ASA is pleased to present the annual commercial conversion factor survey for 2021. 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 2021 ASA commercial conversion factor survey results, the national average commercial conversion factor was $85.23, ranging between $79.04 and $90.23 for the five contracts. The national median increased to $78.00, ranging between $74.00 and $81.50 for the five contracts (Figure 1, Table 1). In the 2020 survey, the mean conversion factor ranged between $76.09 and $85.75, and the median ranged between $69.00 and $77.25. In contrast, the current national Medicare conversion factor for anesthesia services is $21.5600, or about 25.30% of the 2021 overall mean commercial conversion factor.

Table 1:

National Managed Care Anesthesia Conversion Factors ($/unit), 2021

National Managed Care Anesthesia Conversion Factors ($/unit), 2021
National Managed Care Anesthesia Conversion Factors ($/unit), 2021

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 $280-$300. 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 219 practices in 47 states and D.C. The 2020 survey results included data from 238 practices in 43 states.

Methodology

The survey was disseminated in June and July 2021. 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 have been 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% 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 provide state-specific data for only those states. We have 18 Eligible States this year.

This is the eleventh 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, communications to state component societies and our Anesthesia Administator and Executive (AAE) members, and via the ASA website.

The responses to the survey represented 233 unique practices. However, due to respondents providing incomplete data, we excluded 14 responses from the overall analysis. Our results are based on the data from 219 practices.

Results

Table 2 presents respondent information for 199 practices (20 practices did not provide us with complete 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

Table 2:

Respondent Information by Major Geographic Region, 2021

Respondent Information by Major Geographic Region, 2021
Respondent Information by Major Geographic Region, 2021

These 199 practices employ or contract with 7,213.6 full-time equivalent (FTE) physician anesthesiologists, 5,211.5 FTE nurse anesthetists, and 1,333.2 FTE anesthesiologist assistants (AAs). The practices also work with an additional 1,758.7 FTE nurse anesthetists and 264 FTE AAs for whom the practice does not directly pay compensation (i.e., facility hires or contracts the nurse anesthetist or AA).

The 219 practices reported a total of 933 managed care contracts. This is fewer than the 1,015 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.

Table 3:

Respondent Information by Minor Geographic Region, 2021

Respondent Information by Minor Geographic Region, 2021
Respondent Information by Minor Geographic Region, 2021

Nine hundred two (902) of the contracts are based upon a 15-minute unit, 20 upon a 12-minute unit, and 11 are based upon a 10-minute unit. None were based upon an 8-minute unit. We normalized all contract conversion factors with 10- and 12-minute time units to the typical 15-minute time unit using an adjustment factor of 1.223 for 10-minute units and 1.112 for 12-minute units (Table 4).

Table 4:

Conversion Factor Adjustment Based on Time Units, 2021

Conversion Factor Adjustment Based on Time Units, 2021
Conversion Factor Adjustment Based on Time Units, 2021

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, which represents over 21 million anesthesia claims (asamonitor.pub/3jr8COX).

The mean time was 64.0949 minutes, and mean base units per case were 5.2865 base units. Making the same calculations described above, the adjustment factors are similar to last year: 1.2404 for 10-minute units and 1.1202 for 12-minute units. Of note, the mean time has decreased by 8.3 minutes since last year's mean time of 72.405 minutes.

Groups continue to report flat fee contracts for certain procedures. Table 5 shows respondents who identified that they had flat fee contracts. One hundred three of the 183 groups (56.3%) responding to this question negotiated at least one flat fee contract. Eighty-two of the 103 groups that reported having flat fees (44.8%) have flat fee contracts for Labor and Delivery. This is very similar to last year's rate of 44.3%.

Table 5:

Respondents Having Flat Fee Components, 2021

Respondents Having Flat Fee Components, 2021
Respondents Having Flat Fee Components, 2021

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 (219) but also the highest average percentage of managed care business (20.4%, 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.

Table 6:

Major Region Managed Care Anesthesia Conversion Factors ($/unit), 2021

Major Region Managed Care Anesthesia Conversion Factors ($/unit), 2021
Major Region Managed Care Anesthesia Conversion Factors ($/unit), 2021

We had a sufficient data sample to provide detailed information for all 10 MGMA Minor Regions (Figure 3). Table 7 shows contract data for the minor regions.

Table 7:

Minor Region Managed Care Anesthesia Conversion Factors ($/unit), 2021

Minor Region Managed Care Anesthesia Conversion Factors ($/unit), 2021
Minor Region Managed Care Anesthesia Conversion Factors ($/unit), 2021

This is the seventh year we are presenting state-specific data. Although we had respondents from 47 states and D.C., only 18 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 2022 CF study and increase the state-level detail of our reporting.

Table 8:

Eligible States Managed Care Anesthesia Conversion Factors ($/unit), 2021

Eligible States Managed Care Anesthesia Conversion Factors ($/unit), 2021
Eligible States Managed Care Anesthesia Conversion Factors ($/unit), 2021

Observations

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

  • The national average conversion factor increased to $85.23, while the median, $78.00, and the range of mean values increased from a range of $76.09-$85.75 in 2020 to a range of $79.04-$90.23 in 2021.

  • As was the case in our 2018-2020 surveys, the Eastern Region has the highest mean this year. The Eastern Region mean in 2020 was $97.85, and this year it is $93.16.

  • The highest conversion factor reported was $292.00. In 2020, the highest conversion factor reported was $323.22.

  • In the 2020 survey, the Medicare conversion factor was 27.03% of the overall commercial mean. In this year's survey, it has fallen to 25.30%.

Conclusions

Our sample size for this year's survey was slightly less than last year but still represents a significant portion of U.S. practicing anesthesiologists, nurse anesthetists, and AAs. We were pleased to have respondents report across a broad geographic basis, 47 states and D.C., allowing us to provide detailed regional responses. The number of practices reporting allowed us to report state-specific data from 18 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 trends in the commercial conversion factor survey results and will launch the survey again in June 2022. It is important that as many practices as possible participate in the 2022 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 2021 results.

Stanley W. Stead, MD, MBA, FASA, CEO, Stead Health Group, Inc.

Stanley W. Stead, MD, MBA, FASA, CEO, Stead Health Group, Inc.

Sharon K. Merrick, MS, CCS-P, ASA Director of Payment and Practice Management.

Sharon K. Merrick, MS, CCS-P, ASA Director of Payment and Practice Management.