American
Medical Association's Secret Pact with the Federal Government
By Andrew Schlafly,
Esq.
Andrew Schlafly is General Counsel
for AAPS. He is a graduate of
Harvard Law School and has served as an Adjunct Professor at Seton Hall Law
School.
On April 27th, the AMA hosted a
self-described "Flyin" for physicians to express their comments and
outrage about the new E&M Documentation Guidelines (the
"Guidelines") due to go into effect on July 1st.
As Dr. Nino Camardese discovered when he
flew to this event, however, the AMA denied entrance even to its own longstanding members, unless handpicked
beforehand. In fact, the AMA
limited attendance and discussion to a predetermined set of physicians and
administrators.
By coincidence, Dr. Jane Orient, Executive
Director of American Association of
Physicians and Surgeons (AAPS), qualified for admission by virtue of her
leadership position in her county medical society. After an initial delay in
conceding that Dr. Orient may attend, the AMA ultimately allowed her to
participate.
At the meeting, numerous physicians
expressed their genuine outrage at the AMA for developing these onerous
Guidelines. Many of the questions were insightful, and the AMA failed to
answer many of them in a
satisfactory manner. Among dozens of questions, however, none were as
revealing as one simple question presented by Dr. Orient.
Like a scene from Alfred Hitchcock's
famous movie The 39 Steps, Dr. Orient asked the AMA the following question:
"Does
the AMA have a contract with the federal government, and when will they
release the details of the contract to [the AMA] membership?"(1)
The AMA had apparently never informed its
members - or physicians at large - about the details of its secret pact with the
government. Meeting attendees
seemed taken aback by this startling question from Dr. Orient.
And as in the movie classic, Chairman
Reardon of the AMA had no alternative but to admit the existence of such a
contract. But Chairman Reardon then ducked the second half of the question,
and tacitly refused to disclose the contents of the contract - even for AMA members.(2)
AAPS is not so easily thwarted, however.
After all, it was AAPS that sued the Clinton Administration to stop the
complete government takeover of medicine, and it was AAPS that won both
politically and legally. AAPS's judgment of $285,864.78 against the
government was issued by Judge Royce Lamberth in December 1997.(3) AAPS also
took its case to the American public, which rendered an analogous verdict in
repudiating Clinton's health care plans in the 1994 Congressional elections.
Upon the foregoing confirmation that the
AMA does have a pact with the government, AAPS proceeded to ferret out the
details. Requests of HCFA for the contract and related materials were greeted
with bureaucratic stalling.
Numerous letters to the AMA from one of
its own distinguished members were met by stonewalling. The refusal by the
AMA to turn over these essential documents - even though the AMA directors
call themselves "Trustees" -raises serious questions whether there
is a continuing breach of their legal duty of trust here.(4)
Undeterred, AAPS obtained a copy of the
secret AMA/HCFA contract from a source independent of both the AMA and HCFA.
Here is its very first contractual requirement:
1.
HCFA shall adopt and use [the AMA's] CPT-4 in connection with HCPCS, for the
purpose of reporting physicians' services under Medicare and Medicaid. HCFA
agrees not to use any other system of procedure nomenclature in HCPCS for
reporting physicians' services.(5)
Under this initial provision, the AMA
thereby grabs a monopoly over the
government-imposed coding standards for physicians.
Yet in its response to the recent outrage
about the Guidelines, the AMA repeatedly implied that HCFA was the
perpetrator.(6) The AMA thereby conducted a charade by which it was the
supposed defender of physicians against government requirements.(7)
For example, the AMA President responded
to the outrage by declaring: "Everywhere I go these days, physicians ask
me about HCFA's 1997 Revised Documentation Guidelines for Evaluation and
Management Services.
Since then, we've been meeting with HCFA
face to face to voice your concerns."(8) One attendee at the
"Flyin" even asked whether the AMA could take its name off of the
Guidelines, apparently unaware that the AMA-controlled CPT Editorial Panel
was the perpetrator.
The above-quoted contractual obligation
mandates that HCFA must enforce the coding systems developed by the AMA. The
AMA thereby imposes requirements on physicians through the name of HCFA, by
virtue of this secret pact between the AMA and HCFA. This contract has been
in effect since 1983.(9)
The second clause of the contract
eliminates any doubt about HCFA's contractual obligation to enforce the AMA's
codings:
2.
HCFA shall: (a) publicly endorse the use of CPT-4 based HCPCS for the purpose
set forth in paragraph 1; (b) where permitted by HCFA's statutory authority
and budgetary constraints, require the use of CPT-4 based HCPCS in programs
administered by HCFA by its agents and other entities participating in those
programs; and (c) encourage the voluntary use of CPT-4 based HCPCS by
others.(10)
There it is: the AMA imposes its onerous
coding regulations on physicians in the name of HCFA.
Virtually every crime
has a motive, and the motive here money. Lots of it.
The AMA declares on its Web site that the
AMA "generates approximately two-thirds of its annual $200 million
operating budget from non-dues sources."(11) Of that $133 million in
non-dues revenue, the AMA's publication revenue, including sales of those
expensive CPT code books, is its most prominent source.(12) T
The victims of these endlessly complicated
revisions to codings are
physicians rendering private medical care. Each year physicians pay
substantial costs and expend precious hours trying to keep up with the rules
imposed by the AMA's CPT money-making machine. The time and money lost by
physicians due to the AMA could be far better spent in the service of
patients.
Recently a 3-judge federal panel in the
9th Circuit had the following to say about this contract between the AMA and
HCFA:
"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 plain language of the AMA's licensing
agreement requires HCFA to use the AMA's copyrighted coding system and
prohibits HCFA from using any other. ...The controlling fact is that HCFA is
prohibited from using any other coding system by virtue of the binding
commitment it made to the AMA to use the AMA's copyrighted material
exclusively.
