Physician Billing - Consumers in the Dark  by Tim Pickering Updated 9/10/2002

Imagine a restaurant patron sitting down for lunch.  The waitress approaches and requires the diner to secretly pay a $10.00 fee to look at the menu before ordering!  This reflects the American Medical Association (AMA) policy, that charges patients to view the treatment codes and descriptions employed by all the physicians in the U.S.A., using the MyHealthScore.com (formerly MECQA) web site.  Under these conditions, most of us would take our business elsewhere, if there was another choice.

Conflict:

Not willing to comply with the AMA's questionable business practices or sign their contract, MyHealthScore.com (a division of INTELLIMED International Corp.) received a notice from the AMA to "Cease and Desist", threatening court action, for displaying CPT codes and descriptions for consumers on its web site.  Regrettably, the CPT information was removed from viewing on MyHealthScore.com October 29, 1999 due the extensive financial costs associated with taking this issue through the courts.

On-line Again! - March 8, 2002:   Upon receipt of of a patient e-mail yesterday from Don Iles, Subject: "High Fixed Cost of Trying to Stay Healthy" it was decided to restore CPT definitions on MyHealthScore.com after two and a half years of absence. In light of the AMA's decision to make limited access to CPT on their site last month, it is hoped that they will not object to this public service.

Awareness:

Follow the Money: Although it appeared that Senator Trent Lott took a firm stand by championing the move to eliminate the AMA's monopoly on CPT's, he has apparently walked away from the issue.   Since his initial letter of July 27, 2001, referenced below, there has been no follow up to this issue.   This is somewhat disheartening as every day that patients are deterred from accessing medical information, it also weakens an already dysfunctional healthcare industry.   Perhaps, it's naive not to draw the correlation between the AMA's reported $71 million income from the August 2000 Wall Street Journal article to the $4,496,150 in distributions by the AMA Political Action Committee. See the TOP 50 PAC'S - DISBURSEMENTS referenced in the Federal Election Commission web site.

In the State of Arizona, 75% of our U.S. Legislators were recipients of AMA PAC distributions. Compared to 96% of the web survey respondents who want CPT's in the public domain, it seems to reflect an unfortunate political reality.

Bargaining Chip: Jill Watson's undated article: "AMA and Republicans Have Fences to Mend" discusses Senator Trent Lott's decision to contest the AMA's monopoly on CPT's as a means to counter "... the AMA's financial support for Democratic campaigns" as reported in the Wall Street Journal.

AMA Offers Scant CPT Access on the Web - February 6, 2002: It is evident that the pressure to put medical terminology in the public domain is moving the issue in the right direction, however the AMA failed to disclose important shortcomings of their internet offer.

Each on-line visitor is required to register with the AMA and make personal disclosures that a user may consider objectional. For example, after signing up, say I search on the word "headache". Well, now the AMA has the ability to market related (and perhaps unwanted) services to me concerning my query. Click here and follow the CPT Products and Services link to try it out.

Then, there is a limit of 10 queries per day, that display up to 5 CPT codes per query. Keyword(s) searches are almost useless. For instance, when searching on the word "blood" there are about 125 CPT's that qualify. A typical consumer isn't going to know the technical jargon enabling them to narrow the search to find the one they need. They need to see all the appropriate CPT's related to the query. Other keywords will work better or worse. The 50 CPT's viewable per day represent less that 1% of all the CPT's. How does this scant information empower patients to manage their own healthcare?

A query by CPT code works well for patients who want to look up descriptions and prices on their bill after they have been treated. However patients searching for a procedure prior to treatment would probably use a text search.

On April 16, 1997 T. Reginald Harris, MD Chairman of the AMA's CPT Editorial Board stated to the Department of Health and Human Services that: "The AMA has taken additional steps to make CPT available over the Internet and is expected to complete an agreement with the HCFA in the very near future. Under the agreement, complete public access to HCFA data files containing CPT will be available, free of charge, both domestically and internationally." Nearly five years later, the AMA is inching forward on this pledge.

