Stanley W. Stead, M.D., M.B.A., is Professor of Anesthesia and Perioperative Care, University of California, Irvine. He is ASA Vice President for Professional Affairs.

Stanley W. Stead, M.D., M.B.A., is Professor of Anesthesia and Perioperative Care, University of California, Irvine. He is ASA Vice President for Professional Affairs.

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Sharon K. Merrick, M.S., CCS-P, is ASA Director of Payment and Practice Management.

Sharon K. Merrick, M.S., CCS-P, is ASA Director of Payment and Practice Management.

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ASA is pleased to present the annual commercial conversion factor survey for 2016. Each summer we anonymously survey anesthesiology practices across the country. We ask them to report up to five of their largest managed care (commercial) contract conversion factors (CF) and the percentage each contract represents of their commercial population, along with some demographic information. Our objectives for the survey are to report to our members the average contractual amounts for the top five contracts and to present a view of regional trends in commercial contracting.

Based on the 2016 ASA commercial conversion factor survey results, the national average commercial conversion factor was $71.02, ranging between $68.33 and $74.36 for the five contracts. The national median was $68.00, ranging between $64.00 and $71.00 for the five contracts (Figure 1, Table 1). In the 2015 survey, the mean conversion factor ranged between $69.64 and $74.29 and the median ranged between $65.00 and $69.00. In contrast, the current national Medicare conversion factor for anesthesia services is $21.9935, or about 30.9 percent of the 2016 overall mean commercial conversion factor.

Figure 1 shows the frequency in percent and distribution of contract values. The estimated normal distribution is the solid blue line. Also, we are adding a box-and-whiskers plot of the same data immediately below the histogram. The upper and lower whiskers delineate the minimum and maximum values. The box represents the interquartile range, the bottom of the box is the 25th percentile, the horizontal line in the box is the median and the top of the box is the 75th percentile. The solid diamond in the box is the mean.

Table 1 (page 60) provides the overall survey results by reported managed care contract. As with previous surveys, we requested that participants submit data on five commercial contracts. Most practices submitted three or more contracts. The survey reflects valid responses from 204 practices in 41 states, an increase from last year’s survey. The 2015 survey results included data from 183 practices in 38 states.

The survey was disseminated in June 2016. To comply with the principles established by the Department of Justice (DOJ) and the Federal Trade Commission (FTC) in their 1996 Statements of Antitrust Enforcement Policy in Health Care, the survey requested data from respondents that were at least three months old. In addition, the following three conditions must be met:

  1. There are at least five providers reporting data upon which each disseminated statistic is based, and

  2. No individual provider’s data represents more than 25 percent on a weighted basis of that statistic, and

  3. Any information disseminated is sufficiently aggregated such that it would not allow recipients to identify the prices charged or compensation paid by any particular provider.

To comply with the statements, we are only able to provide aggregated data. Since some states did not respond, and other states had insufficient response rates, we are unable to provide specific data for all states. We term “Eligible States,” those that submitted sufficient data to be compliant with DOJ and FTC principles, and provided state-specific data for only those states.

This is the sixth year we offered the survey electroni-cally through the website ASA urged participation through various electronic mail offerings, including ASA committee list serves, ASAP (all-member weekly e-mail digest), Vital Signs and via the ASA website.

The responses to the survey represented 215 unique practices. However, due to respondents providing incomplete data, we excluded 11 responses for the overall analysis. Our results are based on the data from 204 practices.

Table 2 presents respondent information for the 204 practices in the analytic sample per Major Geographic Region as identified by the Medical Group Management Association (MGMA). These regions are as follows:

  • ■ Eastern: CT, DE, DC, ME, MD, MA, NH, NJ, NY, NC, PA, RI, VT, VA, WV

  • ■ Midwestern: IL, IN, IA, MI, MN, NE, ND, OH, SD, WI

  • ■ Southern: AL, AR, FL, GA, KS, KY, LA, MS, MO, OK, SC, TN, TX

  • ■ Western: AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, WY

These practices employ or contract with 5,886.6 full-time equivalent (FTE) physician anesthesiologists, 5,135.8 FTE nurse anesthetists and 496.2 FTE anesthesiologist assistants (AAs). The practices also work with an additional 817.9 FTE nurse anesthetists and 15 FTE anesthesiologist assistants for whom the practice does not directly pay compensation (i.e., facility hires or contracts the nurse anesthetist or AA). The 204 practices reported a total of 809 managed care contracts. This is 2.5 percent more than the 789 contracts reported last year.

