Q. How do you see the role of insurance companies evolving now that IPAs are contracting on their behalf?

A. David Stone, executive director, Texas Surgical Associates:

Health insurance companies, having assumed new responsibilities with the emergence of managed care, continue to face dramatic change within their industry. Several health maintenance organizations (HMOs) are relinquishing their core function-managing financial risk-to independent practice organizations (IPAs). In the process, they are assigning claims processing, utilization management and eligibility verification to one or more IPAs.

With many traditional responsibilities delegated to one or more IPAs, the insurance companies are free to devote their time to sales and marketing, collecting premiums and producing I.D. cards. Reimbursement for patient claims will amount to no more than processing one capitation check for each contracted IPA each month.

For HMO members, the choice of insurance company will be less significant than their choice of IPA. However, they may not realize that the IPA network is smaller than the HMO network and the distinction is significant. The provider may not realize that the identification of the IPA is just as important as the HMO when mailing claims. Education of both patients and providers is more critical, as network/payor relationships become more complicated.

When IPAs are part of an HMO network, another administrative layer is added to provider relationships in the form of another contract, a second set of procedures and in all likelihood a smaller network.

Finally, the majority, if not all, of the HMOs are arms of giant insurance companies. HMOs are strictly regulated by state and federal agencies. There is no known standard financial requirement for IPAs, nor are they governed by any regulatory agencies.

It remains to be seen if IPAs can successfully manage financial risk better than insurance companies to the benefit of the patient.