ASA Survey Results for Commercial Fees Paid for Anesthesia Services payment and practice manaement

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1 payment and practice manaement ASA Survey Results for Commercial Fees Paid for Anesthesia Services 2015 Stanley W. Stead, M.D., M.B.A. Sharon K. Merrick, M.S., CCS-P ASA is pleased to present the annual commercial conversion factor survey for 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 of the survey are to report to our members the average contractual amounts for the top five contracts and to present a regional survey of trends in commercial contracting. Summary Based on the 2015 ASA commercial conversion factor survey results, the national average commercial conversion factor was $71.92, ranging between $69.64 and $74.29 for the five contracts. The national median was $68.00, ranging between $65.00 and $69.00 for the five contracts (Figure 1, Table 1). In the 2014 survey, the mean conversion factor ranged between $66.98 and $71.79, and the median ranged between $63.88 and $ In contrast, the current national Medicare conversion factor for anesthesia services was $ (January 1-June 30) and $ after July 1, 2015, or about 31 percent of the 2015 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. Stanley W. Stead, M.D., M.B.A. is ASA Vice President for Professional Affairs and Professor of Anesthesia and Perioperative Care, University of California, Irvine. Sharon K. Merrick, M.S., CCS-P, is ASA Director of Payment and Practice Management. 48 Downloaded From: on 05/02/2018

2 Table 1: National Managed Care Anesthesia Conversion Factors ($/unit), 2015 Conversion Factors Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 ALL Mean $69.64 $71.46 $72.19 $74.29 $73.48 $71.92 Low $41.00 $39.00 $31.00 $40.00 $30.10 $ th Percentile $60.00 $59.00 $60.00 $60.00 $62.00 $60.00 Median $65.00 $66.76 $68.00 $70.00 $69.00 $ th Percentile $72.30 $80.00 $82.00 $80.00 $83.00 $78.96 High $ $ $ $ $ $ Number of Responses Percentage of Managed Care Business 21.0% 12.9% 7.7% 4.9% 4.2% 11.3% 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 183 practices in 38 states, a decrease from last year s survey. The 2014 survey results included 190 practices from 41 states. Methodology The survey was disseminated in June 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 states that submitted sufficient data to be compliant with DOJ and FTC principles and provided state-specific data for only those states. This is the fifth year we offered the survey electronically through the website ASA urged participation through various electronic mail offerings, including ASA committee listserves, ASAP (all-member weekly digest), Vital Signs and via the ASA website. Continued on page 50 Table 2: Respondent Information by Major Geographic Region, 2015 Region Practices Cases Mean Units/ FTE M.D. Mean Units/ Case FTE M.D. FTE Nurse Anesthetist FTE AA Eastern 52 1,764,993 14, , ,233.8 [313.0] 29.0 [12.0] Midwest 44 1,201,340 24, ,041.6 [95.5] [5.0] Southern 45 1,311,246 17, ,325.0 [336.1] Western ,071 9, , [42.0] [8.0] ALL 183 5,098,650 16, , ,838.1 [786.6] [25.0] (Numbers in brackets indicate the number of non-employed FTEs) 49

