Definition extracted with permission from American Academy of Family Physicians: Family Physicians and Managed Care
A health maintenance organization delivery model in which the HMO contracts with a physician organization, which, in turn, contracts with individual physicians. The IPA physicians practice in their own offices and continue to see their fee-for-service patients. The HMO reimburses the IPA on a capitated basis; however, the IPA usually reimburses the physicians on a fee-for-service basis. This type of system combines prepayment with the traditional means of delivering health care, i.e., physician office/private practice and use of hospitals, nursing homes, and so on.