An Independent Practitioner Association (IPA) is a physician organization comprised of independently practicing physicians (as differentiated from Kaiser Permanente who employs and manages all of its physicians). These independent physicians join together as an association for the purpose of contracting with Health Maintenance Organizations (HMO) such as Aetna, Blue Cross, Blue Shield, CIGNA, Health Net and PacifiCare. The HMO then lists the individual physicians in their directories and pay the IPA (not the individual physicians) a fixed monthly fee to provide all professional health related services for the patients that select doctors affiliated with that IPA. This contract between the IPA and the HMO is a critical document that allows patients to access physicians in the IPA and delineates the responsibilities the IPA must assume to comply with government and industry regulations. There is a similar contract between the individual physicians and the IPA. Without these contracts in place, services rendered by the IPA physicians to HMO patients would not be paid.

The HMO requires that an IPA verify the credentials of each member physician regularly and pay for all of the medical services rendered by both member physicians and non-affiliated physicians as well. The IPA is responsible to monitor the quality of the medical care provided and submit to periodic audits to verify that federal and state healthcare regulations are being met. For an IPA to comply with all of the regulations and business function delegated to it by the HMO it must either contract with a management company like Advanced Medical Management, Inc. to provide those services or develop an internal organization with skilled business professionals, computer systems and facilities to manage itself.

AMM’s clients have each chosen to contract for such business services and the officers of the IPA oversee the varied and specific functions that AMM provides on its behalf. AMM then provides the staff, office space and computer systems necessary to verify physician credentials, inspect physician offices, pay claims, verify patient coverage and benefits, process referral requests to specialist, answer phone calls from patients and physicians, and monitor every patient that is admitted to any hospital. AMM employs licensed nurses to work directly with the physicians in the IPA to coordinate the care of hospitalized patients; it employs professional administrators to oversee the HMO and provider contracts, regulatory compliance, and hospital relations; it employs computer programmers and engineers to develop and maintain technical software, computer networks and internet connectivity; it employs claims examiners, authorizations clerks, eligibility verifiers and customer service representatives to process the 40,000 claims, 10,000 referral requests and 10,000 telephone calls that are received by AMM each month on behalf of its IPA clients. In addition, AMM employs general office staff, mail and file room personnel, human resources and management staff as well as maintains sophisticated computer file servers, internet servers, internal and external routers, workstations, telephone systems with automated call distribution, auto attendant and voice mail; mail processing equipment; and 18,000 square feet of prime office space.