The Trump administration is now scrutinizing the American Medical Association over the “influence” its medical billing codes have on healthcare nationwide.
Current Procedural Terminology (CPT) codes are meant to “provide a uniform nomenclature for coding medical procedures and services,” according to the AMA. However, some Republicans have raised concerns about whether the AMA currently holds too much sway over the medical care coding system, which could potentially stifle competition and drive up health costs.
The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule on July 16 that includes a request for public comment “on a number of areas regarding the influence of the CPT coding system and AMA process on physician payment policy as part of the Secretarial priority to Make America Healthy Again.”
“What, if any, evidence is there for CMS to consider regarding the harms or challenges associated with AMA’s monopoly over CPT-4 licenses for health care entities?” the proposed rule asks.
CMS notes in the proposed rule that there has been “longstanding concern expressed over the Federal reliance on a private organization with such an obvious conflict of interest as providing information on the time and resource requirements to conduct physician services when this information may influence their own payment.”
CMS also claims that the “historic reliance on the CPT and [RVS Update Committee (RUC)] process as a potential contributor to the development of US health care as a ‘sick care‘ system with limited emphasis on prevention and lifestyle modifications and which may inhibit progress on the Secretarial priority to Make America Healthy Again.”
The AMA did not respond to the Daily Caller News Foundation’s request for comment.
“As a pharmacist for more than 30 years, I’ve seen how government-protected monopolies can drive up costs, stifle innovation, and ultimately leave patients paying the price,” Republican Tennessee Rep. Diana Harshbarger told the DCNF in a statement. “The Current Procedural Terminology (CPT) code set has become essential healthcare infrastructure, yet it remains controlled by a single private organization that faces no meaningful competition. When one organization controls the coding system used throughout Medicare and much of the entire healthcare system, that’s a problem.”
“Congress should bring transparency, competition, and accountability to this process so providers, innovators, and patients all benefit from a more open and competitive system,” Harshbarger continued.
CPT codes refer to medical services and procedures performed by physicians and other qualified healthcare professionals, according to the AMA. The organization also notes that CPT codes can “enable physicians, providers, payers, regulators, vendors and health care technology organizations to document, communicate and understand the care provided to patients.”
The AMA currently possesses “the power to force” healthcare insurers and government agencies to rely on its CPT codes, according to the Institute for Legislative Analysis’ Center for Healthcare Affordability executive director Fred McGrath.
“The AMA’s model is a textbook case of regulatory capture,” McGrath told the DCNF. “The Health Insurance Portability and Accountability Act of 1996 effectively gave the AMA, a private entity, the power to force healthcare insurers, providers, suppliers, and government entities to use its codes. As one would expect when an organization is granted monopoly power, the AMA has used that position to generate more than $500 million in annual revenue.”
“While this may not be among the largest drivers of healthcare costs, the monopoly profits being generated affect the bottom lines of healthcare organizations and unnecessarily increase costs,” he added. “The greater concern is that the AMA is a highly politicized entity that has pledged to ‘infuse racial equity and social justice into the fabric of AMA’s culture, systems, policies, and practices.’”
Another major criticism of the AMA is the money the medical organization generates from licensing the CPT codes.
Cassidy also alleged that the AMA “has abused this government-backed monopoly by charging exorbitant fees to anyone using the CPT code set, including doctors, hospitals, health plans, and health IT vendors.”
“More than half of that revenue came from the publication of books and digital content, including the annual publication of CPT codes that are used to code for medical procedures and services. CPT codes are required to be used by providers to bill for services, and the AMA has had an exclusive monopoly on publishing these codes for over 40 years.”
Cassidy’s office did not respond to the DCNF’s request for comment.
In 2024, the AMA disclosed that it had notched $513.2 million in total annual revenue, up from $495.1 million in 2023. The AMA’s total revenue from royalties surged from $65.8 million to $284.8 million from 2011 to 2023, STAT News reported.
Though, it remains unclear exactly how much of the AMA’s annual revenue stems from CPT code licensing.
Additionally, the AMA has previously promoted embedding “racial justice” and advancing “health equity” in the U.S. healthcare system.
Multiple anonymous AMA doctors told Politico in June that the organization has become increasingly agitated with Health and Human Services Secretary Robert F. Kennedy Jr.
(DCNF)
