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IPAs and Per Se Rules: Arizona v. Maricopa County Medical Society

Published online by Cambridge University Press:  27 April 2021

Harry Philip Cohen
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Extract

The recent flurry of antitrust litigation in the health care industry is forcing the courts to reevaluate the legality of existing health care institutions under the Sherman Antitrust Act. One type of institution that poses significant antitrust questions is the independent practice association (IPA), an arrangement which consists of a contractual relationship between subscribers, physicians and an IPA corporate entity. The physicians agree to provide medical services to the IPA's subscribers, who pay a flat rate. In exchange, physicians are reimbursed at rates usually established by a fee schedule.

The Health Maintenance Organization Act of 1973 requires that an IPA, like an HMO, must “assume full financial risk on a prospective basis for the provision of basic health services…” This ensures that the IPA bears the risk that the cost of the services it renders will not exceed the value of the premiums it collects, giving it an incentive to contain costs.

Type
Article
Information
Law, Medicine and Healthcare , Volume 9 , Issue 5 , September 1981 , pp. 8 - 37
Copyright
Copyright © American Society of Law, Medicine and Ethics 1981

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References

P.L. 93-222 §1301(c)(2). While sometimes referred to as “open-panel health maintenance organizations,” IPAs must be distinguished from the conventional or closed-panel HMOs. IPAs are associations of physicians in traditional private practices. They provide prepaid health services to consumers, and attempt to control health care costs and improve the quality of medical services through peer review. See generally, Steinwald, C., Foundations for Medical Care (Chicago, Blue Cross Ass'n) (1971); and Egdahl, R., Foundations for Medical Care, New England Journal of Medicine 288(10): 491–98 (March 8, 1973).Google Scholar
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The individual user can negotiate with the copyright owner rather than purchase the blanket license, and the health care consumer can utilize physicians episodically rather than subscribe to the IPA.Google Scholar
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