As of January 2024, over 15 million Californians receive Medi-Cal (California’s Medicaid program). And many of these recipients get their healthcare through a Medi-Cal Managed Care Plan (MCP) and an Independent Physician Association (IPA). Some of Medi-Cal’s health insurers with MCP include Blue Cross of California Partnership Plan (AKA Anthem), Blue Shield of California Promise Health Plan, CHG Foundation doing business as Community Health Group Partnership Plan, Health Net Community Solutions, Inc. and Molina Healthcare of California. There are thousands of IPAs in California. If you are a Californian with a Medi-Cal MCP, you understand that your medical care is decided by your physician and not approved or denied by your health insurance company. So receiving a Preferred IPA of California denial, an Accountable IPA of California denial, or any Medi-Cal IPA insurance denial can be devastating.
This page discusses Medi-Cal Managed Care Plans, IPAs, and IPA relationships with physicians, health insurers, and patients. It reviews incentives to deny medical care and what to do if you receive a Medi-Cal IPA health insurance denial.
What is a Medi-Cal Managed Care Plan?
A Managed Care Plan (MCP) or Managed Care Organization (MCO) is a plan that provides healthcare while managing utilization, quality and costs. Medi-Cal MCPs typically have contracts in which Medi-Cal pays the MCPs a set monthly dollar amount to cover medical care for each member. (This is also known as capitation.) MCP objectives include better health plan performance as well as improved healthcare quality and patient outcomes. MCPs typically include physician and facility (AKA provider) networks, prescription drug formularies, provider oversight, and more. One example of a MCP is a Health Maintenance Organization (HMO) in which a patient has a Primary Care Provider (PCP) who is responsible for coordinating all the patient’s medical care.
What is an IPA (Independent Practice Association)?
An IPA, also known as an Independent Practice Association, an Independent Provider Association, or an Independent Physician Association, is an independent medical group business entity. IPAs are networks of doctors who have their own practices. Some IPAs have several types of practitioners such as primary care physicians (PCP) and specialists. And some include doctors as well as facilities like hospitals, urgent care clinics and imaging centers. IPAs typically contract with health insurance companies and managed care organizations like HMOs, PPOs and POS plans. They enable physicians to remain independent but to access a variety of benefits. IPAs typically cover a local area or geographic region. A 2022 report from the California Health Care Foundation estimated that 43% of California physicians were members of an IPA.
Why Do Doctors Join IPAs?
Physicians join IPAs to do several things including enhancing patient care, reducing their overhead and increasing their operational efficiencies by sometimes sharing office space, office systems, billing and reimbursement processes, as well as records including electronic health records (EHR). IPAs also seek contracts with employers, health insurers that offer health maintenance organizations (HMO), accountable care organizations (ACO) and managed care organizations (MCO), and facilities including labs, radiology imaging centers, hospital systems, and others. Individual IPAs often work with multiple health plans. As a group, IPAs can also provide more services including urgent care, longer hours, telehealth appointments, medical expertise, and more. They also bring greater negotiating power with health insurance companies because they are a bigger entity than an individual practice or facility. IPAs may offer billing services as well as higher reimbursement rates and thus increased profits.
When doctors sign up with several IPAs, they increase the pool of patients they care for just like they do as in-network providers for health insurance companies.
What is The Difference Between an IPA and a Health Insurer?
You receive healthcare from IPAs, or the IPAs’ physicians and facilities. Health insurance companies, on the other hand, contract with IPAs or medical groups to provide healthcare to their subscribers or members.
Why Do Health Insurance Companies Contract With IPAs?
There are benefits for all parties including insurers, providers and members.
- Health Insurers: Through IPAs, health insurers get primary care and specialist doctors as well as facilities in local communities. Insurers also delegate care to the IPAs.
- Providers: As mentioned above, IPAs help providers increase efficiencies and reduce administrative and financial burdens.
