Last fall, the American Society of Anesthesiologists (ASA) released their annual ASA Commercial Payer Survey results for 2019. Below you’ll find our brief analysis to help you evaluate and negotiate your own managed care contracts for 2020.
Overall, the 2019 national average conversion factor was $77.01, ranging between $73.79 and $80.76 across participating practices’ top five commercial plans. This represents a small increase from 2017, when the average commercial conversion factor was $76.32 nationwide, ranging between $73.26 and $81.32.
By way of comparison, the 2019 national Medicare conversion factor for anesthesia services was $22.2730, or about 28.9 percent of the average commercial factor. In 2018, the Medicare conversion rate was $22.1887, which was about 29.1 percent of the 2018 overall mean commercial conversion factor. For 2020, the Medicare anesthesia conversion factor is $36.09.
When dividing the US into four regions, the average conversion factors are (in order from highest to lowest): East – $86.73; Midwest – $79.16; South – $73.55; West – $73.10. In Indiana, the average commercial factor is $72.85, higher than all but one of the other states in MGMA’s “Eastern Midwest” region, whose average commercial factor was $73.70 in 2019, up from $69.11 in 2018.
Every region and nearly every contract category had a conversion factor high of at least $120.00, up from $110.00 in 2018. The highest conversion factor reported was $256.50, up from $230.00 in 2018.
Also of interest, in 2019 53.4 percent, or 141 of 264 groups who responded, negotiated at least one flat fee contract, up from 52.5 percent in 2018. And more than 47.3 percent of the respondents have flat fee contracts for labor and delivery, up from 37.4 percent in 2018.
The ASA Commercial Payer Survey is disseminated each June, asking providers to report conversion factors of their top five commercial contracts, the percentage of total patient volume each contract represents, and basic demographic information. In 2019, 290 practices representing 43 states responded. Those practices reported on a total of 1,125 managed care contracts, a 16.9 percent increase over the 962 managed contracts reported on in 2018.
Of the responding practices, demographic information was provided by 270, which employ or contract with the following: 8,570.3 full-time equivalents physician anesthesiologists, 7,825.7 FTE nurse anesthetists, and 707.6 FTE anesthesiologist assistants. As well, those practices work with the following additional staff not directly employed by them: 1,112.8 FTE nurse anesthetists and 44 FTE AAs.
This data about commercial fees is more than just interesting. It becomes most meaningful when you use it to help manage your anesthesia practice. As we’ve recommended in past years, here are three ways to use this data in your own practice:
Compare your own reimbursement to these numbers, particularly your top five payers. The full report breaks down the numbers by region and state. How do you compare to other practices in your region?
Armed with the data about how you compare with other practices in your region, approach your commercial payer representatives to begin renegotiating your contracts. For payers that are reimbursing at lower rates compared to your own payer mix, provide redacted reports showing how they compare with other major payers in your area.
Not only do these conversion factor averages help you negotiate for greater reimbursement from your contracted plans, they can also help you ensure your chargemaster is in line with industry averages. When is the last time you evaluated or updated your per unit charge amount? What about flat fee procedures?
Curious to learn more about how you can harness the power of payer information to improve your bottom line? Contact CIPROMS today to discuss more options.
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