CPT: Portal to payment, owned by the AMA

Integrative nursing leader Mary Jo Kreitzer, RN, PhD sent a message last week wondering if I knew the exact number of millions of dollars the American Medical Association (AMA) makes each year via ownership of the Current Procedural Technology (CPT) codes through which third party payment is managed in US health care.

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

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 paradigm shifted by recommendations from the agency that is called the "brains of US medicine." Never mind that the IOM report concluded that there was a lack of evidence to support the charge of safety concerns in independent practice by nurses.

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

Kreitzer: AMA opposition to nurses led her to call the question

This gets us back to Kreitzer's question, and the question within it: Why are all practitioners routinely paying the AMA if the AMA can turn around and use these funds to attack these profession and any ideas the AMA doesn't support?

Establishing the exact size of the AMA bonanza from CPT royalties is challenging. Web searching finds a July of 2001 letter from then US Senate Minority Leader Trent Lott (R-Miss) to then US Secretary of Health and Human Services Tommy Thompson.  Amidst a series of 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 sales and royalties." A Republican activist blogging in July 2009 on her view that AMA's ownership of the CPT is part of why "the AMA sold out doctors and patients for Obamacare" puts the figure at $118-million. She offers no sourcing of this amount and she did not respond to a query.

I contacted the AMA. A communications staffer shared that "the 2009 AMA Annual Report does not breakout CPT revenue from the total revenue generated by the complete line of AMA books and products." According to the report, the CPT "and more than 100 other books and products" generated $70.9 million in revenue in 2009.

AMA doesn't make it easy to see how many tens of millions the CPT generates

This seems 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 "Database Products." Might this separate category include the AMA's downloadable CPT products? I have not 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 the AMA's CPT ownership. For instance, AMA members are offered steep discounts on CPT product purchases, effectively lowering the price of membership.

More importantly, CPT ownership means that the AMA controls the ability of any other professions, whether nurses or chiropractic physicians or naturopathic doctors or optometrists, to create any new codes to better reflect their practices for the purposes of payment. And via CPT ownership, the AMA is married to the Centers for Medicare and Medicaid Services on scores of payment-related issues.  

Another of the AMA's CPT products

Never mind the clout for a moment. This is a good deal of money to the AMA. The $71-million figure is 26% of the AMA's total 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% of medical doctors who choose to join. (The other significant income categories were $56-million for advertising and $35-million for insurance products.) For additional perspective, direct federal lobbying costs by the AMA in 2009 amounted to just over $20-million. This figure doesn't include any Scope of Practice partnership activities in individual states or the myriad of "educational" activities that the AMA engages to influence policy but that are reflected directly as direct lobbying costs.

To recap: 

• All guilds must use the CPT if they want to participate in 3^rd 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.

“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.”