Will a Messenger Model IPA Work?

Regulators tend to let messenger model IPAs alone because they're utterly toothless. If the IPA is negotiating with payors, it isn't a messenger model IPA.
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In 2011, I did a post that still seems relevant today on the use of messenger model IPAs.  Here is the original post:

I have seen more interest lately in formation of messenger model IPAs.  I’ve never understood the fascination with these critters.

I suppose the gentle antitrust treatment leads physicians to believe that they can form a messenger model IPA, enter into contracts as a group, and be left alone by the regulators.  That is largely true.

The reason that regulators tend to let these entities alone is that, if done correctly, they are completely toothless. If your “messenger” is negotiating with the payor, you don’t have a messenger model IPA.

Done correctly, a messenger merely carries the payor offers to the various physicians in the IPA, and then collects contracts from those who sign.  If the payor offers $1 per office visit, that offer should be taken to the physicians.

This system will work once.  The second time the messenger shows up at the office, however, the unfortunate soul may be met with pitchforks.

It is only natural that the messenger will attempt to “inform” the payor what terms and conditions “may” be favorably received.  The payor just might consider this provision of information to be “negotiating” on behalf of the competing physicians.  A little call to the FTC, and the docs learn the significance of the phrase making a federal case out it”.

I have been involved in a joint federal and state antitrust investigation.  It was an incredible hassle for the physicians, with a huge amount of discovery and legal work.

So, unless you are comfortable with a toothless wonder, I strongly suggest you go the extra mile and develop clinical integration in your network, rather than creating a messenger model IPA.  You’ll find you really can provide better care, and you then can negotiate with payors who are happy (or maybe grudgingly willing) to pay for this increased quality.

Image courtesy of Luis Molinero/Shutterstock

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Dennis Hursh

Dennis Hursh

Dennis Hursh has been providing healthcare legal services in Pennsylvania since 1982. Since 1992, he has been a physician's lawyer serving as Managing Partner of Physician Agreements Health Law, the first law firm in the country to focus exclusively on physician employment agreements. Dennis has devoted his life to serving physicians and medical practices. He is the author of the definitive book on physician contracts "The Final Hurdle - a Physician's Guide to Negotiating a Fair Employment Agreement, and a frequent lecturer on physician employment agreements.

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