Public utilities are given monopolies because it is in the public interest not to have duplicate water reservoirs, pipelines, utility poles etc... However utility companies are accountable to public commissions whereas neither the principles nor the accountability of utilities apply to the AMA's monopoly on CPT's. As CPT revenue is ultimately derived from patients, the stewardship of the AMA and those who sponsored this monopoly is highly questionable. Particularly in matters of healthcare, our government, physicians and their association(s) should strive to be blameless in the conduct of their profession.

The Washington Times - August 7, 2001 Lott takes on 'monopoly' of outpatient codes  by Dave Boyer reveals Senator Trent Lott's letter to the Department of Health and Human Services, investigating the American Medical Association's "federally approved "monopoly" of the codes that doctors use to define Medicare and Medicaid outpatient services."

Senator Trent Lott - July 27, 2001 Congressional intervention initiated by Senator Lott's letter to Tommy Thompson, Secretary of the Department of Health and Human Services gives testimony to Senator Lott's position on this issue and reinforces the characterization of the AMA's copyright on CPT's as a "statutory monopoly". He makes a good point when questioning the reported $71 million windfall the AMA derives from CPT income.

The Record - October 26, 2000 Has the AMA lost sight of its mission? by Michael Arnold Glueck and Robert J. Cihak describe historical behaviors of the AMA considered contrary to the welfare of patients and physicians alike, and recommends "placing the AMA's CPT code in the public domain".

ZDNet Interactive Week - October 16, 2000 Running afoul of the AMA by Lewis Koch advocates for consumers and suggests a rogue solution to the AMA CPT monopoly.  He writes "Kiss copyright goodbye" by employing a sophisticated internet anti-censorship tool "Publius".

Modern Physician Magazine -  October 1, 2000 Fighting Back by  Angela Gonzales reflects the "grassroots war against the AMA" concerning its monopoly on CPT information by reporting the increased web traffic and supportive e-mails sent to MyHealthScore by consumers.

The Wall Street Journal - August 25, 2000: The AMA CPT issue was featured in a front page article by Ann Carrns "Code Blues, AMA Fights for Control Over Doctor-Price Data Web Sites Are Providing ". Traffic to MyHealthScore.com trippled for the month of August 2000, hundreds of encouraging e-mail messages were received, and both consumers, and professionals in the health care industry were surprised to learn of the copyright restrictions the AMA holds on CPT information.  To the credit of the WSJ, this article was written at a time when it was joined with the AMA and others on new database legislation.  On September 7, 2000 the AMA responded in their WSJ editorial Internet Pirates Profit on Health-Care Data.

Modern Physician Magazine -  May 1, 2000 All Charged Up by  Angela Gonzales reflects initial dialog among healthcare professionals in which a variety of opinions were expressed concerning the AMA's copyright on CPT information.

AMA Fee:  MyHealthScore.com considers the annual $10.00 CPT per user license fee unreasonable and contrary to the public interest for several reasons listed below.

AMA Secrecy:  Included in the licensing agreement sent to our firm by the AMA was the following paragraph:  "You agree not to disclose the amount of any AMA royalty in your licensing, marketing, promotional, billing or other materials."  It is speculated that this feature was added to conceal this source of revenue for the AMA due to the perceived inappropriate nature of the charge.

The Sherman Anti-Trust Act of 1890:   A University of Houston web site holds some interesting historical background on monopolies:

"Prior to the 19th century, governments typically granted monopoly rights over some portion of the economy in return for a cash payment."

This same type of indirect taxation is provided by HCFA's statutory monopoly with the AMA. The AMA gets a monopoly on CPT's, makes huge profits in an uncompetitive market, gives HCFA free access to CPT's, and offers substantial PAC donations to legislators. Only the judicial branch of government was left out of this deal. This web site cites "public discontent" as the motivating catalyst for bringing about the Sherman Anti-Trust Act of 1890. So what level of public outcry is necessary to revoke this ill-conceived three way relationship?

Dual Revenue Stream:  Consider the patient who pays the AMA CPT fee and searches for information to better understand and plan for their treatment costs.  After being treated, this patient will be provided a bill containing the same CPT code and description that the physician has already paid the AMA a fee for using.

