Demystifying value-based care for FQHCs: What is an IPA, anyway?

Cesar Herrera, Co Founder & CEO

Federally Qualified Health Centers (FQHCs) have a lot to gain from participating in value-based care through contracts with managed care organizations (MCOs) and other types of payer partnerships.  By shifting from volume to value, FQHCs have the opportunity to enhance their revenue while improving outcomes, controlling costs, and generating better experiences for patients and providers.

However, it isn’t always easy for these community health centers to navigate the emerging reimbursement reform environment on their own.  Oftentimes, FQHCs don’t know how to begin or where to turn for help.  And with so many new players in the healthcare industry looking to capitalize on the value-based care transition, it’s hard to know whom to trust.

FQHCs need to look for a partner that are financially, clinically, and culturally aligned with their interests and designed to help community health centers succeed.  An independent provider association (IPA) created exclusively to work with FQHCs is exactly that.

But what is an IPA, exactly?  How does it differ from other entities in the value-based care space?  And why should you consider joining one?  Here are the answers to some of the top myths and misconceptions around IPAs and value-based care.

Related: Want more on what value-based care means for FQHCs? Download our guide.

FAQs for FQHCs: Learning about IPAs and value-based care

What is an IPA and how does it help with value-based care?

An IPA is a network of providers formed to reduce administrative overhead and optimize contracting relationships. IPAs can conduct many different activities, including contracting with HMOs, managed care organizations, and accountable care organizations (ACOs).

By bringing multiple independent providers together, the IPA can wield more clout when negotiating with payers or advocating for policy changes, similar to the way a union works on its members’ behalf in other industries.  The IPA provides the administrative resources for conducting these activities so that members don’t have to take on additional work.

For FQHCs, IPAs can be a highly effective vehicle for participating in value-based care.  An IPA can:

  • Manage relationships between MCOs and other payer structures to secure advantageous contract terms and resolve any potential issues.
  • Enable FQHCs to pool their patient panels so they can meet minimum size thresholds for value-based contracts
  • Provide guidance and expertise about quality improvement and other activities that may lead to shared savings
  • Allow FQHCs to focus on delivering high-quality care to vulnerable communities.

Check out our Annual Report to hear from FQHCs working with Yuvo Health to gain the advantage in value-based care.

How is an IPA different than an MSO?  What about an ACO?

IPAs are often confused with managed services organizations (MSOs), but they aren’t the same thing.  While an IPA acts as an advocate and coordinator for a group of independent providers, an MSO provides services for specific business needs, such as human resources, technology management, or billing and coding.

MSOs can be extremely helpful with the concrete challenges of running a healthcare organization, but an MSO cannot contract with payers around reimbursement or conduct quality improvement activities across a network of providers.

The difference between an IPA and an accountable care organization can also be difficult to decipher.

An ACO is a group of providers (hospitals, physician practices, FQHCs, or a combination) that contracts with a payer to meet agreed-upon quality and spending targets.  If the group collectively meets its goals, each member gets a portion of the savings generated for the payer.  If the ACO doesn’t succeed, it might be liable for negative payment adjustments or other penalties.  Medicare, Medicaid, and many commercial insurers all offer ACO programs.

Just to make things complicated, an IPA can actually join an ACO.  This means that members of the IPA will be held to shared standards for quality care delivery and spending for the payer in question.  You don’t have to join an IPA in order to join an ACO.  And not every IPA will become part of an ACO.  It’s simply one of the options for providers to work together to improve quality across the care continuum

Does joining an IPA mean losing your independence?

You might be wondering what this all means in terms of how your FQHC will operate on a day-to-day basis.  Does linking up with other community health centers mean you all have to be in lockstep about everything?  No, it doesn’t.

While IPAs can offer helpful guidance about quality improvement and operational activities, and they can relieve your staff of some administrative burdens related to value-based care, they aren’t the new corporate owners of your health center.  

FQHCs that join an IPA retain full autonomy around clinical decision-making, staffing, revenue cycle management, and other critical aspects of running a successful organization.  Members simply gain an extra layer of help and support around their value-based care initiatives, which can help to maximize scarce resources and secure enhanced revenue opportunities.

Does an IPA always require upfront membership fees?

“What does it cost?” is an important question for FQHCs to ask.  Community health centers need to carefully assess all potential partners for a financial model that works best for them.  

Some IPAs may charge memberships fees, technology fees, and other dues to fund their activities.  But others do not.  IPAs can be structured so that they only succeed financially when their members meet their value-based care goals.

Yuvo Health does not charge upfront membership fees.  In fact, we ensure you earn reliable revenue from value-based care from Day One. We believe that all FQHCs should be able to take advantage of the possibilities of value-based care without straining their resources.

How does joining an IPA for FQHCs actually work?

If you’re feeling more confident that an IPA is right for you, we’re here to help you take the next steps.

Yuvo Health offers deep experience and wrap-around assistance to get your FQHC into the value-based care models that can support financial sustainability and ongoing independence.  

Hear directly from our FQHC partners in our Annual Report, learn more about our mission to support health centers as they support their communities. And connect with us today to learn more about beginning your journey toward the improved outcomes, lower costs, and better experiences of value-based care.

Editor's note: This article originally published in 2021 and was updated in October 2023.

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