Earlier this month, the American Society of Anesthesiologists (ASA) released their annual Commercial Payer Survey results for 2020. Below you’ll find our brief analysis to help you evaluate and negotiate your own managed care contracts for 2021.
Overall, the 2020 national average conversion factor was $82.14, ranging between $76.09 and $85.75 across participating practices’ top five commercial plans. This represents around a 7 percent increase from 2019, when the average commercial conversion factor was $77.01 nationwide, ranging between $73.79 and $80.76.
By way of comparison, the 2020 national Medicare conversion factor for anesthesia services was $22.2016, or about 27.03 percent of the average commercial factor. In 2019, the Medicare conversion rate was $22.27, which was 28.9 percent of the 2019 overall mean commercial conversion factor. For 2021, the proposed Medicare anesthesia conversion factor is $19.96.
When dividing the US into four regions, the average conversion factors are (in order from highest to lowest): East – $97.85; Midwest – $70.44; South – $80.00; West – $82.70. In Indiana, the average commercial factor is $74.10, up from $73.70 in 2019 and higher than the median of other reporting states ($73.00), but nearly 10 percent lower than the national average.
Every region and every contract type had a conversion factor high of at least $144.00, up from $120.00 in 2019. The highest conversion factor reported was $323.22, up from $256.50 in 2019.
Also of interest, in 2020 55.7 percent, or 88 of the 158 groups who responded, negotiated at least one flat fee contract, up from 53.4 percent in 2019. And more than 44.3 percent of the respondents have flat fee contracts for labor and delivery, down from 47.3 percent in 2019.
Methodology and Demographics
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 2020, 238 practices representing 43 states responded. Those practices reported on a total of 1,015 managed care contracts, slightly lower than the 1,125 managed contracts reported on in 2019. Overall, the managed care plans reported on represent 9.34 percent of the practices total managed care business for 2020.
Of the responding practices, demographic information was provided by 197, which employ or contract with the following: 7,172.7 full-time equivalents physician anesthesiologists, 5,094.8 FTE nurse anesthetists, and 557.5 FTE anesthesiologist assistants. As well, those practices work with the following additional staff not directly employed by them: 877.2 FTE nurse anesthetists and 80 FTE AAs.
What the Data Means to You
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 recommended each year, 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? The national and state averages have gone up in the last year; has your reimbursement for managed care plans?
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. Or simply provide the ASA Commercial Survey results with your state and regions highlighted. Don’t forget to renegotiate flat fee and/or labor and delivery rates, too.
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 for billing out-of-network payers. 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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