3 Continued from page 49 The responses to the survey represented 194 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 183 practices. Results Table 2 (page 49) presents respondent information for the 183 practices in the analytic sample per Major Geographic Region as identified by the Medical Group Management Association (MGMA). These regions are as follows: n Eastern: CT, DE, D.C., ME, MD, MA, NH, NJ, NY, NC, PA, RI, VT, VA, WV n Midwestern: IL, IN, IA, MI, MN, NE, ND, OH, SD, WI n Southern: AL, AR, FL, GA, KS, KY, LA, MS, MO, OK, SC, TN, TX n Western: AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, WY These practices employ or contract with 4,672 full-time equivalents (FTE) physician anesthesiologists, 3,838 FTE nurse anesthetists and FTE anesthesiologist assistants (AAs). The practices also work with an additional FTE nurse anesthetists and 25 FTE AAs for whom the practice does not directly pay compensation (i.e., facility hires or contracts the nurse anesthetist or AA). The 183 practices reported a total of 789 managed care contracts. Table 3 provides the same respondent information by Minor Geographic Region as identified by MGMA. n CAAKHI: CA, AK, HI n Eastern Midwest: IL, IN, KY, MI, OH n Lower Midwest: AR, KS, LA, MO, OK, TX n Mid Atlantic: D.C., DE, MD, VA, WV n North Atlantic: NJ, MY, PA n Northeast: CT, MA, ME, NH, RI, VT n Northwest: ID, OR, WA Table 3: Respondent Information by Minor Geographic Region, 2015 Region Practices Cases Units/ FTE M.D. Units/ Case FTE M.D. FTE Nurse Anesthetist FTE AA CAAKHI ,844 7, [40.0] 56.0 Eastern Midwest 39 1,142,558 24, ,048.0 [95.5] [5.0] Lower Midwest ,380 13, [2.0] 44.0 Mid Atlantic 8 142,614 13, [19.0] - North Atlantic 28 1,190,807 14, , [51.0] 7.0 Northeast ,036 12, [40.0] 22.0 [12.0] Northwest ,099 9, [2.0] 33.0 [8.0] Rocky Mountain ,128 11, Southeast ,904 20, [537.1] 84.6 Upper Midwest 8 193,280 14, ALL 183 5,098,650 16, , ,838.1 [786.6] [25.0] (Numbers in brackets indicate the number of non-employed FTEs) Table 4: Conversion Factor Adjustment Based on Time Units, 2015 Base Units 7.46 Sum of Base and Time Units CF Value Ratio Based for 15-minute Units Minutes/Case minute time units minute time units minute time units minute time units Mean Minutes per Case, Base Unit and Time Unit taken from MGMA DataDive 2014: Cost Survey and Revenue Module for Anesthesia and Pain Management Practices. 50

4 n Rocky Mountain: AZ, CO, MT, NM, NV, UT, WY n Southeast: AL, FL, GA, MS, NC, SC, TN n Upper Midwest: IA, MN, ND, NE, SD, WI Seven hundred fifty-five (755) of the contracts are based upon a 15-minute unit, 23 upon a 12-minute unit, 10 are based upon a 10-minute unit and one is 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 for eightminute units, for 10-minute units and for 12-minute units (Table 4). Similar to the 2014 survey, the adjustment factors are calculated as ratios based on the average number of time and base units per case. To make these calculations, we used the national medians published in the MGMA Cost Survey for Anesthesia and Pain Management Practices 2014 Data Dive Based on 2013 Data. More groups are reporting that payers have approached them for flat fee contracts for certain procedures. Table 5 shows respondents who identified that they had flat fee contracts. One hundred thirteen of the 183 groups (61.7 percent) negotiated at least one flat fee contract. This is a growth of 10 percent over percent of the respondents have flat fee contracts for labor and delivery. Respondents in the Western region are least likely to have flat fee contracts. Continued on page 52 Table 5: Respondents Having Flat Fee Components, 2015 Flat Fee (Any) Labor & Delivery Cataracts Endoscopy Pain Other Eastern Midwest Southern Western Total

5 Continued from page 51 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 (194) but also the highest average percentage of managed care business (21.0 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, page 51). Table 7 (page 54) shows contract data for the minor regions. This year we are presenting state-specific data for those eligible states (Figure 4, page 53 and Table 8, page 54) whose Table 6: Major Region Managed Care Anesthesia Conversion Factors ($/unit), 2015 Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 ALL Eastern n=56 n=54 n=50 n=40 n=33 n=233 Mean $78.45 $76.37 $78.39 $79.96 $76.63 $77.96 Low $45.00 $46.00 $45.00 $52.00 $30.10 $ th Percentile $64.00 $62.40 $60.50 $68.50 $66.62 $64.00 Median $72.65 $74.64 $77.70 $74.50 $73.00 $ th Percentile $84.13 $86.50 $91.00 $88.55 $87.00 $88.00 High $ $ $ $ $ $ Midwest n=48 n=47 n=41 n=34 n=23 n=193 Mean $64.89 $67.41 $65.85 $69.80 $72.55 $67.49 Low $41.00 $40.00 $45.00 $40.00 $46.75 $ th Percentile $56.83 $56.62 $57.77 $59.00 $56.00 $57.00 Median $62.39 $65.00 $64.67 $65.50 $70.00 $ th Percentile $69.75 $72.00 $69.00 $74.34 $75.71 $72.00 High $ $ $ $ $ $ Southern n=47 n=44 n=36 n=29 n=23 n=179 Mean $62.23 $68.76 $70.89 $73.81 $67.93 $68.18 Low $44.00 $39.00 $39.00 $52.00 $45.00 $ th Percentile $57.39 $54.50 $63.00 $63.00 $60.00 $59.00 Median $61.00 $67.20 $70.00 $71.40 $67.00 $ th Percentile $71.00 $77.63 $79.50 $77.00 $75.00 $75.00 High $82.00 $ $ $ $ $ Western n=43 n=43 n=40 n=36 n=22 n=184 Mean $71.58 $72.49 $72.12 $72.59 $75.52 $72.58 Low $50.00 $40.00 $31.00 $41.00 $53.00 $ th Percentile $60.00 $59.44 $60.50 $59.25 $63.39 $60.00 Median $65.00 $64.48 $64.00 $68.36 $66.50 $ th Percentile $72.00 $78.15 $77.45 $75.50 $79.00 $75.00 High $ $ $ $ $ $

