November 2006

EXPOSING THE HHS/AMA HEALTH CARE MONOPOLY
By Jennifer Bolen

Curing the Ailing Beast

Health care in the US is in dire straits. Although it is by far the costliest system in the world, it is a beast that barely passes muster with an overall grade of "D" when it comes to quality of care¹. From an alarming lack of affordable coverage, to an epidemic of medical error and drug deaths, to a dearth of real treatment options, the list of problems is long and tragic.

Our system is sick, but how do we fix it? We start with reducing our reliance on the most expensive care (allopathic medicine) and increasing access to less invasive and less expensive care from over 3 million licensed and qualified caregivers. To do this, we must first address a statutory billing code monopoly created by the government that is preventing us from solving our health care crisis.

The Department of Health and Human Services (HHS) is charged with safeguarding our health but is actually restricting our access to safe, effective, and affordable treatment options while propping up the current "drugs and surgery" paradigm. As of 2005, over 46 million people in the U.S. were uninsured². Though there are a multitude of reasons for the high cost of insurance, several factors can actually be traced back to the same statutory monopoly.


HHS’s Role in Establishing a Medical Monopoly

In order to understand the power of this government-sponsored billing code monopoly, first we need to understand how it came to be.

In 1983, the Department of Health and Human Services (HHS) signed an agreement with the American Medical Association (AMA), an MD trade organization, to develop codes that are used by health care practitioners to submit bills for reimbursement by insurers, government agencies (like Medicare, Medicaid and TRICARE) and other payors. Next, in 1996, Congress authorized HHS to select code sets the health care industry must use for processing electronic health care claims. HHS mandated use of the AMA’s codes. While the AMA’s codes do an excellent job of supporting physician billing, they do not support billing from the 3 million licensed practitioners who are not allopathic physicians.


Consequences of the Medical Code Monopoly

This mandate has resulted in three major national health care policies that reduce access to care and increase costs:

1. The entire health care industry relies on codes to describe covered health care benefits and process payments.
2. The AMA and the government jointly establish the value of each code that results in reimbursement for all health care services.
3. The insurance industry, like all other industries, is moving away from paper-based billing to electronic billing. Thus, mandated AMA codes end up becoming the only codes the industry uses.

The upside of this "code monopoly" is that there aren't duplicate code sets provided by competing companies to document the same service. Eliminating duplicate codes streamlines the billing process, allows for effective electronic communication and generates data that lets the health care industry financially manage benefits. The downside is that the HHS contract and mandate have resulted in an MD trade organization, dedicated to promoting "the art and science of medicine,"³ controlling health care delivery through codes.

Medical Care versus Health Care

Merriam-Webster defines health as: the condition of being sound in body, mind, or spirit; especially: freedom from physical disease or pain b: the general condition of the body health> health>

Medical is defined as: 1: of, relating to, or concerned with physicians or the practice of medicine 2: requiring or devoted to medical treatment.

"Medical care" and "Health care" are not synonymous. Yet our U.S health care system is based on medical care rather than health care and medical care is generally the most costly health care option. Health care should include access to conventional as well as preventive and alternative treatments. Health care access should include all qualified practitioners from nurses to physical and occupational therapists to mental health practitioners to pharmacists and nutritionists and to complementary and alternative medicine practitioners (CAM). Unfortunately, in most cases, physicians determine how all care is accessed and delivered. In fact, of the more than 6 million health care professionals practicing in the US, fewer than 800,000 are licensed MDs and only about 300,000 of those MDs actually belong to the AMA. While medical care in the U.S. is certainly advanced in treating complex diseases and injuries, most of the health-related issues in the U.S. are not complex and could be effectively treated by less expensive and highly qualified practitioners. Yet, because of codes, we rely on the most expensive care providers to determine how care is delivered, meanwhile preventing many qualified caregivers from being able to bill for reimbursement for their services.

Coding Monopoly Drives up Health Care Costs

The coding monopoly is grave enough that Senator Trent Lott, in a letter to former Health and Human Services Secretary Tommy Thompson, stated:

"It is my understanding that HCFA4 in 1983 granted the AMA what has been characterized as a "statutory monopoly" by agreeing to exclusively use and promote the AMA’s copyrighted CPT code for the purposes of reimbursing Medicare and Medicaid bills from doctors for outpatient services. As a result of HCFA’s and the federal government’s endorsement of the AMA’s copyrighted outpatient code -- to the exclusion of all competitors -- private insurance companies and others were also forced to adopt the CPT as their billing standard as well. The CPT code has thus become a fixture in doctor offices around the country. This predictably led to a financial windfall for the AMA in the form of CPT-related book sales and royalties approaching $71 million a year according to a report by the Wall Street Journal."

