The AMA’s $70-Million Taxation without Representation: Is it Time for a ‘CPT Party’ Revolt?

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.



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

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

seems low, if the Wall Street Journal and Senator Lott were correct in using roughly the same figure 9 years ago.

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.

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


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 3rd party

  • 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 sense
of the dimensions of the CPT’s value to the AMA, asking for a comment on why she
felt 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

“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 healthcare
is toward diversity, multidisciplinary practice, collaboration, team-care, and
respect 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-guard
AMA fighters who have taken it upon themselves to stand in
the 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 CPT
Part of the “payment reform” for which Kreitzer calls must be wresting this control from a single guild. The present system, akin to
taxation without representation, may have made sense before organized medicine
was challenged by the rise of nursing, of other (increasingly non-) allied health
care 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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