Stanley W. Stead, M.D., M.B.A., FASA, is CEO of Stead Health Group, Inc.

Stanley W. Stead, M.D., M.B.A., FASA, is CEO of Stead Health Group, Inc.

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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 2019. Each summer we survey anesthesiology practices across the country. We ask them to report up to five of their largest managed care (commercial) contracts 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 2019 ASA commercial conversion factor survey results, the national average commercial conversion factor was $77.01, ranging between $73.79 and $80.76 for the five contracts. The national median slightly increased to $72.00, ranging between $69.00 and $78.00 for the five contracts (Figure 1, Table 1). In the 2018 survey, the mean conversion factor ranged between $73.26 and $81.32 and the median ranged between $68.00 and $76.34. In contrast, the current national Medicare conversion factor for anesthesia services is $22.2730, or about 28.9 percent of the 2019 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. We have added a box-and-whiskers plot of the same data immediately below the histogram. The left and right whiskers delineate the minimum and maximum values. The box represents the interquartile range, the left edge of the box is the 25th percentile, the vertical line in the box is the median, and the right edge of the box is the 75th percentile. The solid diamond in the box is the mean.

Table 1 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 270 practices in 43 states. The 2018 survey results included data from 254 practices in 45 states.

The survey was disseminated in June/July 2019. 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 from participants data 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 states that submitted sufficient data to be compliant with DOJ and FTC principles, and provide state-specific data for only those states. We have 25 Eligible States this year, a new high.

This is the ninth year that we offered the survey electronically 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, the Monday Morning Outreach and via the ASA website.

The responses to the survey represented 301 unique practices. However, due to respondents providing incomplete data, we excluded 11 responses from the overall analysis. Our results are based on the data from 290 practices.

Table 2 presents respondent information for 270 practices (20 practices did not provide us with practice demographics) in the analytic sample per Major Geographic Region as identified by the Medical Group Management Association (MGMA).1  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 270 practices employ or contract with 8,570.3 full-time equivalents (FTE) physician anesthesiologists, 7,825.7 FTE nurse anesthetists and 707.6 FTE anesthesiologist assistants (AAs). The practices also work with an additional 1,112.8 FTE nurse anesthetists and 44 FTE anesthesiologist assistants for whom the practice does not directly pay compensation (i.e., facility hires or contracts the nurse anesthetist or AA).

The 290 practices reported a total of 1,125 managed care contracts. This is 16.9 percent more than the 962 contracts reported last year.

Table 3 provides the same respondent information by Minor Geographic Region as identified by the Medical Group Management Association (MGMA). Unfortunately, due to an insufficient number of responses, we are unable to provide data specific to the Northeast Minor Geographic Region.

  • ■ 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

One thousand sixty-six (1,066) of the contracts are based upon a 15-minute unit, 12 upon a 12-minute unit, 33 are based upon a 10-minute unit and 14 are based upon an 8-minute unit. We normalized all contract conversion factors with 8- 10- and 12-minute time units to the typical 15-minute time unit using an adjustment factor of 1.411 for 8-minute units, 1.235 for 10-minute units and 1.117 for 12-minute units (Table 4).

The adjustment factors are calculated as ratios based on the mean time and mean base units per case. To make these calculations, we have used the CMS Physician/Supplier Procedure Summary (PSPS) data set,2  which represents over 21 million anesthesia claims.

The mean time was 71.261 minutes and mean base units per case were 5.35 base units. Making the same calculations described above, the adjustment factors are nearly identical from last year: 1.438 for 8-minutes units, 1.25 for 10-minute units, and 1.125 for 12-minute units.

Groups continue to report that payers are approaching them for flat fee contracts for certain procedures. Table 5 shows respondents who identified that they had flat fee contracts. 141 of the 264 groups (53.4 percent) responding to this question negotiated at least one flat fee contract. 47.3 percent of the respondents have flat fee contracts for Labor and Delivery.

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 (290), but also the highest average percentage of managed care business (20.7 percent, Table 1). We also reported the total 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 for nine of the 10 MGMA Minor Regions (Figure 3). Table 7 shows contract data for the minor regions.

This is the fifth year we are presenting state-specific data. Although we had respondents from 43 states, only 25 states were identified as eligible states (Figure 4, Table 8). Eligible states were those that complied with the DOJ and FTC requirements, listed above. We believe by providing this data, we can encourage more participation in the 2020 CF study and increase the minor region and state-level detail of our reporting.

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

  • ■ The national average conversion factor increased to $77.01, while the median, $72.00 and the range of mean values remained nearly the same from a range of $73.26 - $81.32 in 2018 to a range of $73.79 - $80.76 in 2019.

  • ■ As was the case in our 2018 survey, the Eastern Region has the highest mean this year. The Eastern Region mean in 2018 was $82.22 and this year it is $86.73.

  • ■ The highest conversion factor reported was $256.50. In 2018 the highest conversion factor reported was $230.00.

While this year’s survey represents a 16.9 percent increase in sample size compared to the 2018 ASA CF Survey, we did not receive a sufficient number of responses from the states within the Northeast Minor Region to include that area of the country in our detailed regional responses. The increased number of practices from a broader geographic basis did allow us to report more state-specific data. Most practices included complete demographic information and we are hopeful that this trend will continue, and all respondents will supply complete information in future surveys.

We will continue to monitor the trends in the commercial conversion factor survey results and will launch the survey again in June 2020. It is important that as many practices as possible participate in the 2020 survey to help us obtain an accurate representation of the anesthesia commercial conversion factor. We hope that a significant growth in participants will allow us to publish data for every minor region and state. We look forward to your future participation and thank all of the practices that contributed to the 2020 results.

Medical Group Management Association (MGMA) website
. Last accessed August 20, 2019
2017 CMS Physician/Supplier Procedure Summary (PSPS) Master File (“Master File”)
Centers for Medicare & Medicaid Services (CMS) website
. Last updated January 9, 2017. Last accessed August 20, 2019