Conditioning the license on HCFA's promise not to use
competitors' products constituted
a misuse of the copyright by the AMA."(13) Harsh language indeed by the
federal judges in unanimously condemning the AMA's conduct.
Unlike The 39 Steps, however, the AMA's
scheme does not end simply with Dr. Orient's asking of the question. To the
contrary, the AMA Web site now boldly declares that "the Association is
developing a next-generation CPT, called CPT-5, to be launched this spring."(14)
And who will pay for the additional regulatory burden imposed by the AMA?
Private physicians, of course - unless AAPS can end the scheme first.
Physicians must and will take back their
esteemed profession from this moneymaking machine of AMA-generated
regulation. While the AMA, in its own words, "is a successful business
entity" that includes "for-profit subsidiaries," medical
practice must remain an ethical profession focused on providing quality care
to patients.(15)
What You Can Do To
Stop the AMA
On August 7, 2001, U.S. Senate minority
leader, Trent Lott (R-MS) sent a letter to HHS Secretary Tommy Thompson calling for an end to
the American Medical Association's monopoly on "CPT" codes that doctors are required to use to bill
Medicare and Medicaid.
Sen. Lott deserves everyone's support in
his effort to pull the rug out from under the AMA's secret monopoly on these
codes. While it is a very complex issue, any doctor will tell you that the
AMA's stranglehold on government billing has been a major cause of the fear
and intimidation in which doctors are now forced to practice medicine.
Elimination of this AMA cartel will do
more to protect patients than any Patients' Bill of Rights law. We only hope
that Sen. Lott's motivation is indeed patient protection, not political
manipulation to curb the AMA's donations to the Democratic party, and that
he'll see this all the way through.
The AMA is desperately in need of the
Congressional sunshine that Sen. Lott can focus. A 3-judge federal panel in
the 9th Circuit has already ruled that the AMA misused its copyright, but
getting specifics has been tough.
In 1997, the AMA's then-president, Thomas
Reardon, finally admitted to the secret contract when questioned at a meeting
by the American Association of Physicians
(AAPS) executive director, Jane Orient.
The AMA apparently had never informed its
members - or physicians at large - about the details of its secret pact.
Meeting attendees seemed taken aback -- even more so when the Dr. Reardon
refused to disclose the details.
We're talking some big bucks here. The AMA
admits on its Web site that it makes more money on publishing than from
member dues -- to the tune of about $133 million in non-dues revenue,
including sales of those expensive CPT code books.
Let's take back medicine from this
moneymaking machine of AMA-generated regulation. While the AMA, in its own
words, 'is a successful business entity' medical practice must remain an
ethical profession focused on providing quality care to patients -- not
extorting multi-million dollar publishing revenues fees from doctors to pay
six-figure salaries to AMA honchos.
Help Sen.
Lott Keep His Word
Call, fax or Email Sen. Lott to tell
him to stick with this investigation. Remind him:
1.
The AMA is NOT a unanimous voice for physicians
2.
The AMA shouldn't be given a government monopoly to makes tens of millions of
dollars bilking doctors, who must pass along the costs to patients.
3.
The CPT codes should be free -- just like IRS forms, or any other paperwork
required by the government.
Here's How To Send Your Message
1.
EMAIL: [email protected]
2.
PHONE: Sen. Lott's Washington office -- (202) - 224-6253, Fax (202) 224-2262
3.
AMA Website: Tell Sen. Lott and the AMA what you think -- log on to www.ama-assn.org/grassroots ,
and click on connect with Congress. Be sure to send the AMA a copy of your
comments.
References/Endnotes
1. Transcript of the
tape recording of the meeting, AAPS files, Tucson, Arizona.
2. Ibid.
3. AAPS v. Clinton, Order by Judge Royce C. Lamberth dated 12/18/97 granting
motion for attorney fees, costs and sanctions against Leon E. Panetta, Alice
Rivlin, Hillary Rodham Clinton, Ronald H. Brown, Robert B. Reich, Donna E.
Shalala, Lloyd E. Bentsen, Les Aspin, Jesse Brown, Carol Rasco, Ira
Magaziner, Pres. Task Force, Judith Feder by plaintiff and directing the
defendants to pay to the American Association of Physicians and Surgeons,
Inc., the sum of $285,864.78.
4. Bingham v. Ditzler, 309 Ill. App. 581, 33 N.E.2d 939 (1941).
5. Agreement, The Department of Health and Human Services Health Care
Financing Administration and American Medical Association, signed February 1,
1983 by James H. Sammons, M.D., Executive Vice President of the AMA and
Richard S. Schweiker, Secretary of HHS (emphasis added). Readers are invited
to review this agreement as posted on the AAPS Web site at http://www.aapsonline.org
under Departments, Medicare, E&M.
6. Getting the Facts About E&M. American Medical News 1998;41(12):1A-4A.
7. Ibid.
8. Ibid., p.4A (emphasis added).
9. Agreement, op.cit.
10. Ibid.
11. AMA Web Site, http://www.ama-assn.org/employ/workplac/affil.htm.
12. Ibid.
13. Practice Management Information Corp. v. The American Medical Ass'n, 121
F.3d 516, 520-21 (9th Cir. 1997), modified on reconsid. 133 F.3d 1140 (9th
Cir. 1998).
14. AMA Web Site,
http://www.ama-assn.org/sci-pubs/amnews/pick_98/pick0525.htm.
15. AMA Web Site, http://www.ama-assn.org/employ/workplac/affil.htm.
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