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The AMA's $70-Million Taxation without Representation: Is it Time for a "CPT Party" Revolt? PDF Print E-mail
Written by John Weeks   
Wednesday, 20 October 2010

The AMA's $70-Million Taxation without Representation: Is it Time for a "CPT Party" Revolt Against the Royalty?

Summary: Integrative nursing leader Mary Jo Kreitzer, RN, PhD called my attention to a peculiar characteristic of US health care. The guild for MDs owns the means by which members of all the other guilds can get reimbursed by 3rd party payers. The means are the Current Procedural Technology (CPT) codes, the royalties from which earned the American Medical Association something in the area of $70-million of revenue in 2009. (The AMA doesn't make it easy to find the amount.) Kreitzer's interest was provoked by the AMA's antagonism to the independent practice of nurses as primary care providers recommended in an October 2010 Future of Nursing report from the Institute of Medicine. The AMA also opposes the non-discrimination portion of the Obama healthcare law (Section 2706) and practices advances. Should practitioners in these fields be required to offer a tithe to a profession that is their source of their own subjugation? Maybe it's time for a CPT party.
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Image
CPT: Portal to payment, owned by the AMA
Integrative nursing leader Mary Jo Kreitzer, RN, PhD senta message last week wondering if I knew the exact number of millions of dollarsthe American Medical Association (AMA) makes each year via ownership of the CurrentProcedural Technology (CPT) codes through which third party payment ismanaged in US health care.

Kreitzer, who founded and directs the Center for Spiritualityand Healing at the University of Minnesota, was provoked to ask by the latestevidence of AMA opposition to independent practice by nurses. On October 5,2010, the Institute of Medicine (IOM) published a long-awaited report entitledThe Future of Nursing: Leading Change, Advancing Health. The multidisciplinaryIOM team presented the vision of a future in which nurses, without supervision,will provide a significant portion of the nation's primary care. Nursingsupporters welcomed the study as opening a "golden age of nursing."

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AMA: Developed the CPT in the first years of Medicare in the mid-1960s
The AMA met the IOM findings with a Jaggeresque chorus of"under my thumb." The AMA's concern was couched as interest in the public safety.

Clearly, the AMA was not about to have its paradigmshifted by recommendations from the agency that is called the "brains of USmedicine." Never mind that the IOM report concluded that there was a lack ofevidence to support the charge of safety concerns in independent practice bynurses.

Instead, the AMA-as-guild responded with the same lower chakrabehavior enshrined in the organization's infamous 2006-present Scope ofPractice Partnership (SOPP) campaign.  Viathe SOPP, the AMA supports and organizes opposition to scope expansions of allother professions, including chiropractic doctors, midwives, psychologists,naturopathic physicians, optometrists, acupuncture and Oriental medicinepractitioners as well as advance practice nurses. The AMA also opposes the anti-discrimination portion (Section 2706) of the Obama reform law.

Image
Kreitzer: AMA opposition to nurses led her to call the question
This gets us back to Kreitzer's question, and thequestion within it: Why are all practitionersroutinely paying the AMA if the AMA can turn around and use these funds toattack these profession and any ideas the AMA doesn't support?


Establishing the exact size of the AMA bonanza from CPT royaltiesis challenging. Web searching finds a July of 2001 letter from then US SenateMinority Leader Trent Lott (R-Miss) to then US Secretary of Health and HumanServices Tommy Thompson.  Amidst a seriesof probing questions about the AMA and the CPT, Lott cites the Wall Street Journal in placing at$71-million the AMA's "financial windfall in the form of CPT-related book salesand royalties." A Republican activist blogging in July 2009 on her view thatAMA's ownership of the CPT is part of why "the AMA sold out doctors andpatients for Obamacare" puts the figure at $118-million. She offers no sourcingof this amount and she did not respond to a query.

I contacted the AMA.A communications staffer shared that "the 2009 AMAAnnual Report does not breakout CPT revenue from the total revenuegenerated by the complete line of AMA books and products." According to the report, the CPT "and more than100 other books and products" generated $70.9 million in revenue in 2009.

