August 2005 Volume 69	Number 8

Fees Paid for Anesthesia Services: 2005 Survey Results

Karin Bierstein, J.D., M.P.H.
Assistant Director of Governmental Affairs (Regulatory)

This article is available in PDF format.

Table 1: National Conversion Factors, 2005

With double the number of responses compared to our 2003 survey, which was published in the August 2003 NEWSLETTER, it is possible to report statistics for a greater number of individual states. Whether we may legally publish the results for a given state or other geographic unit depends on whether we have at least five data points from that state, with no single anesthesia practice’s data representing more than 25 percent on a weighted basis. The information also must be at least three months old, according to the applicable antitrust enforcement “safety zone” established jointly by the Department of Justice and the Federal Trade Commission in 1996.

This year, accordingly, we are reporting results for 22 states in Table 2, up from 11 in 2003. The newcomers to the list are Alabama, Colorado, Connecticut, Iowa, Illinois, Indiana, Maryland, Massachusetts, North Carolina, Tennessee and Washington. For some states, one or more of the three columns of lowest, median and highest payers may be blank because the threshold of five responses was not met for that level.

Because of rather small sample sizes, rankings among the states would not necessarily be valid (for example, the South Carolina high-payer mean of $77.46 would probably not be $15 greater than the high-payer mean for New York with more data points), but if the statistics in a single state cluster close to the mean, they tend to validate that mean. The lowest mean CFs may indicate a dominant payer with a market share large enough to impose a great discount on the anesthesia groups in that state, e.g., Alabama. Anesthesiologists in states not listed in Table 2 may find helpful the data published for the five regions in Table 3, in which data from states with fewer than five data points have been combined by geographical region.

Methodology
A significant change in methodology precludes a simple comparison to the average CFs published in 2003 and earlier. This year we asked for the spectrum of anesthesia practices’ commercial CFs. Previous surveys had obtained respondents’ three highest-volume CFs. There was concern that data limited to high-volume payers would be inappropriately skewed toward discounted CFs, since payers with large market shares can negotiate lower fees. The fact that the national average CF from the 2005 “spectrum” survey is barely 2 percent higher than the 2003 high-volume CF survey suggests that the hypothesis might be wrong. Instead it tends to validate the survey results from the earlier studies.

The overall results of the new survey are quite credible, we believe. They are based on responses from 267 anesthesia practices in 43 states. Requesting three targeted CFs from each respondent yielded a total of 741 contracted CFs, representing nearly 60 percent of the respondents’ managed care business — the lowest, median and highest CFs accounting for 20, 21 and 17 percent, respectively.

The survey instrument directed respondents to eliminate outlier contracts representing less than 5 percent of their total private payer business. Some of the responses in past studies involved guesses; anesthesiologists are more likely to trust their memories when it comes to their biggest managed care contracts. In distributing the 2005 questionnaires, we stressed that respondents would need to obtain the high, median and low CFs from their financial information systems. All reported CFs were included in the analysis except for those that were obviously Medicare or Medicaid (or other government agency) CFs (i.e., lower than $21).

The questionnaires were distributed to the members of ASA committees concerned with practice management and economic issues, to all members of the Medical Group Management Association (MGMA) Anesthesia Administration Assembly (AAA) subscribed to the AAA listserve and to the anesthesiologists and administrators attending the ASA Practice Management Conference held in San Francisco last February. Visitors to ASA’s Web site were invited to download and complete a copy of the instrument.

Fifty-five of the CFs reported were for 10- or 12-minute time units. Where no minutes were specified, we applied the far more common 15-minute value. Interestingly 10-minute units outweigh 12-minute units by a factor of three (41 versus 14).

The shorter time units were normalized to a 15-minute unit through adjustment factors calculated using median base units and median case units from the 2004 MGMA Cost Survey for Anesthesia Practices (which is available for purchase at the ASA member discount at <www.ASAhq.org>). According to the MGMA survey, which reported 2003 data, the median number of base units was six, and the median total minutes per case was 94.

Using these MGMA statistics, we calculated adjustment factors of 1.26 for 10-minute unit contracts and of 1.13 for 12-minute unit contracts, as shown in Figure 1. Thus, for example, a CF of $50 for a 10-minute unit was adjusted by a multiplier of 1.26, yielding a normalized CF of $63.

Figure 1: Converting to a 15-Minute Time Unit

Conclusion
We are pleased to have doubled the number of responses to 267 in 2005 and even more pleased that we can now report statistics for almost half the states. Some caution is advisable in using data from small samples, of course, especially where the number of anesthesia groups that provided information is a small proportion of the total number of such groups in the United States. Still, these data are consistent with the CFs reported in ASA anesthesia fee surveys going back to 1997, if somewhat lower than a trend line would have indicated.

The two-fold jump in the number of responses suggests that ASA members and their administrators are increasingly aware that the quantity of data points influences the plausibility of the summary statistics. Please plan to contribute to at least a four-fold leap in 2007.

A special thanks for their help to Sharon Merrick, CCS-P, ASA Coding and Reimbursement Analyst, and Richard Heard, our medical student summer intern from the University of Mississippi Medical Center.

Table 2: State Conversion Factors, 2005

For some states, one or more of the three columns of lowest, median and highest payers may be blank because the threshold of five responses was not met for that level.

Table 3: Regional Conversion Factors, 2005