Earlier this month, the American Society of Anesthesiologists (ASA) released their annual Commercial Payer Survey results for 2021. Below you’ll find our brief analysis to help you evaluate and negotiate your own managed care contracts for 2022.
The Results
Overall, the 2021 national average conversion factor was $85.23, ranging between $79.04 and $90.23 across participating practices’ top five commercial plans. This represents around a 7 percent increase from 2020, when the average commercial conversion factor was $82.14 nationwide, ranging between $76.09 and $85.75.
By way of comparison, the 2021 national Medicare conversion factor for anesthesia services is $21.56, or about 25.30 percent of the average commercial factor. In 2020, the Medicare conversion rate was $22.2016, which was 27.03 percent of the 2020 overall mean commercial conversion factor. For 2022, the proposed Medicare anesthesia conversion factor is $21.04.
When dividing the US into four regions, the average conversion factors are (in order from highest to lowest): East – $93.16; South – $85.01; West – $82.31; Midwest – $79.66. In Indiana, the average commercial factor is $65.45, down from $74.10 in 2020 and more than 23 percent lower than the national average.
Every region and every contract type had a conversion factor high of at least $124.00, down from $144.00 in 2020. The highest conversion factor reported was $292.00, down from $323.22 in 2020.
Also of interest, in 2021 56.3 percent, or 103 of the 183 groups who responded, negotiated at least one flat fee contract, up from 55.7 percent in 2020. And more than 44.8 percent of the respondents have flat fee contracts for labor and delivery, slightly up from 44.3 percent in 2020.
Methodology and Demographics
The ASA Commercial Payer Survey is disseminated each June and July, 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 2021, 219 practices representing 47 states responded, though only 18 states were identified as eligible states for state-specific reporting. Those practices reported on a total of 933 managed care contracts, down from the 1,015 managed contracts reported on in 2020. Overall, the managed care plans reported on represent 10 percent of the practices total managed care business for 2021.
Of the responding practices, demographic information was provided by 199, which employ or contract with the following: 7,213.6 full-time equivalent (FTE) physician anesthesiologists, 5,211.5 FTE nurse anesthetists, and 1,333.2 FTE anesthesiologist assistants. As well, those practices work with the following additional staff not directly employed by them: 1,758.7 FTE nurse anesthetists and 264 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:
Benchmark
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 averages have gone up in the last year, but here in Indiana, our state averages have gone down. How has your reimbursement for managed care plans fared in 2021?
Renegotiate
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.
Update
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 was 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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