- Members: Members have access to a larger, more integrated and coordinated network of doctors and facilities. Practitioners determine care without relying on insurance company claim approvals.
How Do California Medi-Cal Managed Care Organizations Operate with IPAs?
Medi-Cal Managed Care Organization HMOs in California operate primarily under a delegated model in which they enter into IPA Service Agreements with IPAs. In essence, the contracts change the IPAs into small insurance companies and provide the IPAs with incentives to deny care. In exchange for payments from the HMOs, the IPAs typically agree to determine what medical care a member (or subscriber) needs and whether that specific care is covered under the HMO’s contract with the member (also known as the Evidence of Coverage). The IPAs also agree to provide or pay for most of the medical care given to subscribers.
In California, several Medi-Cal recipients are insured by Managed Care plans like HMOs provided by private insurance companies such as L.A. Care. (As of December 2023, L.A. Care Health Plan is Los Angeles County’s largest Medi-Cal plan with almost 2.6 million members.) Insurers like L.A. Care, in turn, offer their members options to receive healthcare directly, or to receive healthcare from one of their plan partners (other health insurance companies) and a variety of IPAs.
What Are Incentives for IPAs to Deny Care to Managed Care Plan Members?
The incentives to deny care stem from both capitation payments and risk-sharing pools. Capitation payments are fixed monthly payment amounts for each member assigned to the IPA. And the IPA receives capitation payments regardless of whether or not a subscriber needs medical care. For this reason, a healthy subscriber receiving no medical care from an IPA is pure profit for the IPA. On the other hand, a sick subscriber needing a lot of medical care might cost the IPA much more than the capitation amount.
Risk-sharing pools limit the use of particular medical services. Risk-sharing also involves transferring the cost of healthcare services from the HMO insurance companies to the IPAs and medical providers. As an example, some HMOs hold back a percent of capitation payments at the beginning of a year and put the money into a risk-sharing pool reserved for certain services like hospital stays. The HMOs then use the pool of money as a budget for the anticipated cost of hospital stays for the members of an IPA. Then, at the end of the year, if the real cost of the hospital stays is greater than the budget, the IPA will be held responsible for part of the additional cost. But if the cost is less than the budget, then the IPA receives a percent of the funds remaining in the pool. Again, less healthcare equates to higher profits.
Given that HMOs have immense bargaining power over IPAs, many IPAs in the state face financial difficulties. Some have even filed for bankruptcy. And IPAs have financial incentives to deny healthcare to subscribers to enhance their profits.
How Do IPA Financial Incentives Impact Treating Physicians?
Many IPAs have capitation contracts with primary care physicians and specialists. Capitation contracts provide a financial incentive for physicians to care for a greater number of patients. Also, as noted above, doctors often have ownership interests in IPAs or get bonuses based on an IPA’s profits.
Are There Different Types of or Different Names for IPAs?
There are many types of IPAs. While they have different names and sometimes very slight differences, they share the same objectives. These objectives include achieving greater efficiency and lower costs, providing higher quality healthcare services, and performing as intermediaries between healthcare providers and payers. (“Payers” refers to health insurance companies, health plan providers, Medicare, Medicaid, and others who pay for provider healthcare services.)
In terms of names, IPAs may include physicians only or physicians as well as facilities like hospitals. Physician Hospital Organizations (PHO) can include hospitals and doctors and other types of providers. Clinically Integrated Networks (CIN) are like PHOs. CINs enable doctors to refer their patients to specialists and better coordinate their patients’ healthcare. Accountable Care Organizations (ACO) are often used with Medicare Part A and Part B programs. And the term Participating Provider Group (PPG) may be used instead of IPA.
How Many Medi-Cal Managed Care Plans are There in California?