Patient Hardship:  Approximately 44 million people are without insurance in the USA.  These individuals may not be able to get insurance due to a pre-existing condition, or insurance may be simply unaffordable.  If  these patients consider the medical costs as a barrier to treatment, the AMA's additional $10.00 fee may be deemed unaffordable and further hinder their ability to plan for and receive medical treatment.

A sample message received by MyHealthScore.com via e-mail:
"I need to get an information on pricing for a particular urological procedure, frenuloplasty. I live in California. I'll appreciate if you can tell me where I can get the necessary information.  Thank you."

Perception of Physicians: Dr. Anon added the following opinion to MyHealthscore.com on 6/29/01.

"This whole discussion disturbs me greatly. I have been reading the posts and there seems to be a mass confusion where all the doctors are viewed as minions of the AMA who are only out to make a buck off poor uninformed patients. ..."

While it may not be fair to hold all physicians in low esteem for the business practices of the AMA, the AMA does purport to represent the physicians in this country, the AMA is controlled by physicians, and any physician who charges an uninsured patient using CPT codes benefits from a negotiating advantage that restricts access to medical terminology and comparisons by procedure.

Bending the Rules: During a phone conversation with a congressional staff member in late May, 2001, she said that she was called by constituent who asked her to find the CPT definitions of two oral surgical codes. She called the AMA who wanted to charge her $50 for this information. Considering these fees unacceptable, she called a friend at Blue Cross and Blue Shield who gave her the definitions. This scenario exemplifies the daily conflict created by this monopoly as patients seek to manage their own health care.

History:  CPT (Current Procedural Terminology) is a the standard list of codes and descriptions by which patients are treated and billed by their physicians.  The AMA controls CPT as "intellectual property" which can be considered a unique type of health care monopoly.

Intellectual Property: In reality, the AMA performs more of a clerical function than performing creative works that justify a copyright. New procedures are created by others and submitted to the AMA who gives them a code and adds the description (initiated by the developer) to their listing. Likewise when someone moves to a new residence, they provide the phone company their name and address, afterwhich a phone number is assigned to them. Since the process that creates the white pages is not copyrightable, the AMA's CPT codes may not be either.

Theoretically....   What if H&R Block decided to give the US Government a master Chart of Accounts on the same basis as the AMA gave the CPT's.  Afterwhich, all businesses and taxpayers had to pay H&R Block at least a $10 fee annually to use this proprietary accounting convention.  Perhaps the Post Office deserves special fees for it's proprietary zone improvement plan (Zip codes).

Social Implications:  Free access to medical care, or socialized medicine, in the USA is considered economically unaffordable at this time.   However, free access to the basic terminology of medical economics should be readily attainable and promoted to initiate a more open and competitive health care industry.  The AMA represents the sole industry that has been successful at controlling the standard economic terminology of its profession, and in no other industry would similar restrictions present such life limiting implications.

Economics:  Unfortunately, the real issue is money.  The AMA controls the processing of CPT information from which it receives a substantial revenue stream from all healthcare entities involved with patient billing.  This income stream of the AMA's is sustained by a successful and formidable organization of physicians, business staff, lobbyists, and attorneys.  Although the AMA has demonstrated their intention to preserve this cash flow, it is important to demonstrate that the altruistic value derived by informed patients greatly exceeds the financial value the AMA receives from it.

Financial Negotiations:  Every day, patients are taken to the doctor’s office or emergency room for the immediate treatment of a disease or injury.  Prior to treatment, the patient or their representative agrees to pay the “Usual & Customary” fees.   Without health plan representation, this can be thought of as writing a “blank check”.  When these medical bills create more trauma than the treatment, knowing how to resolve them can take the wisdom of Solomon.  Click here to learn how one family successfully dealt with this situation.

Public Healthcare Economic Theorem:
Premise1:    Something cannot be improved unless it can be measured.
Premise2:    CPT’s represent the standard economic measurement system for physician services.
Conclusion:  Economic improvement of physician services for consumers requires public access to CPT's.

Noteworthy Quotes:

David J. Bodney, First Amendment Attorney for Steptoe & Johnson LLP, April 20, 2000

"The AMA's refusal to make such basic information freely available represents a serious erosion of the public's right to know about the cost of health care in our country today."

