Submitted by UCS on March 22, 2019
New York recognizes a variety of business forms including corporations, limited liability companies, limited partnerships, sole proprietorships and general partnerships. Each has its own advantages and disadvantages. The business form of choice will depend upon the purposes of the company. When a company is being formed for specific professional services in New York it must go through a series of approvals in order to conduct business.
An independent practice association also known as an IPA is an association of independent physicians or other organization that contracts with independent physicians and provides services to managed care organizations (MCO) on a negotiated per capita rate, flat retainer fee, or negotiated fee-for-service basis. An HMO or other managed care plan can contract with an IPA which in turn contracts with independent physicians to treat members at discounted fees or on a capitation basis. The most commonly structured IPA encompasses all specialties, but can be solely for primary care or a single specialty.
IPAs can be formed as an LLC, S Corp, C Corp or other stock entity. In order to form an IPA in New York, the applicant must obtain consent from the New York Department of Health prior to submitting the formation documents to the Secretary of State. The following items must be provided to the Department of Health for approval:
1. The name, address, and telephone number of the proposed IPA.
2. A photocopy of the executed Certificate of Incorporation or Articles of Organization, which must be legally acceptable to the Department of Health pursuant to 10 NYCRR § 98-1.5(b)(6)(vii)(a) and (c), and must contain the language required by 10 NYCRR § 98-1.5(b)(6)(vii)(b). The instrument must also include the date on which it was executed.
3. The IPA name should include the words, “Independent Practice Association,” or the acronym, “IPA.” This applies also to any assumed name that an existing approved IPA proposes to use. In such case, the proposed executed Certificate of Doing Business Under an Assumed Name must be submitted to the Department of Health for review and approval before filing.
4. The names, addresses and occupations of the Principals of the IPA. If the IPA is to be a business corporation, provide the names, addresses and occupations of the stockholders, directors, and officers. If it is to be a limited liability corporation, provide the names, addresses and occupations of the members and managers. For a not-for-profit corporation, provide the names, addresses and occupations of the directors, officers, and members.
5. A list of the health care and insurance affiliations of the Principals. For example, for individuals, list positions as officer, director, stockholder, partner, manager, and/or member. For corporations or limited liability companies, list entities in which the company is a stockholder, member, joint-venturer or of which it is a subsidiary through stock ownership.
6. If any of the proposed IPAs Principals is a corporation or limited liability company, identify all other states in which it is licensed or approved to operate an HMO, IPA, PPO or to provide health services or insurance. Provide a copy of the Principal’s Certificate of Incorporation and Application for Authority to do Business in New York, if applicable. If the Principal is a limited liability company, provide its Articles of Organization and Operating Agreement.
7. If the proposed IPA will be a limited liability company, provide the Operating Agreement.
8. Identify the types of providers the IPA will make available (e.g., individual physicians, professional corporations, hospitals, etc.).
Once consent from the Department of Health is provided the applicant must also request consent from the New York State Department of Financial Services and from the New York State Education Department before finally submitting to the New York Department of State.
Note that the New York State Education Department requires that the following language appear in the Certificate of Incorporation or the Articles of Organization:
“Except as authorized by the provisions of Public Health Law Article 44 and 10 NYCRR Part 98 (IPA), Title VIII of the Education Law, or other applicable statute, nothing herein shall authorize the corporation or limited liability company to engage in the practice of any profession in New York, engage in the training of any profession in New York or to use a professional title or term of any profession in New York in violation of Title VIII of the Education Law.”
Contact United Corporate Services or your CSR to discuss steps in setting up an IPA in another state. Always seek legal counsel before making a decision on which business vehicle suits your needs.
Keith Sheppard is the Business Development Coordinator for United Corporate Services. Keith contributes to blog posts for United Corporate Services on a monthly basis. As Business Development Coordinator, Keith utilizes his 25 years of experience as both a corporate paralegal and paralegal manager to develop relationships with all UCS clients by providing smart corporate filings and due diligence solutions.
Have a question about or a suggestion for a blog contact Keith at email@example.com or (800) 899-8648.