6 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 2016 CF study. Observations Based on our review of the analysis, the most interesting findings include: n The national average conversion factor increased from a range of $66.98-$71.79 in 2014 to a range of $69.64-$ Also, the median conversion factor range broadened from $63.88-$69.00 in 2014 to $65.00-$ n Conversion factors across the country are similar, with the Eastern Region still having the highest mean of $ n Every region and nearly every contract category had a reported conversion factor high of at least $ The highest conversion factor reported was $ Conclusions This year s survey represents a similar sample size to the 2014 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 It is important that as many practices as possible participate in the 2016 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. Reference: 1. MGMA DataDive Cost and Revenue Module for Anesthesia and Pain Management Practices [database]. Englewood, Colorado: MGMA-Medical Group Management Association; Accessed August 24, Continued on page 54 53

7 Continued from page 53 Table 7: Minor Region Managed Care Anesthesia Conversion Factors ($/unit), 2015 MGMA Minor Region Contracts Low 25th Percentile Median Mean 75th Percentile High CAAKHI 52 $31.00 $54.08 $66.50 $72.31 $81.93 $ Eastern Midwest 171 $40.00 $56.00 $63.00 $64.78 $71.50 $ Lower Midwest 46 $39.00 $52.00 $60.00 $61.78 $71.00 $88.00 Mid Atlantic 40 $42.00 $60.48 $67.00 $64.41 $69.00 $89.10 North Atlantic 123 $33.01 $65.00 $79.00 $81.09 $91.00 $ Northeast 50 $30.10 $70.00 $80.44 $80.98 $87.09 $ Northwest 54 $50.00 $58.50 $63.20 $63.61 $66.52 $95.24 Rocky Mountain 78 $53.73 $63.39 $69.46 $78.97 $80.00 $ Southeast 141 $44.00 $62.00 $70.00 $72.26 $78.50 $ Upper Midwest 34 $59.00 $64.47 $69.50 $79.05 $88.99 $ ALL 789 $30.10 $60.00 $68.00 $71.92 $78.96 $ Table 8: Eligible States Managed Care Anesthesia Conversion Factors ($/unit), 2015 State Contracts Low 25th Percentile Median Mean 75th Percentile High AL 10 $49.50 $57.00 $61.00 $59.80 $62.00 $72.00 CA 48 $46.50 $54.69 $68.00 $74.80 $86.25 $ FL 27 $45.00 $68.00 $72.00 $73.51 $79.00 $ GA 39 $45.00 $65.00 $72.00 $69.95 $75.00 $ IL 31 $50.00 $60.00 $67.00 $74.51 $74.00 $ IN 27 $40.00 $51.00 $59.00 $60.38 $65.00 $ MI 44 $46.00 $52.43 $56.00 $59.11 $60.25 $95.54 NC 20 $58.00 $63.80 $77.15 $78.26 $92.08 $99.00 NJ 25 $53.00 $65.00 $85.00 $86.40 $93.00 $ NY 58 $52.54 $76.00 $86.50 $90.14 $ $ OH 57 $41.00 $63.00 $67.64 $66.60 $72.50 $77.74 PA 40 $33.01 $57.00 $61.00 $64.63 $72.65 $92.00 SC 29 $44.00 $62.00 $71.25 $77.43 $91.00 $ TN 16 $45.00 $60.00 $69.00 $66.70 $70.70 $92.00 TX 26 $39.00 $60.00 $68.50 $66.81 $80.00 $88.00 UT 39 $56.00 $63.39 $65.00 $68.74 $72.69 $88.50 WA 49 $50.00 $57.50 $63.25 $63.79 $66.52 $

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