How HMOs assess medical groups and IPAs.

California health maintenance organizations (HMOs) frequently capitate physician organizations--independent practice associations (IPAs) and multispecialty medical groups--to export their risk for professional and outpatient ancillary services. Physician organizations benefit when successful in managing the risk, and from having greater control over medical management decisions. HMOs carefully assess the physician organization's ability to manage capitated risk and provide high-quality care. HMOs gather information on the physician organization's finances, business relationships, physician compensation arrangements, credentialing, hospital relationships, ancillary contracts, procedures for 24-hour care, claims administration, member services, information systems for reporting and tracking utilization, and procedures for utilization/quality management. These data are analyzed to determine whether capitation contract negotiation should proceed.