Lott says AMA’s CPT use is anti-consumer

Taking aim at AMA’s financial windfall’

The American Medical Association (AMA) has been forced to defend its proprietary Current Procedural Terminology (CPT) coding system for medical services in recent months after coming under criticism from Senate Minority Leader Trent Lott (R-MS).

Lott accused the AMA of running a monopoly that guarantees it an annual multimillion-dollar "financial windfall" while preventing consumers from comparison-shopping for outpatient medical care.

In what some say is a related event, these accusations came shortly after the Department of Health and Human Services (HHS) ordered Aspen Systems of Germantown, MD, to stop work on its contract to help develop a new set of evaluation and management (E/M) guidelines used to bill Medicare and other insurers. Medicare has been trying to devise an alternative to the current (1995 and 1997) guidelines for six years.

Many coding insiders took this action to mean any new E/M codes, along with new guidelines for billing them, would be developed and incorporated into the CPT system.

As part of the Senate finance committee’s investigation into reforming and modernizing Medicare’s bureaucracy, Lott has asked HHS Secretary Tommy G. Thompson to provide a detailed accounting of Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration) efforts to update inpatient codes and the impact of the AMA’s coding system upon that effort.

Lott and other critics are especially interested in HHS’ attempt to develop, through a contractor, its own coding system for inpatient services, and in the relationship between any HHS system and the AMA’s outpatient coding system.

Investigators are also looking into the terms of the agreement between the federal government and the AMA concerning the use of the AMA’s CPT system.

Lott said in his letter to HHS that it "is my understanding that HCFA [CMS’ predecessor] in 1983 granted the AMA what has been characterized as a statutory monopoly’ by agreeing to exclusively use and promote the AMA’s copyrighted CPT code for the purposes of reimbursing Medicare and Medicaid bills from doctors for outpatient services."

As a result, other entities, including private insurance companies, had to adopt CPT as their primary billing standard, Lott said.

"This predictably led to a financial windfall for the AMA in the form of CPT-related book sales and royalties approaching $71 million a year, according to a report by the Wall Street Journal," Lott commented. The AMA says the figure is really closer to $18 million annually.

Lott also claimed that the existence of the AMA coding system prevents consumers from comparison-shopping for medical services. By suing web sites and others to block them from posting comparisons of doctor and other medical fees on the Internet, the AMA has made such comparisons impossible, he said.

The AMA has responded by saying it lets the federal government use the CPT system without charge and only charges licensing fees when the codes are used for profit-making purposes.

As far as the widespread use of the codes is concerned, private concerns, like insurers, have voluntarily adopted it "because the AMA code set is comprehensive, reflects expert physician input, and most accurately describes the full range of services that physicians provide for a given procedure," says AMA Chairman Timothy Flaherty, MD. CPT is the "gold standard" of medical coding, he maintains.

Not all physicians feel this way, said Kathryn Serkes, spokeswoman for the Tucson, AZ -based Association of American Physicians and Surgeons: "Senator Lott deserves everyone’s support in his effort to pull the rug out from under the AMA’s secret monopoly on these codes. Elimination of this AMA cartel will do more to protect patients than any patient’s bill of rights law."