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[Off Topic & Political To Boot] Is AMA Fearful of Losing Lucrative Source of Revenue?

Tuesday, January 5, 2010 • 9:00 am


From a letter to the editor in The Wall Street Journal:

Unfortunately, the president of the American Medical Association, Dr. James Rohack, in his response ("AMA Is Working With the Senate," Letters, Dec, 28) to the Dec. 21 editorial "Change Nobody Believes In," does not indicate that his support is another unfortunate example of political deal-cutting in the guise of support for the disastrous health reform bill.

Democrats are touting the AMA's endorsement, little has been reported in the media that a large portion of the AMA's income (the exact amount will not be released by the AMA) stems from the exclusive rights to the medical billing codes that doctors are required to use when they submit bills to insurance plans.

These are essentially the same as a bar code, and are used for nearly every medical procedure, from appendectomies to heart transplants. This arrangement results from a once-secret deal established in the 1980s whereby the AMA maintains and updates the codes at no cost to the government, but generates millions each year selling the code books and software licenses to doctors and insurers. This enabled the government to streamline billing procedures for its insurance programs by setting a single code as the standard.

Comments:

The doctors were upset when it was introduced.  There were eighty-eight codes for and office visit!  The fee was set by the code used, and each code required certain documentation to prove you did it.  Make an error and you could do jail time or just refund all the fees they had ever sent you.  The AMA receives a copyright fee for the use of these and medical clinics must purchase annual updates. All this comes under “hassel factor” that makes doctors look longingle to other sources of income.  Now the government has sent a directive that the big consult codes will not be recognized and another office code which is clearly not a consult must be used.  But the correct code will still be needed for other insurance companies.  Soon they will come out with a new diagnosis code that must match the procedure codes.  This code will have over twice the number of old codes so back to school again.  I think this is all soon to end.  Meetings and classes are being held on how to get out of Medicare/Medicaid provider and some enen on getting out of insurance provider status.  Cash businesses seems to be lucrutive in certain locations, especially as the waiting list grows longer.  In areas that can’t support cash business, then doctors will just have to move to an area that does, or go into another business, retire, or go to a mission hospital.  Developing….

[1] Posted by PROPHET MICAIAH on 01-05-2010 at 09:14 AM • top

Isn’t it truly amazing that this legislation which is so “critical to the financial and health well-being of the country” won’t kick in for 3-4 years?  Yet more amazing is that it is so popular and so joyfully embraced by the masses and their legislative reps that massive bribes have to spread far and wide in order to get it to the goal line.
Many are predicting a huge backlash for democrats in the November elections.  The bigger the better as far as I am concerned.  And if a few RINO’s get swept away that will be icing on the cake.

[2] Posted by Capt. Deacon Warren on 01-05-2010 at 11:37 AM • top

There are two sets of codes that physicians deal with. The diagnosis codes or ICD’s. Currently we use ICD-9 codes. For example, Migraine with aura is 346.0 versus migraine without aura is 346.1 (for you prurient readers orgasmic headache is 339.82). Now, it is entirely irrelevant to the insurance company if you are seeing your physician for migraine with or without aura. It is simply a ruse to deny payment. If you write 346 without the “.0” or “.1”, your claim will be denied and expect it to be cleared up in 6 months or so. And they will be coming out with ICD10 which will make the physician specify whether the gout is affecting the big toe or the pinky toe, again as if that matters to the insurance company. The Rand corporation estimates the cost of conversion from ICD9 to ICD10 to run $425M to $1.15B in one-time costs plus somewhere between $5 and $40 million a year in lost productivity. The good news is that the ICD is put out by the WHO and is copyright free.

In contrast, the CPT codes which are “owned” by the AMA describe whether I amputate your leg below the knee or above the knee, etc.

The single volume CPT book for physicians costs $107 (AMA members do get a discount). In contrast, the two volume ICD-9 book costs $87. Hmmm.

[3] Posted by robroy on 01-05-2010 at 03:37 PM • top

And AMA dues are $420 for a practicing physician. There are membership levels that cost less. I don’t have membership numbers for 2009, nor do I have the sales data of the CPT manuals, but if the code book sales are a substantial source of revenue, then the AMA will try to keep this cash cow going as long as possible. Unfortunately, once you go to bed with the Fed, you will lose your cows along with your innocence pretty quick.

[4] Posted by Undergroundpewster on 01-05-2010 at 08:58 PM • top

Since only 17% of American physicians are members of the AMA and most of those are opposed to the majority party’s health care plan, the vast majority of docs support neither Obamacare nor the AMA.

[5] Posted by Edwin on 01-05-2010 at 10:00 PM • top

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