Independent practice association (IPA)

IPA overview

An independent practice association (IPA) allows dermatologists to retain their independent practice status while joining a separate entity that negotiates payer contracts on behalf of its members. This model offers a way to preserve autonomy while gaining access to better reimbursement rates, shared administrative services, and collective negotiating power. Although IPAs do not involve clinical integration, they can streamline business processes and alleviate some regulatory and compliance burdens.

Why dermatologists choose this

• Preserves full clinical and operational independence.

• Provides access to better payer contracts through collective negotiation.

• Reduces administrative burdens through shared infrastructure.

• Offers flexibility in payment models (capitated, flat fee, or fee-for-service).

• Allows for collaboration across specialties without merging practices.

How this model works

Practice structure

Dermatologists operate independently but participate in a centralized contracting organization. Each practice maintains its own branding, office, and patient base while cooperating through the IPA.

Reimbursement model

IPAs negotiate payer contracts on behalf of all members, potentially improving reimbursement rates. Payment structures may include per capita, retainer, or fee-for-service models.

Patient care model

There is no shared clinical responsibility or care coordination mandate. Physicians retain full control over how care is delivered within their practices.

Administrative support

IPAs often support members with payer compliance, credentialing, contract negotiation, and business operations. However, they cannot invest in or directly manage ancillary services.

Compensation and benefits

Dermatologists are compensated based on their individual practice revenue. However, collective bargaining may increase payer reimbursement and reduce overhead through shared services, improving financial stability over time.

Technology and operations

Common infrastructure may include data sharing, analytics, or compliance services, though practices are not required to integrate EHRs or other clinical systems.

Career growth

IPAs are less focused on individual career advancement but may offer leadership opportunities in contract negotiation or governance boards. Participation may align with long-term practice growth or expansion strategies.

When this model makes sense

• For dermatologists who want to stay fully independent but need better leverage with payers.

• A strong fit for practices that want to reduce compliance and contracting burdens.

• Ideal when ancillary services are not essential to the business model.

• Useful in markets with multiple IPAs offering specialty-specific or multi-specialty coverage.

• Best for those who value collective negotiation without clinical integration.

Success factors

• Review all IPA contracts with legal counsel to ensure compliance and avoid liability risks.

• Understand the financial risks and your tolerance for them.

• Research local IPAs for past performance and payer relationships.

• Choose an IPA with members whose business goals align with yours.

• Track the actual cost-benefit impact on your practice, not just projected savings.

Potential challenges

• Disagreements with other physicians may complicate governance or decision-making.

• Financial or legal liability risks may arise from the actions of other IPA members.

• IPAs generally cannot invest in or offer ancillary services.

• Effectiveness depends on how well the IPA is managed and structured.

• Limited opportunities for shared clinical improvement or operational synergy.

Real-world consideration

Because IPAs vary widely by region and structure, it’s critical to assess their effectiveness in your area. For example, some dermatologists have reported improved payer relationships and reduced admin strain, while others found limited financial benefits. IPAs work best when members share goals and governance is clearly defined.

Early career advice

• Inquire about what payer contracts are currently in place and how they impact specialty rates.

• Ask how much involvement is expected in governance or decision-making.

• Review any antitrust, compliance, or liability protections offered.

• Look for transparent financial models and historical performance data.

• Join an IPA if you’re seeking independence plus strategic business support without giving up control.

Related AAD resources

• Practice types: See our full menu of resources on practice types, from solo to institutional.

• Get started: Access our guide to getting started in practice, with resources on practice types and policies and procedures.

• Employment guide: See all our resources on contracts, questions for employers, and more.

This content was created with the particular needs of early-career dermatologists in mind. See the rest of our Career Launch resources for young physicians.