As of January 2024, 22 health insurance companies offer Medi-Cal Managed Care Plans including Anthem Blue Cross, Blue Shield of California Promise Health Plan, CalOptima, Health Net, Kaiser Permanente, L.A. Care Health Plan, Molina Healthcare, and others. Not all Medi-Cal managed care plans are offered in all 58 California counties. To find Medi-Cal managed care plans in your county, you can search here by county or by health insurance company managed care plan.
Some managed care insurance plans contract with other insurance companies. For example, in LA County, L.A. Care Health Plan contracts with plan partners Anthem Blue Cross and Blue Shield of California Promise Health Plan. Health Net contracts with plan partner Molina Healthcare. If your insurer has a plan partner, then you can choose to receive your healthcare from the insurer or from one of its plan partners.
How Do I Find a Medi-Cal IPA?
Typically, you search for Medi-Cal IPAs by first selecting a managed care plan in the county you live in.
There are over 16,200 IPAs in California. IPAs often work with several insurance companies. Typically, your Medi-Cal managed care plan provides a list of IPAs you can select from. For example, as of December 21, 2023, L.A. Care Health Plan contracts with 28 IPAs in Los Angeles County. And here’s a list of IPAs that Cigna works with. You can view report cards on various reporting health plans and Medi-Cal medical groups and IPAs here. Starting in 2024, all California IPAs and medical groups are required to share health information real-time which means you’ll be able to view report cards of all of them moving forward.
What are Some IPAs in California?
Some IPAs in California include the following:
- Preferred IPA of California Claims to be one of Southern California’s largest managed care networks – it contracts with over 1,000 doctors.
- Accountable Health Care IPA (aka Accountable Healthplan Medical)
- Regal Medical Group Claims it is one of Southern California’s largest physician-led medical groups with over 3,000 primary care physicians and more than 10,000 specialists, urgent care centers, and more.
- Health Care LA™ (HCLA IPA) Claims to be the largest IPA in the state that serves the underserved patient community and to care for more Medi-Cal beneficiaries than any other organization in LA County.
- Optum – was formerly known as Inland Faculty Medical Group and claims to be the area’s largest Medi-Cal IPA. Works with Medi-Cal plans Inland Empire Health Plan and Molina Healthcare.
- Hill Physicians Medical Group is located in Northern California and claims to have the largest network of independent doctors in the state. It has over 3,500 physicians.
- AllCare IPA – Claims to have over 1,000 physicians in Merced, San Joaquin, and Stanislaus Counties.
- Torrance Memorial IPA Medical Group services Los Angeles’ South Bay and has over 500 primary care and specialty doctors as well as a hospital
- Allied Physicians IPA Works with Anthem, Blue Shield of California, Blue Shield of California Promise Health Plan, Cigna, L.A. Care Health Plan, Health Net, Molina Healthcare, UnitedHealthcare and other insurers. It has Medi-Cal plans and has physicians, partnership hospitals, and more.
- Santa Clara County IPA has over 1,000 physicians as well as urgent care centers, after-hours nurses, 10 hospitals, and more.
What Should I Do if My Medi-Cal IPA Won’t Approve My Medication or Treatment?
The law is a bit complicated in this area. In many cases, you must exhaust all administrative remedies by going through the Medi-Cal appeal process. However, your path might be different in certain situations. For this reason, if your IPA refuses to approve your treatment or medication or has told you to go through step therapy first, we suggest that you speak with an experienced health insurance attorney. Having a knowledgeable person in your corner who has dealt with insurance company managed care plans and IPAs—and is not afraid of dealing with big insurance companies and IPAs—can truly make a difference in the outcome of your situation. Attorney Scott Glovsky is that attorney. Scott will fight for you -your health and your future- never fearful of going against a big insurance company and IPA and insisting they do the right thing.
About the Law Offices of Scott Glovsky
The Law Offices of Scott Glovsky has represented health insurance policyholders for 25 years. The firm specializes in health insurance bad faith, catastrophic personal injury, sexual abuse and consumer-related litigation. We get justice for those we represent and hold the wrongdoers accountable.