NELSON, MD: “CPT Goes to Washington.”

AKA: “But Sir, you can’t nuke the billing codes!”

“Would you miss them?”

"I believe we should work towards restoring these principles to preserve a really precious thing: the sanctity, privacy and respect of the direct, unencumbered Patient-Doctor Relationship. " Robert W. Nelson, MD -- Tel: 770-881-3906

“I believe we should work towards restoring these principles to preserve a really precious thing: the sanctity, privacy and respect of the direct, unencumbered Patient-Doctor Relationship. ” Robert W. Nelson, MD — Tel: 770-881-3906

Dr. Robert Nelson; September 2015; MyDocPPS When we grow up with something that is a part of our professional landscape, we don’t really question it; it’s just always been there. Such is the case with ICD codes and CPT billing for most doctors practicing today. But it’s really quite an odd system when you dissect into it. No other industry that I can think of bills its professional services in such a complex and illusive manner. In fact, once you understand the ontogeny of CPT our healthcare system starts to make a lot more sense; albeit in a rather depressing kind of way.

“Each year, in the United States, healthcare insurers process over 5 billion claims for payment. 1 To ensure that healthcare data are captured accurately and consistently and that health claims are processed properly for Medicare, Medicaid, and other health programs, a standardized coding system for medical services and procedures is essential. The Current Procedural Terminology (CPT®) system, developed by the American Medical Association (AMA), is used for just these purposes.”  Peggy Dotson, RN, BS

To hear Peggy tell it, CPT sounds very important and necessary, not to mention harmless. But from inside the box, everything seems normal; and that’s part of the problem when it comes to our inability to identify CPT code-based billing, born of government interference, as an important cost driver in our system. And no, government is not more efficient in delivering medical care than the private sector.

As we work through the history of the AMA-owned CPT, it is important to remember that a pivotal part of the negotiations that led up to the passage of Medicare was that HCFA (now known as CMS) would agree to pay doctors “usual, customary, and reasonable” rates; this was an olive branch which served to mitigate the AMA’s opposition to many aspects of the Medicare legislation.

Let’s look briefly at how the AMA handles CPT.  The AMA has a CPT Editorial Panel consisting of 15 physicians.   The panel consists of

  • 11 physicians nominated by the National Medical Specialty Societies,
  • one physician nominated by the Blue Cross and Blue Shield Association
  • one physician nominated by America’s Health Insurance Plans
  • one physician nominated by the American Hospital Association
  • one physician nominated by CMS.
  • The CPT Health Care Professionals Advisory Committee sends two representatives.

The AMA Board of Directors approves all nominations. Keep these participants in mind as we work through the history of CPT and its role in medical billing.

CPT codes were first published in 1966 by the AMA, which owns the rights to CPT and has copyright protection over them. Originally, CPT was not used to benchmark fees.  CPT was supposed (ostensibly) to be a method for standardizing surgical procedures within medical records and insurance claim forms and other medical documents. This parallels the history of ICD codes which originated with the World Health Organization in about 1948 as a means to classify diseases in order to collect statistical data that could be analyzed for populations over time.

The important 4th edition of CPT was released in the 1970’s and introduced a method for periodic monitoring and updating of CPT.

But it was 1983 when the real third-party ball & chain was attached, and it has gotten heavier and more expensive as the years and regulations roll by. In 1983 CMS elected to start using CPT for its Healthcare Common Procedure Coding System (“hic-pics”), requiring that CPT codes (level I HCPCS) be used in all Medicare Part B claims. Three years later in 1986, CMS ruled that CPT was to be used in all Medicaid claims processing. Then in 1987, CMS mandated the use of CPT for reporting outpatient hospital surgical procedures.

And the final blow that killed anything resembling a free market in healthcare came in 1996 when, as part of the Health Insurance Portability and Accountability Act (HIPAA), the department of HHS designated CPT and HCPCS as the national standards for electronic transaction of healthcare information.

And a little baby healthcare Cartel was born!

Did I mention AMA makes about 72 million dollars per year in licensing fees related to selling rights to CPT.  That is twice as much as they take in from membership dues.

Meanwhile, insurance networks are signing up doctors and facilities as fast as they can, anticipating the standardization of billing protocols, centralization and consolidation to follow. Then the “support” industries started to spring up everywhere: coding experts, consultants, revenue maximizers, billing software, billing services, and finally EMR vendors… conveniently embedding CPT-based billing software with their product.

And to top it all off, this unholy arrangement has now been codified and solidified with PPACA, resulting in more money flowing to non-medical care entities and even more financial consolidation of those that fleece the tax payers and make a living steering public policy.  All of this, with its costs and complexities, driven by the collusion of CMS with special interests which created the oligopoly that we live under to this day.

Now look back at the list of the AMA’s CPT Editorial Panel participants and then compare them to the recipients of the PPACA windfall. See any commonality?

Then ask yourself if you see any representatives from price transparency groups or alternative payment model groups such as Healthcare BlueBook, Cost of Care, Free Market Medical Association, Citizen’s Council for Health Freedom, Direct Primary Care Coalition?   Of course you don’t. That would be like mixing oil and water! That is because no one at CMS, nor leadership of the AMA, AHIP, AHA or BC/BS want the system to change.

What’s not to like about a government mandate to buy an inflated insurance product supported by fee-for-coding shell game called CPT which is all financed by deficit spending and taxes and that ultimately uses the protocols that all the players are heavily invested in? They like the directional flow of money just fine the way it is.

SOURCE: Dr. Robert Nelson; September 2015; MyDocPPS;

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