Table 3 provides the same respondent information by Minor Geographic Region as identified by the Medical Group Management Association (MGMA).

  • ■ CAAKHI: CA, AK, HI

  • ■ Eastern Midwest: IL, IN, KY, MI, OH

  • ■ Lower Midwest: AR, KS, LA, MO, OK, TX

  • ■ Mid Atlantic: DC, DE, MD, VA, WV

  • ■ North Atlantic: NJ, NY, PA

  • ■ Northeast: CT, MA, ME, NH, RI, VT

  • ■ Northwest: ID, OR, WA

  • ■ Rocky Mountain: AZ, CO, MT, NM, NV, UT, WY

  • ■ Southeast: AL, FL, GA, MS, NC, SC, TN

  • ■ Upper Midwest: IA, MN, ND, NE, SD, WI

Seven hundred seventy-nine (779) of the contracts are based upon a 15-minute unit, 12 upon a 12-minute unit, 15 are based upon a 10-minute unit and three are based upon an eight-minute unit. We normalized all contract conversion factors with eight-, 10- and 12-minute time units to the typical 15-minute time unit using an adjustment factor of 1.423 for eight-minute units, 1.242 for 10-minute units and 1.121 for 12-minute units (Table 4). Similar to the 2015 survey, the adjustment factors are calculated as ratios based on the mean number of time (94.1 minutes) and mean base units per case (6.69 base units). To make these calculations, we used the national medians published in the MGMA Cost Survey for Anesthesia and Pain Management Practices 2016 Data Dive Based on 2015 Data.

More groups are reporting that payers have approached them for flat fee contracts for certain procedures. Table 5 (page 62) shows respondents who identified that they had flat fee contracts. One hundred seventeen (117) of the 204 groups (57.4 percent) responding to this question negotiated at least one flat fee contract. Fifty one percent of the respondents have flat fee contracts for labor and delivery. Respondents in the Western Region are still likely not to have flat fee contracts.

Table 6 reports the conversion factor by MGMA Major Region. Contract 1 reflected the highest percentage of the reported commercial business, Contract 2 reflected the second highest percentage, and so on. Thus, when looking at the data, you can see that Contract 1 not only reflects the greatest number of responses (204) but also the highest average percentage of managed care business (20.4 percent). We also reported the number of responses for each contract in Table 1. Figure 2 shows the contract data for each region as a box-and-whiskers plot.

We had a sufficient data sample to provide detailed information per MGMA Minor Region (Figure 3). Table 7 (page 65) shows contract data for the minor regions.

This is the second year we are presenting state-specific data for those eligible states (Figure 4, Table 8) whose reporting complied with the DOJ and FTC requirements, listed above. We are hoping that by providing this data, we can encourage more participation in the 2017 CF study.

Based on our review of the analysis, the most interesting findings include:

  • ■ The national average conversion factor remained essentially unchanged from a range of $69.64-$74.29 in 2015 to a range of $68.33-$74.36 in 2016.

  • ■ Conversion factors across the country are similar, with the Eastern Region still having the highest mean of $76.24.

  • ■ Every region and nearly every contract category had a reported conversion factor high of at least $97.00. The highest conversion factor reported was $182.00. In 2015, these figures were $82.00 and $195.00, respectively.

This year’s survey represents a similar sample size to the 2015 ASA CF Survey. Respondents reported on a broad geographic basis, allowing us to provide detailed regional responses. Some states reported a sufficient number of practices and contracts to allow us to do state reporting.

We will continue to monitor the trend in the commercial conversion factor survey results and will launch the survey again in June 2017. It is important that as many practices as possible participate in the 2017 survey to help us obtain an accurate representation of the anesthesia commercial conversion factor. We hope that a significant growth in reporting by state will allow us to publish additional state data. We look forward to your future participation and thank all of the practices that contributed to the 2016 results.

MGMA DataDive Cost and Revenue 2016: Based on 2015 Survey Data