ASA is pleased to present the annual commercial conversion factor survey for 2018. Each summer we anonymously 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 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 2018 ASA commercial conversion factor survey results, the national average commercial conversion factor was $76.32, ranging between $73.26 and $81.32 for the five contracts. The national median was $71.81, ranging between $68.00 and $76.34 for the five contracts (Figure 1, Table 1). In the 2017 survey, the mean conversion factor ranged between $70.87 and $83.38 and the median ranged between $67.00 and $76.30. In contrast, the current national Medicare conversion factor for anesthesia services is $22.1887, or about 29.1 percent of the 2018 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 254 practices in 45 states, an increase from last year’s survey. The 2017 survey results included data from 221 practices in 42 states.
The survey was disseminated in June/July 2018. 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:
There are at least five providers reporting data upon which each disseminated statistic is based, and
No individual provider’s data represents more than 25 percent on a weighted basis of that statistic, and
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 provided state-specific data for only those states. We have 17 Eligible States this year, a new high.
This is the eighth year that 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 (all-member weekly e-mail digest), Vital Signs, the Monday Morning Outreach, Timely Topics and via the ASA website.
The responses to the survey represented 258 unique practices. However, due to respondents providing incomplete data, we excluded four responses from the overall analysis. Our results are based on the data from 254 practices.
Table 2 presents respondent information for 220 practices (34 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 220 practices employ or contract with 6,935 full-time equivalents (FTE) physician anesthesiologists, 7,763 FTE nurse anesthetists and 776 FTE anesthesiologist assistants (AAs). The practices also work with an additional 685 FTE nurse anesthetists and 46 FTE anesthesiologist assistants for whom the practice does not directly pay compensation (i.e., facility hires or contracts the nurse anesthetist or AA).
The 254 practices reported a total of 962 managed care contracts. This is 4.7 percent more than the 919 contracts reported last year.
Table 3 provides the same respondent information by Minor Geographic Region as identified by the Medical Group Management Association (MGMA). Again, 34 practices did not provide us with practice demographics.
■ 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 twenty-eight (928) of the contracts are based upon a 15-minute unit, eight upon a 12-minute unit, 16 are based upon a 10-minute unit and 10 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 as done in previous surveys.
The adjustment factors we used for this normalization are calculated as ratios based on the mean time and mean base units per case. To make these calculations we have used the national means published in the MGMA Cost Survey for Anesthesia and Pain Management Practices Data Dive. Last year we confirmed the adjustments with the CMS Physician/Supplier Procedure Summary (PSPS) data set2 , which represents over 16 million anesthesia claims. This year we used the CMS data set to calculate adjustments between different time units.
The mean time units were 75.77 minutes and mean base units per case were 5.05 base units. Making the same calculations described above, the adjustment factors are identical to last year: 1.438 for 8-minute units, 1.25 for 10-minute units and 1.125 for 12-minute units (Table 4).
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; 108 of the 254 groups (42.5 percent) responding to this question negotiated at least one flat fee contract. 37.4 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 (254), but also the highest average percentage of managed care business (20.8 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.
This is the fourth year we are presenting state-specific data. Although we had respondents from 45 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 2019 CF study and increase the state-level detail of our reporting.
Based on our review of the analysis, the most interesting findings include:
■ The national average conversion factor decreased to $76.32, while the median, $71.81, and the range of mean values remained nearly the same from a range of $70.87 - $83.38 in 2017 to a range of $73.26 - $81.32 in 2018.
■ Conversion factors across the country are similar, with the Eastern Region still having the highest mean of $82.22.
■ Every region and nearly every contract category had a reported conversion factor high of at least $110.00. The highest conversion factor reported was $230.00. In 2017 these figures were $112.07 and $280.00, respectively.
This year’s survey represents an increased sample size to the 2017 ASA CF Survey. Respondents reported across a broad geographic basis, allowing us to provide detailed regional responses. The increased number of practices allowed 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 2019. It is important that as many practices as possible participate in the 2019 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 the practices that contributed to the 2018 results.