces to form independent practice associations or IPAs. While forming an IPA can have benefits, it is important to recognize that there are numerous legal issues that must be addressed.
Faced with rising costs and declining reimbursements, independent physicians are increasingly looking for business arrangements that can relieve some of the burdens of operating a practice, while still maintaining their independence. For physicians that don’t want to pursue an affiliation with a hospital system, an IPA can be an attractive solution.
In basic terms, an IPA is a legal business entity that is organized and owned by a network of independent physician practices. The IPA contracts directly with health care providers so that it may then contract with one or more managed care organizations (MCO) to make the services of such providers available to enrollees of the MCOs.
For physicians, banding together can be an effective means to reduce overhead and increase bargaining power when negotiating contracts with MCOs, employers, and accountable care organizations (ACO). IPAs also have many other benefits, including:
IPAs, however, are not without risks. When considering an IPA, physicians should be mindful of the following:
Under New York law, IPAs may be formed as a limited liability corporation (LLC) or corporation (S-Corp, C-Corp or not-for-profit). Formation of an IPA requires consent and approval from the Department of Health (DOH), the State Education Department (SED) and the Department of Financial Services (DFS) prior to filing a certificate of incorporation with the Secretary of State.
To form an IPA, the DOH requires the following:
Whether you are considering forming or joining an existing IPA, it is important to recognize the business and legal implications. Before making the leap, we encourage you to consult with experienced counsel who can help you analyze the risks and benefits of an IPA and determine the best path forward.
If you have any questions or if you would like to discuss the matter further, please contact me, Jeffrey Cassin, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
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