Image
AMA doesn't make it easy to see how many tens of millions the CPT generates
Thisseems low, if the Wall Street Journal and Senator Lott were correct in using roughly the same figure 9 years ago.

Notably,the $71-million does not include $47.5-million in 2009 revenues from "DatabaseProducts." Might this separate category include the AMA's downloadable CPT products? I havenot heard back from the AMA. [I heard from the AMA's media relations the day after this was published. The response was as follows:

"No other categories include CPT related revenues. All CPT revenues are included with revenues generated by the complete line of AMA books and products ... The AMA Annual Report is the only source of publicly available information on the AMA's finances."
These direct financial benefits do not include indirect values of theAMA's CPT ownership. For instance, AMA members are offered steep discounts on CPT product purchases,effectively lowering the price of membership.

Moreimportantly, CPT ownership means that the AMA controls the ability of any otherprofessions, whether nurses or chiropractic physicians or naturopathic doctors or optometrists,to create any new codes to better reflect their practices for the purposes ofpayment. And via CPT ownership, the AMA ismarried to the Centers for Medicare and Medicaid Services on scores of payment-relatedissues.  

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Another of the AMA's CPT products
Never mind the clout for a moment. Thisis a good deal of money to the AMA. The $71-million figure is 26% of the AMA'stotal revenues of $269-million in 2009. These revenues amount to 157% of the$45-million portion of its income from membership dues paid by the 17% ofmedical doctors who choose to join. (The other significant income categories were$56-million for advertising and $35-million for insurance products.) Foradditional perspective, direct federal lobbying costs by the AMA in 2009 amountedto just over $20-million. This figure doesn't include any Scope of Practicepartnership activities in individual states or the myriad of "educational"activities that the AMA engages to influence policy but that are reflecteddirectly as direct lobbying costs.

To recap: 

  • All guilds must use the CPT if they want to participate in 3rd party payment.
  • To do so, they must pay one guild, the AMA.
  • This guild is pitted against their efforts to expand their practice scopes. 
  • In addition, this guild is apparently opposed to multidisciplinary recommendations from the brains of US medicine about the future of healthcare in the United States.
  • As is clear in the IOM report, many medical doctors are not aligned with the AMA position. In fact, the AMA that received these $71-million+ each year presently counts only 15%-20% of MDs as dues-paying members.

I sent an email to Kreitzer once I began to get a senseof the dimensions of the CPT's value to the AMA, asking for a comment on why shefelt this important. Kreitzer wrote:
“It is hard to imagine real health care reform without having reform of the system that has been used to drive payment and reimbursement. The system we have has been controlled by the medical profession. It has incentivized medical professionals to offer tests, procedures and services that match codes and maximize reimbursement.

"Historically, it has been very difficult for advanced practice nurses and integrative care practitioners to secure access to the codes which then limits the public access to a broader array of providers and services. I think that there needs to be transparency on how much income the AMA generates annually from [the CPT] that essentially drives medical practice and constrains the practice of other professionals. And clearly, it is time for payment reform. Without payment reform, there will be no true health reform.”
Transparency is good, but doesn't go far enough. The necessary transformation of US healthcareis toward diversity, multidisciplinary practice, collaboration, team-care, andrespect for the skills of all parties. The movement is away from the still current patriarchal,top-down, MD-centric, father-knows-best world of Dr. Kildare. The movement is definitely away from any belief set allowing practitioners of all stripes to tithe to a small minority of rear-guardAMA fighters who have taken it upon themselves to stand inthe way of reform. 
   
"Clearly, it is time for payment
reform. Without payment reform,
there will be no true health reform.”

   
There is no more powerful emblem of the guild-uber-alles healthcare world that causes such problems in optimal care than the AMA's CPTownership. Part of the "payment reform" for which Kreitzer calls must be wresting this control from a single guild. The present system, akin totaxation without representation, may have made sense before organized medicinewas challenged by the rise of nursing, of other (increasingly non-) allied healthcare professions and integrative practice disciplines.

It's time for a CPT party revolt to claim these tools as rightfully part of a jointly-held commons.

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Last Updated ( Monday, 21 March 2011 )
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