Amid public controversies over product endorsements and the firing of its journal editor, the American Medical Association is fighting a quieter battle that directly affects the nation's healthcare providers.
The AMA's monopoly on billing codes for physician services, a vital source of power and revenues for the lobby group for 17 years, is being threatened.
The AMA's Current Procedural Terminology is ubiquitous in physician offices. Revised annually, it identifies some 7,500 medical procedures and provides a five-digit code and brief description for each.
Since 1984, when HCFA began requiring its use for Medicare, CPT has been universally adopted by federal, state and private payers. In essence, doctors can't bill without it.
Unlike the coding system for inpatient services, which is copyrighted by the government and is, therefore, free to anyone, CPT is owned by the AMA.
Anyone who buys CPT manuals or publishes books, software or reports containing the coding must pay the AMA, which says it collects $15 million annually in royalties, licenses and publication fees from CPT, amounting to about one-tenth of its non-dues operating revenues.
Unlike inpatient codes, which are set by HCFA, CPT is controlled by the AMA. It decides which procedures to include.
Pressure is mounting, though, to replace CPT with a system that is in the public domain. Part of that pressure emanates from the Health Insurance Portability and Accountability Act, which promotes the adoption of a single coding system for all sites of care.
Such a system would likely be government-controlled, but the AMA is not about to relinquish its authority over physician services coding without a fight.
Eliminating CPT would likely require an act of Congress. "We're not going to give CPT away," said Ted Lewers, M.D., vice chairman of the AMA board. As far as turning over CPT to public hands, Lewers said, "we'd have to see what that process entailed, and that's pure speculation."
So far, AMA officials have taken the position that a single coding system is probably not feasible.
But some coding experts say otherwise. Hospitals would benefit by eliminating redundancy and discrepancies from maintaining two coding systems, one for inpatient and one for outpatient, said Sue Prophet, director of classification and coding for the American Health Information Management Association, which represents coders. It has advocated a single system since 1993.
Despite its skepticism about a single coding system, the AMA last July began work on an improved version of CPT that would cover inpatient billing. Pilot testing is expected in 2001.
"We think CPT should be that (single coding) system for the future," said Douglas Henley, M.D., a family physician in Fayetteville, N.C., and chairman of the AMA's advisory committee for the project.
But a formidable competitor is looming. Completed last month, the new system, called International Classification of Diseases, Tenth Revision, Procedural Coding System, is intended to replace procedure codes for the current, outdated inpatient billing system, International Classification of Diseases, Ninth Revision, Clinical Modification. But it could easily be adopted for physician billing, said Richard Averill, research director for the health information systems division of St. Paul, Minn.-based 3M, which developed the system under contract with HCFA. 3M was paid a lump sum of $529,785 for the three-year project.
Slated for implementation in 2001, the new system represents a major advance over both CPT and the old inpatient system, including definitions for procedural terms and a structure that helps users interpret codes, Averill said.
But Henley said adopting ICD-10-PCS would be "disruptive to the care of patients" because physicians would have to learn new nomenclature and buy new software. "Y2K would be a piece of cake compared to that upheaval," he said.
Over the years, the AMA has acted to protect and expand its coding monopoly. Starting in 1983, it gave HCFA the right to use the coding for Medicare in exchange for HCFA's agreement to promote the use of CPT exclusively for federal programs.
That agreement was challenged in 1994, when a healthcare business book publisher, Los Angeles-based Practice Management Information Corp., sued the AMA, claiming the association's CPT copyright was invalid.
In 1997, the U.S. Court of Appeals for the 9th Circuit in San Francisco affirmed the copyright but ruled that the AMA misused it by licensing the CPT to HCFA in exchange for HCFA's agreement not to use a competing coding system. The court said that gave the AMA a "substantial and unfair advantage" over competitors.
The association's contract with HCFA has since been changed, but that hasn't satisfied all coding users.
A medical software publisher, Richmond, Calif.-based QuadraMed, was sued by the AMA last fall in U.S. District Court in Chicago for copyright infringement, after the company admittedly refused to pay royalties.
In its defense, QuadraMed said it shouldn't have to pay the AMA's "illegally high prices." Five of its business units have filed an antitrust suit against the AMA in U.S. District Court in San Jose, Calif., claiming the AMA's 14-year exclusivity agreement eliminated any possible competition. The business units are seeking at least $500,000 they paid to the AMA while agreement was in effect.
"It may have been such an egregious misuse and continued for so long unabated that (the AMA) may not be able to redress it," said QuadraMed's attorney, Lea Leadbeater of Zevnik, Horton, Guibord, McGovern, Palmer & Fognani in Chicago.