Currently, the cost of health insurance is so prohibitive, that record numbers of employers are refusing to offer health insurance as an employee benefit – many employers simply can't afford it.⁵ This has resulted in a record number of uninsured Americans and has pushed millions of people into having to utilize the taxpayer supported services of Medicaid. Recently, rather than recognize any additional code set that could supplement the AMA’s codes and help expand public access to quality care at less cost, HHS seems bent on blocking any code development process that does not include the AMA..

Solution on the Horizon

Ten years ago, in a grand attempt to fill these gaps in billing codes and therefore open access to the entire health care system, a little-known company called ABC Coding Solutions (formerly Alternative Link) began creating codes to be used alongside CPT codes. After eight years of meeting each government requirement, in January of 2003, former Secretary of HHS, Tommy Thompson, agreed to test the cost-benefits of these new codes in electronic healthcare transactions. While empirical data showing cost benefits was submitted to HHS, and participants demonstrated a critical need for the use of ABC codes, the department rejected these reports and concluded testing on October 16, 2006.

Rather than give up, the developers of ABC codes have created a new claims filing tool that allows practitioners to document their care using ABC codes and then bill electronically using HCPCS, the jointly developed AMA and government code sets. This system collects data that generates comparisons between non-medical outcomes with medical care outcomes. The ability to track care options lends credibility to proponents of CAM, nursing, behavioral health, nutrition and other care options by providing irrefutable evidence of demand, utilization and outcomes of these care options. This supports the assimilation of efficacious treatments, thus providing the public with more options from more practitioners with the right to bill. ABC Coding Solutions will provide the data collected from its claims filing tool to the insurance industry, Congress and the press.

Many Congressional leaders understand the negative financial impact of the coding monopoly and are helping assure an impartial and unbiased review of ABC codes outside of HHS. Congressional leaders also understand that ABC codes are the only fully developed code option on the horizon to describe the care provided by over 3 million licensed practitioners who are not allopathic physicians.


The Future of Health Care

Who knew that codes were so essential to the delivery of health care in the U.S, and that a billing code monopoly can actually establish the business model for an entire country? Consumers, who are demanding options in treatment and access to affordable coverage and care, should ultimately control this industry, especially in a free-market economy. The right to choose who will provide our health care should not lie within a government bureaucracy, acting at a glacier pace and unresponsive to our nation’s critical need for greater access to quality care at less cost.

The public has need of and the right to direct access to any qualified practitioner in any state. These practitioners have need of and the right to codes to bill for their care. Until a mandatory code set is established for meeting these needs, ABC codes can be used to properly document care, assure rational reimbursement and provide data that will show which care options will reduce health care costs. Since state laws vary widely on who can do what (which practitioners can provide which services) the ABC coding system can validate that the care being provided is authorized by the state. How? References to over 15 million state statutes, administrative regulations, case laws and training standards are tied to each practitioner in each state for each ABC code. Thus, the ABC coding system helps prevent billing fraud and reduces practitioner and insurer risk of fines that can be as high as $10,000 per claim⁶ for processing payment for an illegal service.

By filling in coding gaps, ABC codes meet practitioners billing needs, the public's demand for viable treatment options and the industry’s need to avoid billing fraud and collect outcomes data. Without ABC codes, the industry is basing health care policy on medical interventions. When health care policy is defined by demand and expanded to include every available treatment option, then, and only then, will the ailing beast we call health care be cured.

Health care practitioners are invited to submit data to HHS and Congress related to their need for additional codes by taking a short survey. Please click on: http://www.surveymonkey.com/s.asp?u=584512811881.


For more information about ABC codes, please click on www.ABCcodes.com.

For information about ABC Coding Solutions’ web hosted claim filing tool, ZipClaims.com, please click on www.ZipClaims.com.

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1. C. Schoen, K. Davis, S. K. H. How, and S. C. Schoenbaum, U.S. Health System Performance: A National Scorecard, The Commonwealth Fund and Health Affairs Web Exclusive, September 20, 2006 W457–w475
2. The Number of Uninsured Americans Is at an All-Time High, Center on Budget and Policy Priorities, August 29, 2006
3. AMA Mission Statement, www.ama-assn.org
4. HCFA stands for the Health Care Finance Administration, a division of Health and Human Services. HCFA has since been named the Centers for Medicare and Medicaid Services and its new acronym is CMS.
5. J. Hadley, Effects of Recent Employment Changes and Premium Increases on Adult Insurance Coverage, Urban Institute, October 20, 2006
6. D. Hellerstein, HIPPA’s Impact on Health Care -- Government Activity, Health Management Technology, April 1999