U.S. 9th Circuit Court of Appeals, Opinion by Judge Browning, Filed August 6, 1997 (Click here for the complete ruling)

"On the undisputed facts in the record before us, we conclude the AMA misused its copyright by licensing the CPT to HCFA in exchange for HCFA's agreement not to use a competing coding system."  The AMA has since reported that it has modified it's HCFA agreement to end the misuse.

Opinions: The Association of American Physicians and Surgeons also deems the AMA's use of CPT's inappropriate in their web page AMA CPT MONOPOLY BILL IS BACK" dated October 28, 1999.

This opinion has been echoed by Eagle Forum, a nationwide organization with some 80,000 members, which both compiles databases and uses database information compiled by others.  Please note their position found in their web page Re: H.R. 1858 CONSUMER AND INVESTOR ACCESS TO INFORMATION ACT OF 1999 dated June 15, 1999.

Legacy of Criticism:  Author Michael Crichton wrote the article "The High Cost of Cure" in which he states:

"FOR the past forty years, the American Medical Association has worked to the detriment of the patient in nearly every way imaginable; it is a peculiarity of this organization that it has also worked to the detriment of physicians as
well."

"One can only conclude that the American Medical Association has not considered the interests of patients. On the basis of its record, it is opposed to both better and cheaper medical care. Its only commitment is to the doctor's bank account, and even then, it makes astonishing errors in judgment."

Commercial Value:  Consumers viewing CPT information shouldn't reduce AMA revenues.  CPT related information is normally marketed and sold to professionals in the medical profession.  The MyHealthScore.com site has limited commercial value to existing AMA customers because the procedures correspond only to national reimbursement values.  Physicians, health care facilities and other professionals need to modify certain components of their billing information, such as geographic modifiers, to accurately bill for their services.

AMA Public Access Policy:   T. Reginald Harris, MD Chairman of the AMA's CPT Editorial Board shared what seems an altruistic policy when making the following statement on April 16, 1997 to the Department of Health and Human Services shown below:

"The AMA has taken additional steps to make CPT available over the Internet and is expected to complete an agreement with the HCFA in the very near future. Under the agreement, complete public access to HCFA data files containing CPT will be available, free of charge, both domestically and internationally."

The MyHealthScore.com site wishes to comply with this statement by providing CPT access that is both "complete" and "free of charge".  The AMA does not.   Presently, the CPT descriptions located on the HCFA site are truncated (not complete), and now the AMA wants to charge $10.00 per user annually.  One might consider Dr. Harris' statement suspiciously Machiavellian.

Take a look at the first three surgical procedures: 10040 - Acne surgery of skin abscess, 10060 - Drainage of skin abscess, 10061 - Drainage of skin abscess. Although the second procedure appears identical to the third procedure, the cost is about twice as high because the HCFA file omits the words "simple or single" for the second procedure and "complicated or multiple" for the third procedure. This type of mis-information is rampant throughout this file. If a physician were to bill HCFA for their Medicare patients based upon HCFA's truncated definitions, using the higher reimbursement code, the physician would sent to jail for defrauding the government. Pretty scary, huh?

Restraint of Trade:  Consider physician groups who wish to list their services on the internet using CPT.   Would not the AMA fees unreasonably restrict access to their services?  Is there any other industry, profession, or type of vendor that faces this type of obstacle?

The 'Secret Marriage' of the AMA and HCFA! - Click here to visit the web site containing the exclusive agreement between the AMA and HCFA to use CPT's for the Medicare and Medicaid programs as well as promoting CPT's to the insurance industry.

Inherently Governmental Functions: Public Law 93-400, "The Office of Federal Procurement Policy Act", as amended, created the Office of Federal Procurement Policy (OFPP) in 1974 and placed it in the Office of Management and Budget (OMB). The OFPP was created, among other purposes, to provide Government-wide procurement policies "...which shall be followed by Executive agencies..." in the procurement activities. CMS granted a statutory monopoly to the AMA in direct contravention to this law.

