ASA’s fourth biannual survey
of anesthesia fees paid by private insurance carriers
shows a significant increase. The difference between
this year’s conversion factors (CFs) and those
of 2001 is roughly 10 percent. According to early
2003 data supplied by 133 anesthesia practices around
the country, commercial payments per unit or CFs
range between $49.19 and $52.30. The weighted average
CF is $50.55.
In each of the four surveys, we have asked the respondents
for the CFs actually paid by each of their three
highest-volume private (nongovernmental) carriers.
We thus have data for up to three times as many
payer contracts as we do respondents. Table 1 shows
the results for 1997, 1999, 2001 and 2003. As explained
in the report on the 2001 survey, published in the
September 2001
NEWSLETTER, 25th and 75th
percentile data were only calculated beginning that
year. The lowest commercial CF reported has increased
from $22.68 in 1997 to $26 in 2003 (14.6 percent),
and the highest commercial unit payment now stands
at $105, up 35 percent from $78.
State and Regional Conversion Factors
Table 2 contains the average, maximum, minimum and
quartile values for 11 individual states. Regional
data, broken down into five geographic areas, appear
in Table 3. We present the results in this manner
in order to come within the antitrust safety zone
established by the Department of Justice/Federal
Trade Commission for fee survey information: the
government will not prosecute if 1) the data collection
is managed by a third party, e.g., ASA; 2) the information
is more than three months old; and 3) there are
at least five providers reporting data upon which
each statistic is based with no individual provider’s
data representing more than 25 percent on a weighted
basis of that statistic. Only the 11 states in Table
2 yielded at least five usable responses; geographic
aggregates were necessary in order to publish subnational
values for the other states.
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In 2001, eight states produced more than the requisite
five survey responses. Although the number of respondents
increased only by about 11 percent, from 120 to
133, five states joined the list (Florida, Michigan,
New Jersey, Ohio and Virginia). Two (Alabama and
Oregon) dropped off.
New Jersey reported the single highest average CF,
$80.45. The New Jersey maximum was $105, which was
also the highest CF reported in New York. The wide
range of CFs in New Jersey suggests that proximity
to Manhattan makes a significant difference. Ohio,
Pennsylvania and Virginia generated the lowest sets
of CFs. California continues its tradition of relatively
low payments, with averages in the $44 range. Georgia
shows slightly lower CFs than in 2001, which reflects
the change in adjusting for shorter time units rather
than any actual decrease (see “Methodology”
below).
The rank order of the five geographic regions has
not changed over the last two years. The Northeast
(including Connecticut, Massachusetts, New Jersey,
New York, Pennsylvania, Rhode Island and Vermont)
maintains its standing as the region with the highest
average CFs ($51-$59.33). These areas follow, in
descending order:
| South: (Alabama, Florida, Georgia,
Kentucky, North Carolina, South Carolina,
Tennessee, Texas, Virginia, West Virginia); |
| Midwest: (Colorado, Iowa, Illinois,
Indiana, Kansas, Michigan, Minnesota, Missouri,
Ohio, Oklahoma); |
| Northwest: (Alaska, Oregon, Washington); |
| West: (California, New Mexico,
Nevada). |
Methodology
This year, we made two changes to the survey, one
to its composition and the other to the data analysis.
First, we have eliminated questions regarding capitation
rates. The numbers of responses yielded by the earlier
surveys were too small to be meaningful.
We improved the mathematical model for normalizing
CFs that applied to 10- or 12-minute units as opposed
to the more common 15-minute unit. The math involves
multiplying the CF by a factor that adjusts for
the shorter time unit. A Committee on Economics
member advised that average factors would be about
1.3 for a CF based on a 10-minute unit, and 1.1
for a CF based on a 12-minute unit. The average
factors for any individual anesthesia practice may
vary. Groups negotiating a CF with a payer that
insists on 15-minute units, when the group typically
uses a shorter time unit, should calculate the factors
for each of their 10 (at least) most frequently
performed procedures and use the resulting average
factor. The examples in Figure 1 demonstrate the
computation.