The health insurance industry, with its myriad of products, is so complex. There probably are just as many 3-letter abbreviations in this area as there are in ophthalmology. I’m still learning something new every day.
In a previous post, I had mentioned how I had contracted with most private insurance carriers through an IPA (independent practice/physician association). Recently, I found out that there are actually two different types of IPAs. One acts as a broker, helping physicians to negotiate direct contracts with various insurance companies. By representing multiple physicians, it has more bargaining power to obtain competitive rates. This form of IPA plays no role in managing patient insurance benefits and processing claims. I joined this type of IPA last month.
A few days ago, I found out that there is another type of IPA that plays a more active role in managed care. Various contracted HMO insurers provide capitated funds to these IPAs. In turn, these IPAs process claims and disburse payments to physicians in the network. Essentially, they act as an intermediary for HMOs. Apparently, in California, most HMO members obtain their care through this model. All IPA members are required to seek care from primary care physicians and specialists within this exclusive network. Hence, even though I may belong to an insurance company’s network, I would not be able to accept HMO patients without being part of a managed care IPA.
It turns out that the IPA that had rejected my membership application a few months ago because of “no need” is a managed care IPA. Santa Clara County has another IPA, SCCIPA, which is actually the larger of the two. At this point, I’m sort of at a bind as to whether I should apply to SCCIPA or not. Originally, I wanted to be on every single insurance plan so that I could have access to as many patients as possible. However, based on my conversations with a few ophthalmologists in the area, I’m not so sure anymore. I’ve heard nothing good about SCCIPA. Apparently, they take 3 to 6 months to pay claims, have lower reimbursement rates, and like all HMOs, require more hoops to jump through when seeing patients and coordinating care. Although about 40% of Californians have HMO plans, most of them are part of the Kaiser network, and SCCIPA only has 65,000 members. There are about 1.8 million people in Santa Clara County, so joining SCCIPA would give me access to only an additional 3% of the patient population.
Nevertheless, if I were to join SCCIPA, I would probably have a greater chance of having more patients up front. Of course, nothing’s ever for free. I would be trading off more headaches and beurocracy for this added patient base. Although taking SCCIPA patients will probably help me to get things started, I fear that my practice may end up being consumed by these patients in the end. I’ve heard of some ophthalmologists with SCCIPA who are seeing 60 to 70 patients a day to make ends meet. I don’t want to ever become that type of ophthalmologist. I would not have decided to go into solo practice if I knew that my practice would ultimately head in such direction. Of course, I could probably limit my appointment slots for SCCIPA patients if things did get crazy. Still, I will probably lose some clnical autonomy with HMO patients, which I don’t like.
SCCIPA’s application process totally sucks. Here’s what I would have to do just to be CONSIDERED for an application! I have to write a one page letter of intent, submit my CV, and submit two letters of recommendation, preferably being from SCCIPA providers in my specialty. As a new provider in the area, how the heck am I supposed to have a SCCIPA provider comfortable enough to write me a letter of recommendation? On top of that, I need to turn everything in within 10 days to be considered at the next monthly committee meeting! Let me remind you again, I need to do all this just to be considered for an application. In addition, there’s a real chance that SCCIPA will deny my application request because of “no need,” which I think is likely based on how discouraging the initial process is.
I’m really wondering if applying for SCCIPA and joining their network is worth all the headache. Once again, I’ll only have access to an additional 65,000 patients with a plan that pays little and slowly. The flip side is that uncertainty can be a strong motivator for going overboard. Still, I think I’m going to hold off on SCCIPA for now. Financially, in the begining, it probably won’t make a difference whether I take SCCIPA or not since their claims won’t come in for 3 to 6 months. And worse comes to worse, if business is super slow, I can apply in the future. Most likely, being on Medicare and all PPO’s should be enough. It might take me a little longer to build a patient base, but as long as I can weather the storm until my practice gains ground, I should be ok.
Howie’s note: when you first open doors everyone is paranoid that their practice won’t succeed because of being excluded from narrow network plans. There have plans I have been trying to get onto for years that have exclusive contracts with the big groups in town as described above. Guess what, my practice is doing fine and I’m as busy as I want to be.
Ironically, some of my referring primary care docs told me they tried to lobby to get me on one of these plans because they like my practice more than the big groups in town. The bottom line is you don’t have to be on every single plan, nor should you feel obligated to be on a plan if they pay poorly or don’t pay at all, or set up a ton of roadblocks like prior authorization.