September 23, 1992, POLICY LETTER 92-1
TO THE HEADS OF EXECUTIVE AGENCIES AND DEPARTMENTS
SUBJECT: Inherently Governmental Functions

5. Definition. As a matter of policy, an "inherently governmental function" is a function that is so intimately related to the public interest as to mandate performance by Government employees. These functions include those activities that require either the exercise of discretion in applying Government authority or the making of value judgments in making decisions for the Government. Governmental functions normally fall into two categories: (1) the act of governing, i.e., the discretionary exercise of Government authority, and (2) monetary transactions and entitlements.

An inherently governmental function involves, among other things, the interpretation and execution of laws of the United States as to: ...

5.(c) significantly affect the life, liberty, or property of private persons;"

Clearly the control of medical terminology, significantly affecting the public through private, Medicare and Medicaid transactions and entitlements, is an Inherently Governmental Function.

HCFA Taxation Authority - By providing a monopoly on CPT while not paying for the work of creating or updating them, HCFA shifts these costs to all organizations and consumers required to purchase this information at whatever fee the AMA charges. The CPT purchasing process has created a financial burden or tax on the public that is normally considered a responsibility of the U.S. Congress. Does Congress approve of this form of indirect taxation?

Testimonial:  Nearly a year ago, a patient learned that he had a cataract in his right eye.  This was significant as he is a cinematographer and relies on his sight in that eye for his livelihood.  About four years ago, he had a cataract removed from his left eye at a price of approximately $4,000 and anticipated that with inflation the same surgery would have cost about $6,000.  Originally he planned to wait have the surgery when he could afford it.  However, when looking up the benchmark price on MyHealthScore.com, he found that it could cost significantly less, so he contacted a local physician, and had the surgery for a price of nearly $2,000.  Fortunately, his physician also accepted Medicare assignment which reduced the cost even further.

Patient Representation:  It is well known in the medical community that the "Usual and Customary" or retail rates most physicians charge are significantly above the discounted rates charged to large payors.   If patients do not feel they can adequately represent themselves with relevant pricing information, they may be compelled to employ intermediaries (managed care organizations) which may interfere with the physician and patient relationship.

AMA Core Purpose:   "To promote the science and art of medicine and the betterment of public health."

Consequences:  If the AMA's control of CPT continues and nothing is done to allow public access to CPT information, consider two possible consequences.  On one hand, the public could remain uninformed and less prepared to manage their own health care, or all consumers could buy the CPT information and create an enviable windfall for the AMA.  In round numbers .... (25,000,000 users x $10 each = $250,000,000 annually).

The New Health Care Consumer:  The Institute of the Future discusses how "New consumers-people who have the analytical sophistication that comes with information technologies to use them for comparison shopping-have transformed many industries in the U.S., including banking, investment, and retail. They have grown from 25 percent of the population twenty years ago to 45 percent today. By 2005, they will constitute 52 percent of the population. This report describes the extent to which the new consumer will have an impact on the purchase and delivery of health care services in the next three to seven years."

Among the "Barriers to and Drivers of Consumer-Focused Health Care" are listed "The difficulty of measuring and comparing the quality and price of health services."   Providing free access to outpatient pricing information clearly coincides with the movement towards consumer empowerment and reflects the future direction of healthcare.

Thinking "outside the box":   Is it reasonable and prudent to extend Federal Copyright law to include the basic economic vocabulary of modern medicine?   Why has the Federal Government endorsed and created exclusivity to the AMA's privately owned set of medical terminology through Medicare and Medicaid?  To what extent is the quality of healthcare enhanced or diminished by keeping medical terminology out of the public domain?  If the laws are wrong, fix the laws.

The Goal:  Exclude service and product fee descriptions from copyright protection. Apparently, only the healthcare industry profits from its terminology.

Now You Know -  What can be done?
1.    React, take action, formulate opinions, discuss and communicate solutions with those who can effect change.  Don't stop until a reasonable solution is implemented.
2.    Advocate new laws providing public access to CPT information. Click here to find your congressmen and send them an e-mail to work on a resolution.
3.    Seek Federal control and funding of CPT's  to allow the same public access as inpatient DRG's.
4.    Use ICD-9 procedure codes as the physician billing standard.
5.    Deep pockets - Finance a judicial solution to allow access to CPT information.  Please feel free to contact us for research material or to suggest other solutions.