ASA is pleased to present the annual commercial conversion factor survey for 2020. Each summer we 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.

Summary

Based on the 2020 survey results, the national average commercial conversion factor was $82.14, ranging between $76.09 and $85.75 for the five contracts. The national median increased to $73.00, ranging between $69.00 and $77.25 for the five contracts (Figure 1, Table 1). In the 2019 survey, the mean conversion factor ranged between $73.79 and $80.76, and the median ranged between $69.00 and $78.00. In contrast, the current national Medicare conversion factor for anesthesia services is $22.2016, or about 27.03% of the 2020 overall mean commercial conversion factor.

Figure 1 shows the frequency in percent and distribution of contract values. In order to show all the values in limited space, we are using a broken axis for all plots. The ranges plotted are $0-$200, with a break indicated by wavy lines and then $310-$330. 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 238 practices in 43 states. The 2019 survey results included data from 270 practices in 43 states.

Methodology

The survey was disseminated in June and July 2020. 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 particpants provide 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 represent more than 25% 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 we provide state-specific data for only those states. We have 17 Eligible States this year.

“Based on the 2020 survey results, the national average commercial conversion factor was $82.14, ranging between $76.09 and $85.75 for the five contracts.”

This is the tenth year we offered the survey electronically through the website www.surveymonkey.com. ASA urged participation through various electronic mail offerings, including ASA committee list serves, ASAP Weekly (all-member e-mail digest), Vital Signs, the Monday Morning Outreach, communications to state component societies and our Anesthesia Administator and Executive (AAE) members, and via the ASA website.

The responses to the survey represented 246 unique practices. However, due to respondents providing incomplete data, we excluded eight responses from the overall analysis. Our results are based on the data from 238 practices.

Results

Table 2 presents respondent information for 197 practices (41 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) (asamonitor.pub/30PLj9B). 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 197 practices employ or contract with 7,172.7 full-time equivalent (FTE) physician anesthesiologists, 5,094.8 FTE nurse anesthetists, and 557.5 FTE anesthesiologist assistants (AAs). The practices also work with an additional 877.2 FTE nurse anesthetists and 80 FTE AAs for whom the practice does not directly pay compensation (i.e., facility hires or contracts the nurse anesthetist or AA).

The 238 practices reported a total of 1,015 managed care contracts. This is fewer than the 1,125 contracts reported last year.

Table 3 provides the same respondent information by Minor Geographic Region as identified by the 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

Nine hundred eighty-two (982) of the contracts are based upon a 15-minute unit, 11 upon a 12-minute unit, 16 are based upon a 10-minute unit and six 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 1.4208 for 8-minute units, 1.2404 for 10-minute units and 1.1202 for 12-minute units (Table 4).

“The highest conversion factor reported was $323.22. In 2019 the highest conversion factor reported was $256.50.”

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 (asamonitor.pub/3gRrtQD), which represents over 21 million anesthesia claims.

The mean time was 72.405 minutes and mean base units per case were 5.211 base units. Making the same calculations described above, the adjustment factors are very similar to last year: 1.411 for 8-minutes units, 1.235 for 10-minute units, and 1.117 for 12-minute units.

Groups continue to report flat fee contracts for certain procedures. Table 5 shows respondents who identified that they had flat fee contracts. 88 of the 158 groups (55.7%) responding to this question negotiated at least one flat fee contract. 44.3% 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 (238), but also the highest average percentage of managed care business (21.1%, Table 1). We also reported the total number of responses for each contract in Table 1. Figure 2 shows the contract data for each major region as a box-and-whiskers plot.

“In the 2019 survey, the Medicare conversion factor was 28.9% of the overall commercial mean. In this year's survey, it has fallen to 27.03%.”

We had a sufficient data sample to provide detailed information for all ten MGMA Minor Regions (Figure 3). Table 7 shows contract data for the minor regions.

This is the sixth year we are presenting state-specific data. Although we had respondents from 43 states, only 17 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 2021 CF study and increase the state-level detail of our reporting.

Observations

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

  • The national average conversion factor increased to $82.14, while the median, $73.00 and the range of mean values increased from a range of $73.79 - $80.76 in 2019 to a range of $76.09 - $85.75 in 2020.

  • As was the case in our 2018 and 2019 surveys, the Eastern Region has the highest mean this year. The Eastern Region mean in 2019 was $86.73 and this year it is $97.85.

  • The highest conversion factor reported was $323.22. In 2019 the highest conversion factor reported was $256.50.

  • In the 2019 survey, the Medicare conversion factor was 28.9% of the overall commercial mean. In this year's survey, it has fallen to 27.03%.

“We will continue to monitor the trends in the commercial conversion factor survey results and will launch the survey again in June.”

Conclusions

This year's survey was challenged as many practices were coping with the COVID-19 pandemic. Our sample size was slightly less this year, but still represents a significant portion of US practicing anesthesiologists, nurse anesthetists and anesthesiologist assistants. We were pleased to have respondents report across a broad geographic basis, allowing us to provide detailed regional responses. The number of practices reporting allowed us to report state-specific data from 17 states. 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 2021. It is important that as many practices as possible participate in the 2021 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 state. We look forward to your future participation and thank all of the practices that contributed to the 2020 results.